FEC Moves to Regulate Groups Opposing Bush

By Thomas B. Edsall
Washington Post Staff Writer
Thursday, February 19, 2004; Page A06


The Federal Election Commission decided yesterday that many of the political committees raising "soft" money to campaign against President Bush are subject to regulation, but it postponed deciding how tough the restrictions should be.

The FEC voted 4 to 2 to warn Americans for a Better Country that activities that "promote, attack, support or oppose" a federal candidate must be paid for with hard money, a type of political donation that, unlike soft money, has tight restrictions on sources and amounts. This is a broader standard than used in the past. Activities that benefit a mix of federal, state and local candidates are to be paid for with a mix of hard and soft money, the commission determined.

Interpretations of yesterday's action varied greatly.

FEC Vice Chairman Ellen L. Weintraub said the decision should not severely constrain those seeking to raise and spend soft money, which is not subject to limits and can come from unions and corporations as well as individuals. "I don't think sophisticated political actors would have a hard time figuring out how to work within this framework," she said.

Republican National Committee Chairman Ed Gillespie, in contrast, said the ruling will put out of business "groups like America Coming Together [ACT], the Media Fund, Partnership for America's Families and the MoveOn.org Voter Fund." All are pro-Democratic groups organized under Section 527 of the tax code.

These and other 527 committees, as they are known, are aiming to become a shadow version of the Democratic Party, financing television commercials and voter mobilization in 15 to 17 battleground states this fall. They plan to pay for some or all of their activities with large soft-money contributions.

The McCain-Feingold campaign finance law barred the national parties from accepting soft money, prompting the creation of many 527 committees. Campaign watchdog groups have challenged the groups' legality, and yesterday's FEC ruling was among the first to address their questions.

Harold Ickes, a former aide to President Bill Clinton and now head of the Media Fund, accused Gillespie of misconstruing the consequences of yesterday's FEC decisions to "inhibit our supporters and donors by his willful misreading."

Jim Jordan, spokesman for the Media Fund and ACT, two of the most ambitious pro-Democratic groups, said: "It's clear that today's action is limited in its scope. We remain confident that we'll have the room we need to operate robustly and effectively."

The Media Fund, which plans to run TV ads attacking Bush and supporting Democrats, and ACT, which plans to conduct voter mobilization in 17 battleground states, have a fundraising goal this year of $95 million each.

McCain-Feingold's restrictions on soft money have hurt the Democratic Party, which depended heavily on large contributions from unions and rich partisans to pay for issue ads and voter mobilization. The GOP has been far more successful raising still-legal hard money, which can involve contributions of up to $25,000 to the parties.

Key decisions yet to be made by the FEC include: If organizations such as ABC or ACT can spend a mix of hard and soft money, what rules will govern the ratio? And under what circumstance will 527 organizations -- such as the Media Fund, which is currently not registered with the FEC -- and politically active groups known as 501c4s, fall under FEC regulation?

In reports filed with the FEC, ACT has used an allocation formula allowing it to pay 98 percent of its costs with soft money and 2 percent with hard money. The FEC yesterday signaled it will reconsider such allocation formulas in May.

If ACT were required to spend hard and soft money equally, the committee would have to raise large amounts of difficult-to-come-by hard money, a costly and time-consuming process.

On philosophical, not partisan, grounds, two of the Republican commissioners -- Chairman Bradley A. Smith and David M. Mason -- voted against regulation of the Democratic groups, rejecting pressure from the RNC. "If Republicans think they can win by silencing their opponents, they are wrong," said Smith, and "they are going to deserve to lose."