Hearing Airs BCRA Criticism

Posted April 20, 2005 at 6:46pm

The House’s hearing on Wednesday examining the role of 527 organizations in federal elections quickly turned into a gripefest on the existing campaign finance system.

House Administration Chairman Bob Ney (R-Ohio) called the hearing to discuss two very different proposals to reduce the influence of groups that organize under Section 527 of the tax code. Such groups spent more than $400 million to influence the 2004 election.

The first bill, sponsored by Reps. Christopher Shays (R-Conn.) and Marty Meehan (D-Mass.), would prohibit the independent political organizations from raising and spending soft money and put them under the purview of the Federal Election Commission. The second, sponsored by Reps. Mike Pence (R-Ind.) and Albert Wynn (D-Md.), would leave 527s untouched and instead dramatically relax some of the restrictions on how the parties raise and spend hard money.

While much of the hearing focused on the merits of each proposal — with lawmakers debating whether it was better to “rein in” 527 groups or instead allow the parties to compete on a “more level playing field” — the most heated discussion centered on the efficacy of the whole campaign finance system, particularly the 2002 Bipartisan Campaign Reform Act.

Complete with elevated tones and emotional soliloquies, panelists and committee members of both parties frequently digressed into specific critiques about BCRA and the post-Watergate reforms that ushered in the modern era of campaign finance laws.

Ney complained that under BCRA he is effectively denied the ability to endorse nonfederal candidates through the use of his picture in materials paid for by their campaigns. Under a provision designed to prevent soft money from funding the distribution of materials promoting federal candidates, Ney said, the rule restricts legitimate state-party action by Members of Congress.

Rep. Robert Brady (D-Pa.) went on to lament that he still doesn’t understand what is permissible under the 2002 law, despite repeated consultations with expensive lawyers.

That critique led to perhaps the most dramatic remarks, which were delivered by Rep. John Doolittle. The California Republican said that while he’s inclined to vote for a bill dealing with 527s in some form, he doesn’t “feel good about it” because he thinks it is yet another step down “a slippery slope of regulation.”

Doolittle believes that for decades, the whole point of campaign finance legislation has been to take money out of politics. Almost shouting, Doolittle said that concept “was utter nonsense, is utter nonsense and will remain utter nonsense.” Instead, the California lawmaker said he would favor having no restrictions on raising or spending money for campaigns but requiring full and immediate disclosure.

AFL-CIO General Counsel Larry Gold said the only reason why those in favor of taking 527s out of the soft-money chase would cite statistics enumerating the amount such groups spent last cycle would be if they believed the amount of money itself was a problem.

Pence opined that he believes Congress doesn’t have “any business saying how much money should be spent.”

Such comments, and others, seemed to call into question the very underpinnings of campaign finance legislation enacted over the past three decades. Whether Wednesday’s hearing merely provided an outlet for perpetually simmering frustrations about campaign finance laws or signaled the beginning of a broader tide in the House away from the current legislative structure remains to be seen.

Shays said he welcomed the frank debate on the larger philosophical issues of campaign finance laws, and he lauded Doolittle in particular for his ideological consistency on the matter. At another point, he congratulated Democrats for leading the charge on campaign finance reform in 2002, but then chastised them for undermining the law they helped create by tacitly supporting the idea of 527s operating outside of the regulated political community. He followed that with laudatory remarks about his fellow Republicans’ willingness to ensure BCRA works even though many in the GOP opposed its passage.

Perhaps seeking to avoid some of the personal hostility that often surrounds debate about campaign finance issues, Pence praised Shays’ motivations and integrity during the hearing. And both men, along with Wynn, warmly greeted each other at the end of their panel’s testimony.

But such kind words did not undermine the lawmakers’ substantial disagreements on policy. Shays sharply questioned assertions by Pence, Wynn, Ney and others that the parties were fundamentally weakened by the 2002 legislation he helped draft.

“These parties are not hurting,” he said, pointing out that both the Republican and Democratic parties brought in a record number of small donations and raked in a total of $1.2 billion in the 2003-04 cycle. “I am pressed to see how they have suffered.”

If Congress chooses the Pence-Wynn route, Shays said, the parties and candidates could together effectively raise more than $3 million from a single individual per cycle, because their bill would remove the aggregate hard-dollar contribution limits. Those limits, enacted in 1974 in response to the Watergate scandals, cap the total amount individuals can contribute to all party committees and federal candidates in a two-year period.

Under current law, an individual can give a total of $61,400 to all party committees. Because there are no restrictions on transfers between state party committees and the national committees, under Pence-Wynn the maximum per-cycle donations to state parties — $20,000 per state times 50 states, totaling $1 million — could then be transferred to the national parties without restriction.

As it stands, individuals can also only give $40,000 per cycle to all federal candidates. Under Pence-Wynn, that would jump to $2 million, as individuals would only be restrained by the $4,200 limit per cycle to each candidate.

That means “you’ve effectively created a hard money that’s like soft money,” Shays said.