The Mother Of All Loopholes
April 7, 2000 -- There's a bogeyman stealing through the night to snatch away your dreams of an open, fair election, says Common Cause. It's called the 527 committee, and it can accept unlimited donations from anonymous contributors, and translate the money into political research, mailings, or television ads.
An earnest clutch of congressional lawmakers joined Scott Harshbarger, the president of Common Cause, at a Friday press conference on the grounds of the U.S. Capitol. All support legislation to close the 527 loophole, or at least to force such groups to disclose the source of their funds. And all denounced 527s in ringing terms.
527 money "is corrupting our very democratic institutions. It is corrupting every member in the House and every member in the Senate who touches it," said Rep. Chris Shays, D-Conn.
"This is the boldest and brashest loophole" in the campaign finance laws, Harshbarger complained, and it takes us back "to the off-the-books slush funds of the Watergate era."
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527 committees are entirely legal. They flourish because of a gap between IRS laws and Federal Election Campaign Act laws, which permits political groups to rake in as much money as they like without disclosing where they got it, as long as they never endorse a specific candidate. But critics snort at that provision, saying 527s regularly flout it.
At their best, 527s "inform the public as to where various candidates and incumbents stand on issues the public might not otherwise hear about," argued Greg Colvin. His law firm, Silk, Adler ad Colvin, has set up 527 committees for several progressive issue groups. But at the worst, Colvin added, "there's the potential for private interests that want to pursue self-serving ends... to manipulate the political process by overwhelming it with money, and they can escape from public notice."
In theory, a 527 committee airs only issue ads, never ads for candidates. But, "these issue ads are not about issues at all," said Sen. Russ Feingold, D-Wisconsin.
His co-sponsor on a campaign finance reform bill, Sen. John McCain, R-Ariz., fumed that 527 committees are "disgraceful and outrageous." McCain himself was, you'll recall, the victim of a 527 ad. The fly-by-night Texans for Clean Air committee ran that famous ad berating the Senator's environmental record, and touting Governor Bush's. The ad was legal because it never said, "Vote for George W. Bush." But it was unsavory because it broadly hinted you should do so.
Common Cause maintains that ad, and others like it, blurred the line between seeking to influence elections (legal for 527 committees) and seeking to elect or defeat a specific candidate (illegal for 527 committees).
Since that line is as fine as the angels who dance on proverbial pins, Congress wants at least to require the committees to disclose the source of their funding. At the base of election laws, said Sen. Joseph Lieberman, D-Conn., is that "people have the right to know who is trying to influence their votes, and the 527 rule violates that principle in the most outrageous way."
But some think more federal rules about funding are not the answer. Jonathan Baron is a spokesman for Rep. Tom DeLay, R-Texas, the House Majority Whip who raises funds for a 527 group called the Republican Majority Issues Committee. "The current complexities and oddities of existing campaign finance law are the result of government intervention in free speech, so it's hard to see how further bureaucratic influence will make things less rather than more complicated or convoluted," Baron said.
"There's a place in American politics for anonymous speech, and anonymous membership and anonymous giving," Colvin suggested. He thinks full disclosure should become the norm as an election draws closer and larger contributions come into play. But farther from an election, and with smaller amounts of money, he supports "allowing people privacy of association."
There's a knee-jerk tendency to say that all disclosure, all the time, is the answer, but the American public already condones exceptions to that rule.
"Confidential news sources," said Chip Nielsen, the general counsel for Shape the Debate (the group ran last month's "Hypocrisy" ad making fun of Al Gore's views on campaign finance). Nielsen said the public has accepted that those sources shouldn't be disclosed. "The trade off is anonymous criticism. Some think that's no worse or better than anonymous contrbutions to an issue group," he said.