Congressional Record, Volume 152 Issue 42 (Wednesday, April 5, 2006)

[Congressional Record Volume 152, Number 42 (Wednesday, April 5, 2006)]
[House]
[Pages H1514-H1529]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

527 REFORM ACT OF 2005

Mr. EHLERS. Mr. Speaker, pursuant to House Resolution 755, I call up
the bill (H.R. 513) 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, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. LaHood). Pursuant to House Resolution
755, the bill is considered read.
The text of H.R. 513 is as follows:

H.R. 513

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``527 Reform Act of 2005''.

[[Page H1515]]

SEC. 2. TREATMENT OF SECTION 527 ORGANIZATIONS.

(a) Definition of Political Committee.--Section 301(4) of
the Federal Election Campaign Act of 1971 (2 U.S.C. 431(4))
is amended by striking the period at the end of subparagraph
(C) and inserting ``; or'' and by adding at the end the
following:
``(D) any applicable 527 organization.''.
(b) Definition of Applicable 527 Organization.--Section 301
of the Federal Election Campaign Act of 1971 (2 U.S.C. 431)
is amended by adding at the end the following new paragraph:
``(27) Applicable 527 organization.--For purposes of
paragraph (4)(D)--
``(A) In general.--The term `applicable 527 organization'
means a committee, club, association, or group of persons
that--
``(i) is an organization described in section 527 of the
Internal Revenue Code of 1986, and
``(ii) is not described in subparagraph (B).
``(B) Excepted organizations.--Subject to subparagraph (D),
a committee, club, association, or other group of persons
described in this subparagraph is--
``(i) an organization described in section 527(i)(5) of the
Internal Revenue Code of 1986,
``(ii) an organization which is a committee, club,
association or other group of persons that is organized,
operated, and makes disbursements exclusively for paying
expenses described in the last sentence of section 527(e)(2)
of the Internal Revenue Code of 1986 or expenses of a
newsletter fund described in section 527(g) of such Code, or
``(iii) an organization which is a committee, club,
association, or other group of persons whose election or
nomination activities relate exclusively to--

``(I) elections where no candidate for Federal office
appears on the ballot, or
``(II) one or more of the purposes described in
subparagraph (C).

``(C) Allowable purposes.--The purposes described in this
subparagraph are the following:
``(i) Influencing the selection, nomination, election, or
appointment of one or more candidates to non-Federal offices.
``(ii) Influencing one or more State or local ballot
initiatives, State or local referenda, State or local
constitutional amendments, State or local bond issues, or
other State or local ballot issues.
``(iii) Influencing the selection, appointment, nomination,
or confirmation of one or more individuals to non-elected
offices.
``(D) Section 527 organizations making certain
disbursements.--A committee, club, association, or other
group of persons described in subparagraph (B)(ii) or
(B)(iii) shall not be considered to be described in such
paragraph for purposes of subparagraph (A)(ii) if it makes
disbursements aggregating more than $1000 during any calendar
year for any of the following:
``(i) A public communication that promotes, supports,
attacks, or opposes a clearly identified candidate for
Federal office during the 1-year period ending on the date of
the general election for the office sought by the clearly
identified candidate occurs.
``(ii) Any voter drive activity (as defined in section
325(d)(1)).''.

SEC. 3. RULES FOR ALLOCATION OF EXPENSES BETWEEN FEDERAL AND
NON-FEDERAL ACTIVITIES.

(a) In General.--Title III of the Federal Election Campaign
Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at
the end the following:

``SEC. 325. ALLOCATION AND FUNDING RULES FOR CERTAIN EXPENSES
RELATING TO FEDERAL AND NON-FEDERAL ACTIVITIES.

``(a) In General.--In the case of any disbursements by any
separate segregated fund or nonconnected committee for which
allocation rules are provided under subsection (b)--
``(1) the disbursements shall be allocated between Federal
and non-Federal accounts in accordance with this section and
regulations prescribed by the Commission, and
``(2) in the case of disbursements allocated to non-Federal
accounts, may be paid only from a qualified non-Federal
account.
``(b) Costs to Be Allocated and Allocation Rules.--
Disbursements by any separate segregated fund or nonconnected
committee for any of the following categories of activity
shall be allocated as follows:
``(1) 100 percent of the expenses for public communications
or voter drive activities that refer to one or more clearly
identified Federal candidates, but do not refer to any
clearly identified non-Federal candidates, shall be paid with
funds from a Federal account, without regard to whether the
communication refers to a political party.
``(2) At least 50 percent of the expenses for public
communications and voter drive activities that refer to one
or more clearly identified candidates for Federal office and
one or more clearly defined non-Federal candidates shall be
paid with funds from a Federal account, without regard to
whether the communication refers to a political party.
``(3) At least 50 percent of the expenses for public
communications or voter drive activities that refer to a
political party, but do not refer to any clearly identified
Federal or non-Federal candidate, shall be paid with funds
from a Federal account, except that this paragraph shall not
apply to communications or activities that relate exclusively
to elections where no candidate for Federal office appears on
the ballot.
``(4) At least 50 percent of the expenses for public
communications or voter drive activities that refer to a
political party, and refer to one or more clearly identified
non-Federal candidates, but do not refer to any clearly
identified Federal candidates, shall be paid with funds from
a Federal account, except that this paragraph shall not apply
to communications or activities that relate exclusively to
elections where no candidate for Federal office appears on
the ballot.
``(5) At least 50 percent of any administrative expenses,
including rent, utilities, office supplies, and salaries not
attributable to a clearly identified candidate, shall be paid
with funds from a Federal account, except that for a separate
segregated fund such expenses may be paid instead by its
connected organization.
``(6) At least 50 percent of the direct costs of a
fundraising program or event, including disbursements for
solicitation of funds and for planning and administration of
actual fundraising events, where Federal and non-Federal
funds are collected through such program or event shall be
paid with funds from a Federal account, except that for a
separate segregated fund such costs may be paid instead by
its connected organization.
``(c) Qualified Non-Federal Account.--For purposes of this
section--
``(1) In general.--The term `qualified non-Federal account'
means an account which consists solely of amounts--
``(A) that, subject to the limitations of paragraphs (2)
and (3), are raised by the separate segregated fund or
nonconnected committee only from individuals, and
``(B) with respect to which all other requirements of
Federal, State, or local law are met.
``(2) Limitation on individual donations.--
``(A) In general.--A separate segregated fund or
nonconnected committee may not accept more than $25,000 in
funds for its qualified non-Federal account from any one
individual in any calendar year.
``(B) Affiliation.--For purposes of this paragraph, all
qualified non-Federal accounts of separate segregated funds
or nonconnected committees which are directly or indirectly
established, financed, maintained, or controlled by the same
person or persons shall be treated as one account.
``(3) Fundraising limitation.--No donation to a qualified
non-Federal account may be solicited, received, directed,
transferred, or spent by or in the name of any person
described in subsection (a) or (e) of section 323.
``(d) Definitions.--For purposes of this section--
``(1) Voter drive activity.--The term `voter drive
activity' means any of the following activities conducted in
connection with an election in which a candidate for Federal
office appears on the ballot (regardless of whether a
candidate for State or local office also appears on the
ballot):
``(A) Voter registration activity.
``(B) Voter identification.
``(C) Get-out-the-vote activity.
``(D) Generic campaign activity.

