Unanimous-Consent Request--527 Reform Act Of 2006
Madam President, at the conclusion of my remarks, I will ask unanimous consent to move to consideration of S. 2511, legislation that requires that the law be enforced. That is, that the so-called 527s be made illegal and banned as they…
Madam President, at the conclusion of my remarks, I will ask unanimous consent to move to consideration of S. 2511, legislation that requires that the law be enforced. That is, that the so-called 527s be made illegal and banned as they properly should be. I will be making that unanimous consent request after the conclusion of my remarks. I have been told the Democrat side will be objecting to moving to the legislation. I regret that very much.
The legislation is pretty straightforward. It requires any organization--including the so-called 527s--that falls under campaign finance contribution limits, as is any objective observer's reading of the law, to follow the law.
I regret we will be unable to move this important piece of legislation. It is simple and straightforward and designed to overcome the Federal Election Commissions's inexcusable failure to interpret properly the original Federal Election Campaign Act of 1974.
I point out to my colleagues that these 527s are a violation of the original Federal Election Campaign Act, now BCRA, known by some as McCain-Feingold. The Federal Election Commission, as in many cases, inexcusably fails to properly interpret the original Federal Election Campaign Act which would halt the illegal practice that has sprung up whereby 527 groups are now spending soft money on ads and other activities to influence Federal elections.
I understand fully the politics surrounding this issue, which unfortunately is going to cause some of my colleagues to oppose any reform. But the time has come to address this issue. We should put political prerogatives aside and do what is best for the American electorate. We need to have this debate. I am committed to working with my colleagues to resolve our differences. Let's bring this bill up, have a debate, and consider amendments.
As my colleagues know, a number of 527 groups raised and spent a substantial amount of soft money in a blatant effort to influence the outcome of the 2004 election. These activities are illegal under existing laws, and yet, the FEC has failed to do its job and has refused to do anything to stop these illegal activities. Therefore, it is now up to Congress to pursue all possible steps to uphold FECA and overturn the FEC's misinterpretation of the campaign finance laws, which is improperly allowing 527 groups, whose purpose is to influence Federal elections, to spend soft money on these efforts.
In McConnell v. FEC, the Supreme Court noted wisely that money, like water, will look for ways to leak back into the system. With the enactment of the Bipartisan Campaign Reform Act of 2002, BCRA, the national parties were taken out of the soft money business. It did not take long before efforts were underway by some to bring soft money back into Federal elections through the vehicle of groups that operate as ``political organizations'' under section 527 of the IRS Code, or so- called ``527s.''
The soft money game is the same with these groups; they are raising multi-million-dollar donations from wealthy individuals, as well as large contributions from corporate and union contributions, and spending that soft money on broadcast communications that promote or attack Federal candidates, and voter mobilization efforts intended to influence Federal elections. We saw, firsthand, how a number of 527 groups raised and spent huge amounts of soft money in order to influence the outcome of the last Presidential election. These activities were prohibited under longstanding campaign finance law but, again, the FEC failed to properly enforce the law. As a result, federally oriented 527s spent over $400 million on the 2004 elections.
It turns out that almost half of the financing for 527 groups in the 2004 elections came from a relatively small number of very wealthy individuals who made huge soft money contributions. According to campaign finance scholar Tony Corrado, 25 wealthy individuals accounted for $126 million raised by 527 groups active in the 2004 Federal elections. This included 10 donors who gave at least $4 million each to 527s involved in the 2004 elections and two donors who each contributed over $20 million. If that doesn't make a mockery of both campaign finance laws, nothing does. Two donors, $20 million each. Over $20 million each poured into the 2004 Presidential campaign.
Opponents of campaign finance reform like to point out that the activities of these 527s serve as proof that BCRA failed in its stated purpose to eliminate the corrupting influence of soft money in our political campaigns. Let me be perfectly clear: The 527 issue has nothing to do with BCRA. It has everything to do with a 1974 law and the failure of the Federal Election Commission to do its job and properly regulate the activities of these groups. The new campaign finance law, BCRA, has successfully accomplished its goals.
