[Congressional Record Volume 151, Number 9 (Wednesday, February 2, 2005)]
[Senate]
[Pages S905-S906]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN (for himself, Mr. Feingold, Mr. Lott, Mr. 
        Lieberman, Mr. Schumer, Ms. Snowe, Ms. Collins, and Mr. 
        Salazar):
  S. 271. A bill to amend the Federal Election Campaign Act of 1971 to 
clarify when organizations described in section 527 of the Internal 
Revenue Code of 1986 must register as political committees, and for 
other purposes; to the Committee on Rules and Administration.
  Mr. McCAIN. Mr. President, I am pleased to be joined by my good 
friends and colleagues Senators Feingold from Wisconsin, and Lott from 
Mississippi, and our good friends who lead the campaign finance reform 
fight in the House, Representatives Shays and Meehan, in introducing a 
bill to end the illegal practice of 527 groups spending soft money on 
ads and other activities to influence Federal elections.
  As my colleagues know, a number of 527 groups raised and spent a 
substantial amount of soft money in a blatant effort to influence the 
outcome of last year's Presidential election. These activities are 
illegal under existing laws, and yet once again, the Federal Election 
Commission, FEC, has failed to do its job and has refused to do 
anything to stop these illegal activities. Therefore, we must pursue 
all possible steps to overturn the FEC's misinterpretation of the 
campaign finance laws, which is improperly allowing 527 groups whose 
purpose is to influence Federal elections to spend soft money on these 
efforts.
  According to an analysis by campaign finance scholar Tony Corrado, 
Federally oriented 527s spent $423 million on the 2004 elections. The 
same analysis shows that ten donors gave at least $4 million each to 
527s involved in the 2004 elections and two donors each contributed 
over $20 million.
  In September, we filed a lawsuit to overturn the FEC's failure to 
issue regulations to stop these illegal practices by 527 groups. 
President Bush and his campaign filed a similar lawsuit against the FEC 
as well, and I also appreciate President Bush's support for the 
legislative effort we begin today on 527s. Today, we are introducing 
legislation that will accomplish the same result. We are going to 
follow every possible avenue to stop 527 groups from effectively 
breaking the law, and doing what they are already prohibited from doing 
by longstanding laws.
  The bill we introduce today is simple. It would require that all 527s 
register as political committees and comply with Federal campaign 
finance laws, including Federal limits on the contributions they 
receive, unless the money they raise and spend is only in connection 
with non-Federal candidate elections, State or local ballot 
initiatives, or the nomination or confirmation of individuals to non-
elected offices.
  Additionally, this legislation would set new rules for Federal 
political committees that spend funds on voter mobilization efforts 
effecting both Federal and local races and, therefore, use both a 
Federal and a non-Federal account under FEC regulations. The new rules 
would prevent unlimited soft money from being channeled into Federal 
election activities by these Federal political committees.
  Under the new rules, at least half of the funds spent on these voter 
mobilization activities by Federal political committees would have to 
be hard money from their Federal account. More importantly, the funds 
raised for their non-Federal account would have to come from 
individuals and would be limited to no more than $25,000 per year per 
donor. Corporations and labor unions could not contribute to these non-
Federal accounts. To put it in simple terms, a George Soros could give 
$25,000 per year as opposed to $10 million to finance these activities.
  Let me be perfectly clear on one point here. Our proposal will not 
shut down 527s, it will simply require them to abide by the same 
Federal regulations every other Federal political committee must abide 
by in spending money to influence Federal elections.
  It is unfortunate that we even need to be here introducing this bill 
today. This legislation would not be necessary if it weren't for the 
abject failure of the FEC to enforce existing law. As my colleagues 
well know, some organizations, registered under section 527 of the 
Internal Revenue Code, had a major impact on last year's presidential 
election by raising and spending illegal soft money to run ads 
attacking both President Bush and Senator Kerry. The use of soft money 
to finance these activities is clearly illegal under current statute, 
and the fact that they have been allowed to continue unchecked is 
unconscionable.
  The blame for this lack of enforcement does not lie with the 
Congress, nor with the Administration. The blame for this continuing 
illegal activity lies squarely with the FEC. This agency has a duty to 
issue regulations to properly implement and enforce the Nation's 
campaign laws--and the FEC has failed, and it has failed miserably to 
carry out that responsibility. The Supreme Court found that to be the 
case in its McConnell decision, and Judge Kollar-Kotelly found that to 
be the case in her decision overturning 15 regulations incorrectly 
adopted by the FEC to implement the Bipartisan Campaign Reform Act of 
2002, BCRA. That is why a Los Angeles Times editorial stated that, 
``her decision would make a fitting obituary for an agency that 
deserves to die.'' We are not going to allow the destructive FEC to 
continue

[[Page S906]]

to undermine the Nation's campaign finance laws as it has been 
consistently doing for the past two decades.
  Opponents of campaign reform like to point out that the activities of 
these 527s serve as proof that BCRA has failed in its stated purpose to 
eliminate the corrupting influence of soft money in our political 
campaigns. Let me be perfectly clear on this. The 527 issue has nothing 
to do with BCRA, it has everything to do with the 1974 law and the 
failure of the FEC to do its job and properly regulate the activities 
of these groups.
  As further evidence of the FEC's lack of capability, let me quote 
from a couple of court decisions which highlight this agency's 
shortcomings. First, in its decision upholding the constitutionality of 
BCRA in McConnell v. FEC, the U.S. Supreme Court stated that the FEC 
had ``subverted'' the law, issued regulations that ``permitted more 
than Congress had ever intended,'' and ``invited widespread 
circumvention'' of FECA's limits on contributions. Additionally, in 
September, a Federal district court judge threw out 15 of the FEC's 
regulations implementing BCRA. Among the reasons for her actions were 
that one provision ``severely undermines FECA'' and would ``foster 
corruption'', another ``runs completely afoul'' of current law, another 
would ``render the statute largely meaningless'' and, finally, that 
another had ``no rational basis.''
  The track record of the FEC is clear and, by their continued 
stonewalling, the Commission has proven itself to be nothing more than 
a bureaucratic nightmare, and the time has come to put an end to its 
destructive tactics. The FEC has had ample, and well documented, 
opportunities to address the issue of the 527's illegal activities, and 
each time they have taken a pass, choosing instead to delay, postpone, 
and refuse to act.
  Enough is enough. It is time to stop wasting taxpayer's dollars on an 
agency that runs roughshod over the will of the Congress, the Supreme 
Court, the American people, and the Constitution. We've fought too long 
and too hard to sit back and allow this worthless agency to undermine 
the law.
  So, here is the bottom line: If the FEC won't do its job, and its 
commissioners have proven time and time again that they won't, then 
we'll do it for them. The bill Senators Feingold, Lott and I introduce 
today will put an end to the abusive, illegal practices of these 527s.
  I urge my colleagues to support swift passage of this bill and put an 
end to this problem once and for all.

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