Such term shall not include any activity described in
subparagraph (A) or (B) of section 316(b)(2).
``(2) Federal account.--The term `Federal account' means an
account which consists solely of contributions subject to the
limitations, prohibitions, and reporting requirements of this
Act. Nothing in this section or in section 323(b)(2)(B)(iii)
shall be construed to infer that a limit other than the limit
under section 315(a)(1)(C) applies to contributions to the
account.
``(3) Nonconnected committee.--The term `nonconnected
committee' shall not include a political committee of a
political party.''.
(b) Reporting Requirements.--Section 304(e) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 434(e)) is amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5); and
(2) by inserting after paragraph (2) the following new
paragraph:
``(3) Receipts and disbursements from qualified non-federal
accounts.--In addition to any other reporting requirement
applicable under this Act, a political committee to which
section 325(a) applies shall report all receipts and
disbursements from a qualified non-Federal account (as
defined in section 325(c)).''.

SEC. 4. CONSTRUCTION.

No provision of this Act, or amendment made by this Act,
shall be construed--
(1) as approving, ratifying, or endorsing a regulation
promulgated by the Federal Election Commission,
(2) as establishing, modifying, or otherwise affecting the
definition of political organization for purposes of the
Internal Revenue Code of 1986, or
(3) as affecting the determination of whether a group
organized under section 501(c) of the Internal Revenue Code
of 1986 is a political committee under section 301(4) of the
Federal Election Campaign Act of 1971.

SEC. 5. JUDICIAL REVIEW.

(a) Special Rules for Actions Brought on Constitutional
Grounds.--If any action is brought for declaratory or
injunctive relief to challenge the constitutionality of any
provision of this Act or any amendment made by this Act, the
following rules shall apply:
(1) The action shall be filed in the United States District
Court for the District of Columbia and shall be heard by a 3-
judge court convened pursuant to section 2284 of title 28,
United States Code.
(2) A copy of the complaint shall be delivered promptly to
the Clerk of the House of Representatives and the Secretary
of the Senate.

[[Page H1516]]

(3) A final decision in the action shall be reviewable only
by appeal directly to the Supreme Court of the United States.
Such appeal shall be taken by the filing of a notice of
appeal within 10 days, and the filing of a jurisdictional
statement within 30 days, of the entry of the final decision.
(4) It shall be the duty of the United States District
Court for the District of Columbia and the Supreme Court of
the United States to advance on the docket and to expedite to
the greatest possible extent the disposition of the action
and appeal.
(b) Intervention by Members of Congress.--In any action in
which the constitutionality of any provision of this Act or
any amendment made by this Act is raised (including but not
limited to an action described in subsection (a)), any Member
of the House of Representatives (including a Delegate or
Resident Commissioner to Congress) or Senate shall have the
right to intervene either in support of or opposition to the
position of a party to the case regarding the
constitutionality of the provision or amendment. To avoid
duplication of efforts and reduce the burdens placed on the
parties to the action, the court in any such action may make
such orders as it considers necessary, including orders to
require intervenors taking similar positions to file joint
papers or to be represented by a single attorney at oral
argument.
(c) Challenge by Members of Congress.--Any Member of
Congress may bring an action, subject to the special rules
described in subsection (a), for declaratory or injunctive
relief to challenge the constitutionality of any provision of
this Act or any amendment made by this Act.
(d) Applicability.--
(1) Initial claims.--With respect to any action initially
filed on or before December 31, 2006, the provisions of
subsection (a) shall apply with respect to each action
described in such subsection.
(2) Subsequent actions.--With respect to any action
initially filed after December 31, 2006, the provisions of
subsection (a) shall not apply to any action described in
such subsection unless the person filing such action elects
such provisions to apply to the action.

SEC. 6. EFFECTIVE DATE.

The amendments made by this Act shall take effect on the
date which is 60 days after the date of the enactment of this
Act.

The SPEAKER pro tempore. The amendment in the nature of a substitute
printed in the bill, modified by amendment No. 1 for printing in the
Congressional Record, is adopted.
The text of the bill, as amended, is as follows:

H.R. 513

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``527 Reform Act of 2006''.

