[Congressional Record Volume 146, Number 75 (Thursday, June 15, 2000)]
[Senate]
[Page S5268]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SMITH of Oregon (for himself, Mr Abraham, Mr. Ashcroft, 
        Mr. Burns, Mr. Santorum, Mr. Gorton, Mrs. Hutchison, Mr. 
        Allard, Mr. Bennett, Mr. Coverdell, Mr. Gregg, Mr. Helms, Mr. 
        Thomas, Mr. Inhofe, Mr. Mack, Mr. Warner, Mr. Bunning, Mr. 
        Lott, Mr. McConnell, Mr. Crapo, and Mr. Roberts):
  S. 2742. A bill to amend the Internal Revenue Code of 1986 to 
increase disclosure for certain political organizations exempt from tax 
under section 527 and section 501(c), and for other purposes; read the 
first time.


            tax-exempt political disclosure act introduction

  Mr. SMITH of Oregon. Mr. President, I rise today to introduce 
legislation, co-sponsored by 20 of my Senate colleagues, to bring 
sunshine to our campaign finance laws, to provide for full disclosure 
of contributions and expenditures of groups which have heretofore not 
been held accountable, yet have been subsidized by the American people 
through their tax-exempt status.
  Joining me in this effort are Senators Abraham, Ashcroft, Burns, 
Santorum, Gorton, Hutchison, Allard, Bennett, Coverdell, Gregg, Helms, 
Thomas, Inhofe, Mack, Warner, Bunning, Lott, McConnell, Crapo, and 
Roberts.
  I have long been a proponent of full disclosure, to the extent it is 
consistent with the First Amendment, of campaign contributions and 
expenditures.
  If we are to rekindle the trust of the American people, not only must 
the political parties be held accountable, so, too, must those tax-
exempt groups which engage in political activities, yet heretofore have 
operated outside the realm of disclosure. The public has the right to 
know the identity of those trying to influence our elections, and 
Congress must do whatever it can to make sure that organizations do not 
wrongly benefit from the public subsidy of tax exemption.
  The bill we are introducing today, the Tax-Exempt Political 
Disclosure Act, expands upon the McCain-Lieberman amendment of last 
week which targeted a narrow list of tax-exempt organizations 
established under section 527 of the tax code. The so-called 527 groups 
covered in this bill do not make contributions to candidates or engage 
in express advocacy, and thus are not required to publicly disclose 
contributors or expenditures. Our bill contains in its entirety the 
provisions of the McCain-Lieberman amendment, but goes beyond the 527 
groups to require tax-exempt labor and business organizations, as well, 
to disclose their contributors and expenditures.

  Specifically, in Title I of our bill, which is identical to the 
McCain-Lieberman amendment, we require the subset of 527 organizations 
that are not already subject to the Federal Election Campaign Act to:
  1. Disclose their existence to the IRS;
  2. File publicly available tax returns;
  3. Publicly report expenditures of over $500; and
  4. Identify those who contribute more than $200 annually to the 
organization.
  Title II of our bill applies to business or labor organizations that 
are tax-exempt under sections 501(c)(5) or 501(c)(6) of the Internal 
Revenue Code and that spend $25,000 or more on the very same kinds of 
political activities engaged in by section 527 organizations covered by 
Title I of our bill. As we do with the 527 organizations, we require 
tax-exempt business and labor organizations to report expenditures for 
political activity of $500 or more and identify those who contribute 
more than $200 annually.
  Importantly, this legislation will not result in disclosure of any 
labor or business organization's membership lists because annual dues 
to these tax-exempt groups are excluded from the definition of 
``contribution.'' The bill requires disclosure only of those members 
who choose to contribute more than $200 annually for political 
purposes.
  If the Senate is for disclosure of the few tax-exempt 527 
organizations that may spend a couple of million dollars on issue ads, 
then surely we should advocate disclosure of the tax-exempt labor and 
business organizations that will spend twenty or forty times that 
amount of money on issue ads and other political activity. Our 
legislation will require these organizations receiving tax exempt 
status to emerge from the shadows and make some minimal disclosure 
about themselves and the source of their money.
  Tax exemption is not an entitlement, and any organization wanting to 
avoid the ramifications of claiming such status simply may choose not 
to seek that status. Our bill merely says that if a group engaging in 
political activity wants tax exempt status, the public has a right to 
expect certain things in return.
  Let me make clear that we are sincere in this effort, and we welcome 
and invite Senators McCain and Feingold to work with us. We are open to 
discussions with business and labor groups, as well, on the mechanics 
of the bill. We want to be flexible and will consider changes where 
appropriate.
  The bottom line, however, is that in the end there must be meaningful 
disclosure if we are to have the confidence of the American people and 
bring integrity to the process.
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