Last year, David Broder wrote in the Washington Post:
As one who has been skeptical of the claimed virtues of the
McCain-Feingold campaign finance law, I am happy to concede
that it has, in fact, passed its first test in the 2004
campaign with flying colors.
It is important to point out that this was accomplished despite all of the predictions at the time about how the national political parties would be financially undermined without soft money. That was the major source of opposition. This would destroy the national political parties. The national political parties raised more hard money in the 2004 election cycle than they raised in hard and soft money combined during the Presidential election cycle in 2000. In fact, Republican and Democratic national parties raised a record $1.2 billion for the 2004 elections. What is really good about that is the majority of that came from small donors, not large, huge, soft money contributions. They increased that donor base. Again, the Democratic National Committee has more than 2.5 million new donors; the Republican National Committee, more than 1 million new donors; Republican senatorial and congressional campaign committees, 700,000 new donors; Democratic congressional campaign committee, 230,000 new donors. That was the intent of the law. That is what happened.
According to Tony Corrado, the DNC has more than 2.5 million new donors, as I pointed out; the RNC more than a million new donors.
What is the problem? The problem is, the Federal Election Commission, even though directed by the Supreme Court, will still not enforce existing law.
The fact that the overwhelming majority of Federal 527s were created after the enactment of BCRA is no coincidence. Of the 68 Democrat- leaning 527 committees involved in the 2004 cycle, 54 of them were organized after BCRA. Of the 26 Republican-leaning 527 groups in the 2004, 13 were organized after the enactment of legislation which banned the use of soft money in Federal elections.
These groups were set up with every intention of circumventing the law. They could not circumvent the law if the Federal Election Commission would enforce the law. That is why we have to go to court again and again.
For the record, in order to enforce, to write regulations to enforce the BCRA, 13 of the 15 original regulations were thrown out by a Federal court judge--a remarkable performance on their part, remarkable.
S. 2511, the bill I would like to see brought before this Senate, voted on and passed, requires that 527s register as political committees and comply with Federal campaign finance laws, including Federal limits on the contributions they receive unless the money they raise is spent exclusively in connection with non-Federal candidate elections, State or local ballot initiatives, or the nomination or confirmation of individuals to nonelected offices. And it upholds the hard-fought victory of BCRA.
The legislation also sets new rules for Federal political committees that spend funds on voter mobilization efforts affecting both Federal and local races and, therefore, use both the Federal and non-Federal account under FEC regulations. The new rules would prevent unlimited soft money from being channeled into Federal elections through abuse of the Commission's allocation rules.
Under the legislation, at least half of the funds spent on voter mobilization activities by Federal political committees would have to be hard money from their Federal account. More importantly, the funds raised for their non-Federal account would come only from individuals and would be limited to no more than $25,000 per year per donor. Corporations and labor unions could not contribute to these non-Federal accounts.
To put it in simple terms, a George Soros could give $25,000 per year to a single political action committee as opposed to the $22 million he spent to finance these activities.
Let me be perfectly clear on one point. This proposal would not shut down 527s. It would simply require them to abide by the same Federal campaign finance rules that every other Federal political committee must abide by in spending money to influence Federal elections, nor is this bill intended to affect 501(c)(3) or (4) tax-exempt organizations.
Under the Internal Revenue Code, a 527 group is a ``political organization,'' which is a group whose primary purpose is to influence candidate elections or the appointment of individuals to public office. In other words, the 527 groups by definition are in the business of influencing campaigns and have voluntarily sought the tax advantages conferred on such political groups. These groups cannot be allowed to shirk their responsibilities to comply with Federal campaign finance laws when they are spending money to influence Federal elections.