SEC. 2. TREATMENT OF SECTION 527 ORGANIZATIONS.

(a) Definition of Political Committee.--Section 301(4) of
the Federal Election Campaign Act of 1971 (2 U.S.C. 431(4))
is amended--
(1) by striking the period at the end of subparagraph (C)
and inserting ``; or''; and
(2) by adding at the end the following:
``(D) any applicable 527 organization.''.
(b) Definition of Applicable 527 Organization.--Section 301
of such Act (2 U.S.C. 431) is amended by adding at the end
the following new paragraph:
``(27) Applicable 527 organization.--
``(A) In general.--For purposes of paragraph (4)(D), the
term `applicable 527 organization' means a committee, club,
association, or group of persons that--
``(i) has given notice to the Secretary of the Treasury
under section 527(i) of the Internal Revenue Code of 1986
that it is to be treated as an organization described in
section 527 of such Code; and
``(ii) is not described in subparagraph (B).
``(B) Excepted organizations.--A committee, club,
association, or other group of persons described in this
subparagraph is--
``(i) an organization described in section 527(i)(5) of the
Internal Revenue Code of 1986;
``(ii) an organization which is a committee, club,
association or other group of persons that is organized,
operated, and makes disbursements exclusively for paying
expenses described in the last sentence of section 527(e)(2)
of the Internal Revenue Code of 1986 or expenses of a
newsletter fund described in section 527(g) of such Code;
``(iii) an organization which is a committee, club,
association, or other group that consists solely of
candidates for State or local office, individuals holding
State or local office, or any combination of either, but only
if the organization refers only to one or more non-Federal
candidates or applicable State or local issues in all of its
voter drive activities and does not refer to a Federal
candidate or a political party in any of its voter drive
activities; or
``(iv) an organization described in subparagraph (C).
``(C) Applicable organization.--For purposes of
subparagraph (B)(iv), an organization described in this
subparagraph is a committee, club, association, or other
group of persons whose election or nomination activities
relate exclusively to--
``(i) elections where no candidate for Federal office
appears on the ballot; or
``(ii) one or more of the following purposes:
``(I) Influencing the selection, nomination, election, or
appointment of one or more candidates to non-Federal offices.
``(II) Influencing one or more applicable State or local
issues.
``(III) Influencing the selection, appointment, nomination,
or confirmation of one or more individuals to non-elected
offices.
``(D) Exclusivity test.--A committee, club, association, or
other group of persons shall not be treated as meeting the
exclusivity requirement of subparagraph (C) if it makes
disbursements aggregating more than $1,000 for any of the
following:
``(i) A public communication that promotes, supports,
attacks, or opposes a clearly identified candidate for
Federal office during the 1-year period ending on the date of
the general election for the office sought by the clearly
identified candidate (or, if a runoff election is held with
respect to such general election, on the date of the runoff
election).
``(ii) Any voter drive activity during a calendar year,
except that no disbursements for any voter drive activity
shall be taken into account under this subparagraph if the
committee, club, association, or other group of persons
during such calendar year--
``(I) makes disbursements for voter drive activities with
respect to elections in only 1 State and complies with all
applicable election laws of that State, including laws
related to registration and reporting requirements and
contribution limitations;
``(II) refers to one or more non-Federal candidates or
applicable State or local issues in all of its voter drive
activities and does not refer to any Federal candidate or any
political party in any of its voter drive activities;
``(III) does not have a candidate for Federal office, an
individual who holds any Federal office, a national political
party, or an agent of any of the foregoing, control or
materially participate in the direction of the organization,
solicit contributions to the organization (other than funds
which are described under clauses (i) and (ii) of section
323(e)(1)(B)), or direct disbursements, in whole or in part,
by the organization; and
``(IV) makes no contributions to Federal candidates.
``(E) Certain references to federal candidates not taken
into account.--For purposes of subparagraphs (B)(iii) and
(D)(ii)(II), a voter drive activity shall not be treated as
referring to a clearly identified Federal candidate if the
only reference to the candidate in the activity is--
``(i) a reference in connection with an election for a non-
Federal office in which such Federal candidate is also a
candidate for such non-Federal office; or
``(ii) a reference to the fact that the candidate has
endorsed a non-Federal candidate or has taken a position on
an applicable State or local issue, including a reference
that constitutes the endorsement or position itself.
``(F) Certain references to political parties not taken
into account.--For purposes of subparagraphs (B)(iii) and
(D)(ii)(II), a voter drive activity shall not be treated as
referring to a political party if the only reference to the
party in the activity is--
``(i) a reference for the purpose of identifying a non-
Federal candidate;
``(ii) a reference for the purpose of identifying the
entity making the public communication or carrying out the
voter drive activity; or
``(iii) a reference in a manner or context that does not
reflect support for or opposition to a Federal candidate or
candidates and does reflect support for or opposition to a
State or local candidate or candidates or an applicable State
or local issue.
``(G) Applicable state or local issue.--For purposes of
this paragraph, the term `applicable State or local issue'
means any State or local ballot initiative, State or local
referendum, State or local constitutional amendment, State or
local bond issue, or other State or local ballot issue.''.
(c) Definition of Voter Drive Activity.--Section 301 of
such Act (2 U.S.C. 431), as amended by subsection (b), is
further amended by adding at the end the following new
paragraph:
``(28) Voter drive activity.--The term `voter drive
activity' means any of the following activities conducted in
connection with an election in which a candidate for Federal
office appears on the ballot (regardless of whether a
candidate for State or local office also appears on the
ballot):
``(A) Voter registration activity.
``(B) Voter identification.
``(C) Get-out-the-vote activity.
``(D) Generic campaign activity.
``(E) Any public communication related to activities
described in subparagraphs (A) through (D).

