Under the new campaign finance law, Congressional leaders who raised millions of dollars in unregulated contributions to their own soft-money political action committees must cut all ties to such groups or face stiff penalties that could even include prison time.
Many lawmakers have decided to close down their PACs and distribute remaining funds to other organizations. According to forms filed with the Internal Revenue Service, the state PAC associated with Speaker Dennis Hastert (R-Ill.) will take a different approach and report its activity to Illinois election officials under a new name.
It appears to be the first leadership PAC associated with a federal elected official to morph into a new entity instead of ending its existence, according to Kent Cooper, co-founder of PoliticalMoneyLine, which tracks money and politics.
The KOMPAC State Victory Fund, which accepted soft-money contributions and was commonly referred to as a “527” because of the section of the Internal Revenue Code governing its activities, is now known as FoxPAC and under new management, according to forms filed this week with both the IRS and officials in Illinois. Hastert continues to be associated with KOMPAC the federal, hard-dollar component of his leadership PAC.
The PAC’s new chairman is Dallas Ingemunson, a long-time political mentor to Hastert and former chairman of the Kendall County GOP. Ingemunson was instrumental in boosting a young Hastert to his first election, to the Illinois state House in 1980.
FoxPAC reported that it had $85,033 in its coffers as of Dec. 31, 2002. When it was named KOMPAC, it reported raising more than $343,000 in the last six months of 2002, including taking $100,000 contributed by the National Republican Congressional Committee in October.
Hastert officially resigned as honorary chairman of KOMPAC on Nov. 2, four days before the new campaign finance law’s ban on soft money took effect.
FoxPAC won’t have to report its activities to the IRS under the newly amended provisions of the 527 reporting law, which allows state and local political groups that already file with state authorities to avoid a separate IRS filing.
Many Democrats and a few Republicans have elected to simply close down their PACs, according to Cooper, who noted that reports on such activity are still being processed at the IRS.