The use of soft money by 527 groups to pay for ads attacking and promoting the 2004 Presidential candidates was not legal. This is not a matter of the new campaign finance law, BCRA; it is a requirement of longstanding Federal campaign finance laws that go back to 1974. That law, as construed by the Supreme Court in Buckley v. Valeo, requires any group that has a ``major purpose'' to influence Federal elections, and spends $1,000 or more to do
so, to register with the Federal Election Commission as a ``political committee'' and be subject to the contribution limits, source prohibitions, and reporting requirements that apply to all political committees.
Section 527 groups need to play by the rules that candidates, political parties, and all other political committees are bound by--the rules that Congress has enacted to protect the integrity of our political process. They need to raise and spend money that complies with Federal contribution limits and source prohibitions to pay for ads that promote or attack Federal candidates or otherwise have the purpose to influence Federal elections. They need to spend Federal funds for voter mobilization activities that are conducted on a partisan basis and will influence Federal elections--just like every other political committee.
Some have raised questions about whether it is constitutional to limit contributions to political committees that operate supposedly independent of parties and candidates.
I ask unanimous consent to have printed in the Record, Madam President, a detailed analysis of these constitutional questions prepared by Professor Daniel Ortiz, the John Allan Love Professor of Law at the University of Virginia School of Law. The memo thoroughly explains the constitutional basis for the legislation we have introduced.
As the memo points out, the Supreme Court in the McConnell case spoke directly to this issue and said that such limits are constitutional. The Court specifically noted that in an earlier case, California Medical Association v. FEC, it had upheld the $5,000 limit on contributions to political committees even as to a committee's spending for ``noncoordinated expenditures.'' The constitutional rationale in the California Medical Association v. FEC, as in the case of the soft money ban upheld by the Supreme Court in McConnell, is equally applicable to S. 2511. It is designed to prevent the evasion and circumvention of Federal contribution limits and prohibitions.
It is unfortunate we even need to be talking about this situation today. This legislation would not be necessary if it were not for the abject failure of the FEC to enforce existing law. As I noted earlier, some 527s raised and spent soft money to run ads attacking both President Bush and Senator Kerry. The use of soft money to finance these activities is clearly illegal under current statute, and the fact that they were allowed to continue unchecked is unconscionable.
The blame for this lack of enforcement does not lie with the Congress, nor with the administration. The blame for this continuing illegal activity lies squarely with the FEC. This agency has a duty to issue regulations to properly implement and enforce the Nation's campaign finance laws; and the FEC has failed, and it has failed miserably, to carry out that responsibility.
Let's consider two recent court rulings. First, in its decision upholding the constitutionality of BCRA in McConnell v. FEC, the U.S. Supreme Court stated that the FEC had ``subverted''--``subverted''--the law, issued regulations that ``permitted more than Congress had ever intended,'' and ``invited widespread circumvention''--those are not my words; those are the words of the U.S. Supreme Court in a majority decision--of FECA's limits on contributions.
Additionally, when Judge Kollar-Kotelly threw out 15 of the FEC's regulations implementing BCRA, among the reasons for her actions were that one provision ``severely undermines FECA'' and would ``foster corruption,'' another ``runs completely afoul'' of current law, another would ``render the statute largely meaningless,'' and, finally, that another had ``no rational basis.''
No wonder a Los Angeles Times editorial stated that:
[H]er decision would make a fitting obituary for an agency
that deserves to die.
We cannot allow the destructive FEC to continue to undermine the Nation's campaign finance laws.
An article published just yesterday in the Hill points out that the FEC ``is being accused of attempting to intimidate soft-money donors to 527s by targeting the donors for questioning.''
The article also makes note of ``the FEC decision last month not to implement new regulations for 527s this election cycle. That was widely interpreted as a green light for 527s to act without restriction.'' What is going on here? The job of the FEC is to write regulations to properly implement campaign finance laws--not to bully and intimidate those who choose to donate to groups the FEC refuses to regulate.