Such term shall not include any activity described in
subparagraph (A) or (B) of section 316(b)(2).''.

SEC. 3. RULES FOR ALLOCATION OF EXPENSES BETWEEN FEDERAL AND
NON-FEDERAL ACTIVITIES.

(a) In General.--Title III of the Federal Election Campaign
Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at
the end the following:

``SEC. 325. ALLOCATION AND FUNDING RULES FOR CERTAIN EXPENSES
RELATING TO FEDERAL AND NON-FEDERAL ACTIVITIES.

``(a) In General.--In the case of any disbursements by any
political committee that is a separate segregated fund or
nonconnected committee for which allocation rules are
provided under subsection (b)--
``(1) the disbursements shall be allocated between Federal
and non-Federal accounts in accordance with this section and
regulations prescribed by the Commission; and
``(2) in the case of disbursements allocated to non-Federal
accounts, may be paid only from a qualified non-Federal
account.

[[Page H1517]]

``(b) Costs to Be Allocated and Allocation Rules.--
``(1) In general.--Disbursements by any separate segregated
fund or nonconnected committee, other than an organization
described in section 323(b)(1), for any of the following
categories of activity shall be allocated as follows:
``(A) 100 percent of the expenses for public communications
or voter drive activities that refer to one or more clearly
identified Federal candidates, but do not refer to any
clearly identified non-Federal candidates, shall be paid with
funds from a Federal account, without regard to whether the
communication refers to a political party.
``(B) At least 50 percent, or a greater percentage if the
Commission so determines by regulation, of the expenses for
public communications and voter drive activities that refer
to one or more clearly identified candidates for Federal
office and one or more clearly identified non-Federal
candidates shall be paid with funds from a Federal account,
without regard to whether the communication refers to a
political party.
``(C) At least 50 percent, or a greater percentage if the
Commission so determines by regulation, of the expenses for
public communications or voter drive activities that refer to
a political party, but do not refer to any clearly identified
Federal or non-Federal candidate, shall be paid with funds
from a Federal account, except that this paragraph shall not
apply to communications or activities that relate exclusively
to elections where no candidate for Federal office appears on
the ballot.
``(D) At least 50 percent, or a greater percentage if the
Commission so determines by regulation, of the expenses for
public communications or voter drive activities that refer to
a political party and refer to one or more clearly identified
non-Federal candidates, but do not refer to any clearly
identified Federal candidates, shall be paid with funds from
a Federal account, except that this paragraph shall not apply
to communications or activities that relate exclusively to
elections where no candidate for Federal office appears on
the ballot.
``(E) Unless otherwise determined by the Commission in its
regulations, at least 50 percent of any administrative
expenses, including rent, utilities, office supplies, and
salaries not attributable to a clearly identified candidate,
shall be paid with funds from a Federal account, except that
for a separate segregated fund such expenses may be paid
instead by its connected organization.
``(F) At least 50 percent, or a greater percentage if the
Commission so determines by regulation, of the direct costs
of a fundraising program or event, including disbursements
for solicitation of funds and for planning and administration
of actual fundraising events, where Federal and non-Federal
funds are collected through such program or event shall be
paid with funds from a Federal account, except that for a
separate segregated fund such costs may be paid instead by
its connected organization. This paragraph shall not apply to
any fundraising solicitations or any other activity that
constitutes a public communication.
``(2) Certain references to federal candidates not taken
into account.--For purposes of paragraph (1), a public
communication or voter drive activity shall not be treated as
referring to a clearly identified Federal candidate if the
only reference to the candidate in the communication or
activity is--
``(A) a reference in connection with an election for a non-
Federal office in which such Federal candidate is also a
candidate for such non-Federal office; or
``(B) a reference to the fact that the candidate has
endorsed a non-Federal candidate or has taken a position on
an applicable State or local issue (as defined in section
301(27)(G)), including a reference that constitutes the
endorsement or position itself.
``(3) Certain references to political parties not taken
into account.--For purposes of paragraph (1), a public
communication or voter drive activity shall not be treated as
referring to a political party if the only reference to the
party in the communication or activity is--
``(A) a reference for the purpose of identifying a non-
Federal candidate;
``(B) a reference for the purpose of identifying the entity
making the public communication or carrying out the voter
drive activity; or
``(C) a reference in a manner or context that does not
reflect support for or opposition to a Federal candidate or
candidates and does reflect support for or opposition to a
State or local candidate or candidates or an applicable State
or local issue.
``(c) Qualified Non-Federal Account.--
``(1) In general.--For purposes of this section, the term
`qualified non-Federal account' means an account which
consists solely of amounts--
``(A) that, subject to the limitations of paragraphs (2)
and (3), are raised by the separate segregated fund or
nonconnected committee only from individuals, and
``(B) with respect to which all requirements of Federal,
State, or local law (including any law relating to
contribution limits) are met.
``(2) Limitation on individual donations.--
``(A) In general.--A separate segregated fund or
nonconnected committee may not accept more than $25,000 in
funds for its qualified non-Federal account from any one
individual in any calendar year.
``(B) Affiliation.--For purposes of this paragraph, all
qualified non-Federal accounts of separate segregated funds
or nonconnected committees which are directly or indirectly
established, financed, maintained, or controlled by the same
person or persons shall be treated as one account.
``(3) Fundraising limitation.--
``(A) In general.--No donation to a qualified non-Federal
account may be solicited, received, directed, transferred, or
spent by or in the name of any person described in subsection
(a) or (e) of section 323.
``(B) Funds not treated as subject to act.--Except as
provided in subsection (a)(2) and this subsection, any funds
raised for a qualified non-Federal account in accordance with
the requirements of this section shall not be considered
funds subject to the limitations, prohibitions, and reporting
requirements of this Act for any purpose (including for
purposes of subsection (a) or (e) of section 323 or
subsection (d)(1) of this section).
``(d) Definitions.--
``(1) Federal account.--The term `Federal account' means an
account which consists solely of contributions subject to the
limitations, prohibitions, and reporting requirements of this
Act. Nothing in this section or in section 323(b)(2)(B)(iii)
shall be construed to infer that a limit other than the limit
under section 315(a)(1)(C) applies to contributions to the
account.
``(2) Nonconnected committee.--The term `nonconnected
committee' shall not include a political committee of a
political party.
``(3) Voter drive activity.--The term `voter drive
activity' has the meaning given such term in section
301(28).''.
(b) Reporting Requirements.--Section 304(e) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 434(e)) is amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5); and
(2) by inserting after paragraph (2) the following new
paragraph:
``(3) Receipts and disbursements from qualified non-federal
accounts.--In addition to any other reporting requirement
applicable under this Act, a political committee to which
section 325(a) applies shall report all receipts and
disbursements from a qualified non-Federal account (as
defined in section 325(c)).''.

SEC. 4. REPEAL OF LIMIT ON AMOUNT OF PARTY EXPENDITURES ON
BEHALF OF CANDIDATES IN GENERAL ELECTIONS.

(a) Repeal of Limit.--Section 315(d) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441a(d)) is amended--
(1) in paragraph (1)--
(A) by striking ``(1) Notwithstanding any other provision
of law with respect to limitations on expenditures or
limitations on contributions, the national committee'' and
inserting ``Notwithstanding any other provision of law with
respect to limitations on amounts of expenditures or
contributions, a national committee'',
(B) by striking ``the general'' and inserting ``any'', and
(C) by striking ``Federal office, subject to the
limitations contained in paragraphs (2), (3), and (4) of this
subsection'' and inserting ``Federal office in any amount'';
and
(2) by striking paragraphs (2), (3), and (4).
(b) Conforming Amendments.--
(1) Indexing.--Section 315(c) of such Act (2 U.S.C.
441a(c)) is amended--
(A) in paragraph (1)(B)(i), by striking ``(d),''; and
(B) in paragraph (2)(B)(i), by striking ``subsections (b)
and (d)'' and inserting ``subsection (b)''.
(2) Increase in limits for senate candidates facing wealthy
opponents.--Section 315(i) of such Act (2 U.S.C. 441a(i)(1))
is amended--
(A) in paragraph (1)(C)(iii)--

(i) by adding ``and'' at the end of subclause (I),
(ii) in subclause (II), by striking ``; and'' and inserting
a period, and
(iii) by striking subclause (III);

(B) in paragraph (2)(A) in the matter preceding clause (i),
by striking ``, and a party committee shall not make any
expenditure,'';
(C) in paragraph (2)(A)(ii), by striking ``and party
expenditures previously made''; and
(D) in paragraph (2)(B), by striking ``and a party shall
not make any expenditure''.
(3) Increase in limits for house candidates facing wealthy
opponents.--Section 315A(a) of such Act (2 U.S.C. 441a--1(a))
is amended--
(A) in paragraph (1)--

(i) by adding `'and'' at the end of subparagraph (A),
(ii) in subparagraph (B), by striking ``; and'' and
inserting a period, and
(iii) by striking subparagraph (C);

(B) in paragraph (3)(A) in the matter preceding clause (i),
by striking ``, and a party committee shall not make any
expenditure,'';
(C) in paragraph (3)(A)(ii), by striking ``and party
expenditures previously made''; and

(D) in paragraph (3)(B), by striking ``and a party shall
not make any expenditure.''

SEC. 5. CONSTRUCTION.

No provision of this Act, or amendment made by this Act,
shall be construed--
(1) as approving, ratifying, or endorsing a regulation
promulgated by the Federal Election Commission;
(2) as establishing, modifying, or otherwise affecting the
definition of political organization for purposes of the
Internal Revenue Code of 1986; or
(3) as affecting the determination of whether a group
organized under section 501(c) of the Internal Revenue Code
of 1986 is a political committee under section 301(4) of the
Federal Election Campaign Act of 1971.

SEC. 6. JUDICIAL REVIEW.

[[Page H1518]]

(2) A copy of the complaint shall be delivered promptly to
the Clerk of the House of Representatives and the Secretary
of the Senate.
(3) A final decision in the action shall be reviewable only
by appeal directly to the Supreme Court of the United States.
Such appeal shall be taken by the filing of a notice of
appeal within 10 days, and the filing of a jurisdictional
statement within 30 days, of the entry of the final decision.
(4) It shall be the duty of the United States District
Court for the District of Columbia and the Supreme Court of
the United States to advance on the docket and to expedite to
the greatest possible extent the disposition of the action
and appeal.
(b) Intervention by Members of Congress.--In any action in
which the constitutionality of any provision of this Act or
any amendment made by this Act is raised (including but not
limited to an action described in subsection (a)), any Member
of the House of Representatives (including a Delegate or
Resident Commissioner to Congress) or Senate shall have the
right to intervene either in support of or opposition to the
position of a party to the case regarding the
constitutionality of the provision or amendment. To avoid
duplication of efforts and reduce the burdens placed on the
parties to the action, the court in any such action may make
such orders as it considers necessary, including orders to
require intervenors taking similar positions to file joint
papers or to be represented by a single attorney at oral
argument.
(c) Challenge by Members of Congress.--Any Member of
Congress may bring an action, subject to the special rules
described in subsection (a), for declaratory or injunctive
relief to challenge the constitutionality of any provision of
this Act or any amendment made by this Act.
(d) Applicability.--
(1) Initial claims.--With respect to any action initially
filed on or before December 31, 2008, the provisions of
subsection (a) shall apply with respect to each action
described in such subsection.
(2) Subsequent actions.--With respect to any action
initially filed after December 31, 2008, the provisions of
subsection (a) shall not apply to any action described in
such subsection unless the person filing such action elects
such provisions to apply to the action.