Madam President, I ask unanimous consent that the article form the Hill be printed in the Record.
The track record of the FEC and its continued stonewalling proves that the Commission is incapable of upholding its responsibilities. The time has come to put an end to its destructive tactics. The FEC has had ample and well-documented opportunities to address the issue of the 527s' illegal activities, and each time it has taken a pass, choosing instead to delay, postpone, and refuse to act.
BCRA has demonstrated that, on a bipartisan basis, we care about making sure that political power in this country does not lie solely in the wealth of big corporations, labor unions, and the wealthiest of the wealthy. We need to uphold and build upon past reforms and not endorse the pursuit of ways to get around or unravel them.
I again point out with this chart that the predictions, when we passed BCRA, were that it would be the end of national parties; that it would prohibit people from any way to be able to contribute to political campaigns, and the parties would suffer mightily. Well, here is the amount of money. Here is the amount of new donors that both parties got. I have to say, in fairness, the Internet had a lot to do with the encouragement of, and ability of, millions of new donors to engage in contributions.
But let me also point out, for those who were worried about the destruction of the political parties and some kind of diminution of their capabilities, the Democratic Party raised $580 million as opposed to $212 million. This is hard money alone, with the elimination of soft money. And Republicans raised $632 million. So millions of new donors took part in the political process. The parties were strengthened.
No longer is it legal for a powerful Member of Congress to call up a labor union leader, a trial lawyer, or a corporation head and say: I need a soft money donation in six figures. And, by the way, your legislation is up before my committee. That is no longer legal and has stopped.
Do we have problems still with too much money washing around Washington in the form of campaign contributions? Yes. And do we have additional measures that need to be taken? Yes. But the first thing that needs to be done is to make the 527s fall in line with the same restrictions placed on any other organization that engages in activities to attempt to influence the outcome of an election.
I want to emphasize, we are not trying to ban them. We are trying to make them subject to campaign finance contribution limits, which are clearly, clearly called for in the 1974 law.
Again, the performance of the Federal Election Commission is really a great national disgrace. And how they can continue to fail to write regulation to enforce existing law that the Congress has passed since 2002 and enforce laws that were passed in 1974 is absolutely beyond comprehension.
Mr. President, I note the presence of my friend, the Senator from Nevada, on the floor of the Senate at this time, so I will proceed with the unanimous consent request at this time.
Mr. President, I ask unanimous consent that at a time to be determined by the majority leader, after consultation with the Democratic leader, the Committee on Rules and Administration be discharged from further consideration of S. 2511, and the Senate proceed to its immediate consideration; I further ask that there be 4 hours of debate equally divided with no amendments in order;
provided further that following the use or yielding back of time, the bill be read a third time and the Senate proceed to a vote on passage, with no intervening action or debate.
Mr. President, I, obviously, am not surprised at the objection of my friend from Nevada. We need to address this issue. As I mentioned, I do not think we would have to if it were not for the Federal Election Commission's failure to carry out their responsibilities.
I have observed the role of money in politics for a long time. And unless these 527s are brought under control, we are going to see ever- enlarging activities and more and more money being spent through this loophole that has been carved out, unfortunately, and allowed, as I mentioned, two individuals to contribute as much as $22 million each in the 2004 campaign.
I worry very much about one individual donor contributing millions of dollars that would come into a House or a Senate race in the last couple or 3 weeks of a campaign. Obviously, that would be a credible distortion of the process and undue influence. By the way, 99 out of 100 of these 527s come from outside the State or district in which the money is spent. So I hope we can move forward on this legislation. I think it is compelling that we do so
I hope that we can sit down with others and get this legislation debated. As to the unanimous consent request I propounded, I would be glad to have amendments to it, other debate, depending on the will of Senators. We need to take up this issue and bring it under the control for which it cries out. I regret we were not able to do so at this time.
I yield the floor.