SEC. 7. EFFECTIVE DATE.

The amendments made by this Act shall take effect on the
date of the enactment of this Act.

The SPEAKER pro tempore. The gentleman from Michigan (Mr. Ehlers) and
the gentlewoman from California (Ms. Millender-McDonald) each will
control 30 minutes.
The Chair recognizes the gentleman from Michigan.
Mr. EHLERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 513, the 527 Reform Act of
2006. Today we have an opportunity to right one of the wrongs of the
Bipartisan Campaign Reform Act of 2002. All my friends on the other
side of the aisle who voted for BCRA because they believed we needed to
get soft money out of politics must support this legislation today
because it does indeed get the soft money out of politics.
Just a word of explanation. I have used the term ``BCRA.'' That is
the acronym for Bipartisan Campaign Reform Act, which we worked on
very, very hard a few years ago to get the soft money out of politics.
What do we mean by soft money? That is money that is unregulated, both
in quantity and disclosure to the Federal Election Commission.
While BCRA was supposed to curtail the influence of soft money in
Federal elections, it did not achieve that goal. In the 2004 election
cycle, the first conducted under the rules imposed by BCRA, over a half
a billion dollars in soft money was spent to influence the outcome.
Just four individuals alone spent over $73 million total.

{time} 1700

While BCRA was supposed to reduce the influence of special interests,
it actually empowered these ideologically driven outside groups. The
power these outside groups gained came at the direct expense of
political parties which saw many of the activities they had
traditionally performed limited by BCRA, and thence taken over by these
new organizations, the 527s. Again, let me explain, the term 527 refers
to the section of IRS Code which governs their operation, and we simply
use that designation for them.
We now have a system where soft money continues to thrive. Our
political parties, especially those at the State and local level, are
increasingly unable to carry out core functions such as voter
registration activities. We now have a system where the influence of
billionaires is greatly enhanced. In some cases, representatives of
527s have made boasts about taking over the party. For example, Eli
Pariser of MoveOn.org sent an e-mail to supporters after the 2004
elections stating, ``Now it's our party. We bought it, we own it, and
we're going to take it back.'' What more evidence do we need of the
corruption that has appeared here? This does not represent progress.
Today we have an opportunity to reverse this negative trend, and this
bill will help restore some balance to our system.
H.R. 513 would require 527 groups spending money to influence Federal
elections to register as Federal political committees and comply with
Federal campaign finance laws, including limits on the contributions
they receive. Thus, 527 groups would be subject to the same
contribution limits and source restrictions that are applicable to
Federal political action committees. There would be no more $23 million
soft money contributions allowed from a lone, extremely wealthy donor.
When this bill passes, individuals will be limited to $30,000. In other
words, soft unregulated money will be replaced by hard regulated money
which will be reported to the Federal Elections Commission.
Those 527s that engage exclusively in State or local elections or in
ballot initiatives would not be restricted by this bill. However, if
they decide to engage in Federal election activity such as making
public communications that promote, support, attack, or oppose a
Federal candidate during the year prior to a Federal election, or
conduct voter drive activities in connection with an election in which
a Federal candidate appears on the ballot, they will be restricted by
this bill. In other words, State and local activities would be free to
continue as they have in the past. Those dealing with Federal
candidates or issues will be restricted by the bill, and will have to
use hard money.
H.R. 513 would also impose new allocation rules on 527 groups
regarding expenses for Federal and non-Federal activities. For
instance, 100 percent of expenses for public communications or voter
drive activities that refer only to a Federal campaign would have to be
paid for with hard money. If both Federal and non-Federal candidates
were mentioned, then at least 50 percent of such expenses would have to
be paid for with hard money. In addition, under H.R. 513, at least 50
percent of a 527 group's administrative overhead expenses would have to
be paid for with hard money.
This bill, H.R. 513 has been endorsed by the reform community and
rightfully so. Common Cause, Democracy 21, the Campaign Legal Center,
and other like-minded reform groups have sent several letters to House
Members asking them to support H.R. 513. In a letter sent just this
week, these groups argued that H.R. 513 is needed in order to ``close
the loophole that allowed both Democrat and Republican 527 groups to
spend hundreds of millions of dollars in unlimited soft money to
influence the 2004 presidential and congressional elections.''
Mr. Speaker, I will be including a copy of the letter for the Record.
Mr. Speaker, I know many of my friends on the other side of the aisle
are usually interested in what The New York Times has to say on these
issues, so I would like to include some editorials from The Times as
well; and an editorial from today's Washington Post also calls on the
House to pass this bill.
Mr. Speaker, I will include these editorials in the Record.
Mr. Speaker, I expect many of my friends on the other side of the
aisle would be arguing that BCRA should not be applied to 527s because
they are independent organizations and have no connection to
officeholders. The claim will be that we have already severed the link
between large donors and Federal officeholders. This is nonsense; this
is bunk. The 527s that have soaked up all the soft money were, in many
cases, set up and staffed by former party operatives and congressional
staffers. In some cases, Federal officeholders attend fundraising
events for these 527s in an attempt to grant an official stamp of
approval and signal to their donors where soft money donations should
be steered. I do not intend to name names, but I will include in the
Record a number of articles that describe how 527s have been set up by
people who used to work for Federal officeholders or national parties.
The soft money shell game we spawned 4 years ago is clearly
demonstrated in these articles. They demonstrate that these so-called
``independent'' 527s are, in many cases, independent in name only. In
reality, they

[[Page H1519]]

have been set up by people who used to work for our parties. They left
to organize 527s to escape the restrictions BCRA placed on the parties.
Had their candidate for the presidency won, many of them would be
working in the administration. Would not they feel indebted to the
millionaire donors who helped put them in office? Is not that what BCRA
was supposed to stop? Let us stop pretending that these 527s are
anything other than campaign organizations established to influence our
Federal elections.
This is not the first time Congress has dealt with the 527 issue. In
fact, some time ago, 6 years ago to be exact, Roll Call reported on the
debate that was going on at the time and included a quote from a
powerful congressional leader of the time. In 2000, 527s did not have
any disclosure requirements, and a bill was pending to require them to
disclose their donors. At an event held to rally support for the bill,
this leader was quoted as saying, ``Now more than ever, we need to
assure the American people that we are not willing to let our system of
government be put in jeopardy by wealthy special interests, unregulated
foreign money, and, most importantly, a system of secrecy. It is time
for disclosure.'' The leader who said these words was Minority Leader
Richard Gephardt. We passed a disclosure bill then, but the problem of
wealthy special interest money jeopardizing our system of government
has only gotten worse in the ensuing 6 years, and I suspect the
minority leader would say the same thing today.
Not extending the contributions restrictions in BCRA to all 527s was
a terrible mistake that we are today seeking to rectify. Today we can
restore some sanity to our system. The status quo allowing 527 groups
to raise unlimited amounts of soft money while our parties continue to
lose power and influence is unacceptable. It threatens the health of
our democracy.
We must subject 527s to the same regulatory restrictions that are
applicable to all other parties, candidates and committees. I urge my
colleagues to support H.R. 513.
Mr. Speaker, I reserve the balance of my time.
Ms. MILLENDER-McDONALD. Mr. Speaker, I yield myself as much time as I
may consume.
Mr. Speaker, I rise in opposition to H.R. 513, the so-called 527
Reform Act of 2005 and the restriction that they are placing on the
first amendment rights of Americans. 527s are named after a section of
the Internal Revenue Code that specifies certain political
organizations as tax exempt for tax exempt purposes under the Federal
law.
Added to the Tax Code in 1975, 527 organizations have been legally
recognized as operating entities for over 30 years. The Federal
Election Commission has recently implemented additional regulations of
these groups, which are subject to rigorous Federal reporting and
disclosure requirements. Anyone with a computer can go online and see
that millionaire Bob Perry gave $4.5 million to bankroll the Swift Boat
Veterans.
How do I know this? 527 organizations regularly submit detailed
financial information to the IRS. They have to disclose where they get
their money and how they get it. In fact, just last week, a Federal
court remanded part of a case back to the FEC to present a more
reasoned explanation for its decision that 527 organizations are more
effectively regulated through case-by-case adjudication rather than
general law.
I believe that FEC should be given a chance to review this matter
before further legislation is introduced in this House. The Senate is
providing leadership in this area. They set out to do what they wanted
to do and that was lobby reform, unlike this House, which is just
bringing up this type of legislation to circumvent their lobbying
reform bill that they do not have, and downplaying groups that had more
voters than ever before in history outside demonstrating their
democracy and getting the vote out. This is what the BCRA bill was all
about.
I voted for BCRA because it would sever the connection between
Members of Congress in raising non-Federal funds, so-called soft money,
and to ensure that there were limits on what we did in terms of money.
BCRA was necessary to cut the perceived corruption link between Members
of Congress, the formation and adoption of Federal policy and soft
money.
However, BCRA was not passed to impede legitimate voter registration
and Get Out the Vote by those 527 community groups which did just that,
but this bill impedes that democratic process. It impedes the 527
organizations.
This bill is not needed, Mr. Speaker. It is very interesting
listening to the majority speak in favor of campaign finance reform
after they did everything possible to stonewall the Bipartisan Campaign
Reform Act of 2002. Also interesting is watching the Republicans avoid
any discussion about the activities of 501(c)6s and those organizations
that have no disclosure requirements, and yet are running television
ads designed to directly reelect a Senator from Pennsylvania. Unfair
and impartial regulating 527s is a step in the wrong direction for
political speech.
Mr. Speaker, I would like to put in the Record a statement by the
National Review magazine, which is a conservative magazine, and the
National Review states, One of the biggest myths about this bill is
that it would level the playing field ending the ability of the wealthy
to fund propaganda. This is completely false. Wealthy individuals will
still be free to say whatever they want and whenever they want. This
proposal would end only the ability of individuals of lesser means to
pool their money to independently speak out on issues and speak and
criticize Members of Congress.
Mr. Speaker, I will include this statement in the Record as follows:

Advocates of this bill have yet to identify the problem
they hope to correct with this misguided proposal. 527s wield
no corruptive influence over parties or candidates, which is
the only constitutional justification for restricting free
expression.
One of the biggest myths about this bill is that it would
``level the playing field,'' ending the ability of the
wealthy to fund ``propaganda.'' This is completely false.
Wealthy individuals would still be free to say whatever they
want whenever they want. The proposal would end only the
ability of individuals of lesser means to pool their money to
independently speak out on issues.
America needs the First Amendment and the ability of
individual citizens to form groups precisely for speech that
is controversial. To suppress views of those we dislike will
inevitably risk suppression of our own.
We who oppose such a proposal want to continue to freely
debate our ideas in the public arena. We want Americans to
hear all sides--and to decide for themselves who's right.
When you were sworn into office, you took an oath to
``support this Constitution.'' We ask you to faithfully
uphold that oath by rejecting H.R. 513, S. 1053, and any
other bill that restricts political free speech.
Sincerely,
Pat Toomey, President, Club for Growth; John Berthoud,
President, National Taxpayers Union; Thomas A. Schatz,
President, Council for Citizens Against Government
Waste; David Keene, Chairman, American Conservative
Union; Grover Norquist, President, Americans for Tax
Reform; Paul M. Weyrich, National Chairman, Coalitions
for America; Matt Kibbe, CEO and President, Freedom
Works; James Bopp, Jr., General Counsel, James Madison
Center for Free Speech; Bradley A. Smith, Professor of
Law, Capital University Law School, and former
Chairman, Federal Election Commission; Fred Smith,
President, Competitive Enterprise Institute.

Mr. Speaker, unfairly regulating 527s is a step in the wrong
direction for political speech. I believe this legislation will have a
negative impact on the voter participation bill silencing segments of
the population that we need to hear from. Of particular concern is that
the fundamental rights and the needs of all Americans including the
voices of women, the elderly, and the poor not be left out of the
political dialogue just because of the perceived notion that a few
millionaires are funding all 527s.
In fact, thousands of Americans gave to 527s through small donations
of $25, $50 and the like because they believe, Mr. Speaker, in the
message of 527 organizations.

{time} 1715

Through the first amendment, Americans are playing an ever increasing
role in holding public officials accountable for their actions, through
the debate of public policy, and the shaping of this American
democracy. Their voices should not be silenced.
In fact, I would like to put in the Record again the statement by
Assistant U.S. Attorney General Alice S. Fisher when she stated upon
the plea

[[Page H1520]]

agreement of Mr. Rudy of his crimes involving illegal favors and
lobbying activities which lasted from 1997 to 2004, and she says, ``The
American public loses when officials and lobbyists conspire to buy and
sell influence in such a corrupt and brazen manner. By his admission in
open court today, Mr. Rudy paints a picture of Washington which the
American public and law enforcement will simply not tolerate.''
The American public, Mr. Speaker, will not tolerate what is about to
happen here with this elimination of 527 organizations, transferring
them into 501(c)s, not allowing them to work independently of Members
of Congress and having to deal with any congressional campaign
committees.
In fact, this bill sharply curtails the ability of individuals and
groups to associate in the pursuit of political and policy goals, and I
will say to you, Mr. Speaker, that the unjust shade of Federal policy
holders, which are us, the Members of Congress, this bill will allow
the public to not criticize or even ask for accountability because they
want to outlaw those groups who engage in the type of public speech,
the public speech that might criticize us or ask for accountability.
This is what they are trying to muffle. They are trying to muffle the
voices of the American people who spoke through 527s. They are
independent groups. The majority should not be in the business of
legislating for partisan gain at the expense of the American people.
I will vote in opposition of this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. EHLERS. Mr. Speaker, it is my pleasure to yield 4\1/2\ minutes to
the gentleman from California (Mr. Doolittle).
Mr. DOOLITTLE. Mr. Speaker, legislating for partisan gain is all that
campaign finance regulation has ever been about. Who are we kidding?
Let us go back to 1974. Watergate, Republicans are under heavy fire.
Democrats took advantage of that, demanded reform, and one of their
reforms was the Federal Election Commission Act amendments. Those
amendments were quite far-reaching, and many of them became the law,
and when it went to the Supreme Court, the Court finally struck out
many of them. What was left was the campaign finance law until we
passed BCRA in 2002.
It is interesting, though, to talk about that because eventually the
Republicans made up for their disadvantage, and actually the
Republicans were the leaders with soft money in 2002. This is very
upsetting to the Democrats, who developed votes off soft money. It was
a wonderful tool they could take advantage of, and they were a little
behind. So they came up with BCRA in 2002. BCRA, of course, was going
to take the money out of politics.
Now, going back to 1974 for a minute, let us remember that President
Nixon was much criticized by the Democrats when he took a campaign
contribution from one wealthy individual of $2 million. Fast forward to
2004, after BCRA is passed, and at that point, having taken the big
money out of politics, you will note with interest that one man, George
Soros, gave $27 million to efforts to elect John Kerry President of the
United States. So we went from 1974 with $2 million to Richard Nixon to
2004 to $27 million to John Kerry. I do not think we got the money out
of politics. We just sort of reshuffled the deck chairs to the partisan
advantage of the Democrats.
We are charged with partisan advantage today in trying at least to
give full effect to the Democrats' several years ago stated intent,
which was to take the big money out of politics and put 527s within the
rule that applies to donations to political parties. I do not think
that is unreasonable.
I have got to tell you, as someone who is obviously a participant but
also as an observer of the political process, what advantage does it
serve to move political speech farther and farther away from the
candidate? Third party groups, whether they are 527, 501(c)(4)s,
whatever, do not have the same vested interest in currying favor with
the public. There is no sense of self-restraint whatsoever. Therefore,
the more we move speech away from the candidate into somebody else
doing the speaking, the less accountable your campaigns become and the
more negative they become.
I am constantly fascinated how the left uses the negativity of
campaigns as justification for yet further campaign regulation when, in
fact, their regulations are creating the very negativity they claim to
oppose.
This bill is a reasoned bill, it is a balanced bill, and it is one
that we should adopt. Will it eliminate the problems? Of course it will
not because we have the monstrosity of Federal regulation of political
speech, something the first amendment to the United States Constitution
expressly would seem to prohibit. It certainly seems clear to me when
it says in the first amendment Congress shall make no law abridging the
freedom of speech, and yet marvelously the Supreme Court or at least a
majority of it managed to find that these provisions did not violate
the first amendment.
So my point is we have got to deregulate political speech and quit
tinkering and turning about here and a dial here and trying to get
partisan advantage won over the other. Wipe this whole monstrous system
out, give full effect to the first amendment, repeal all the limits and
have full and timely disclosure. That is the solution long term. In the
meantime, short term today, please support this legislation, recognize
there is great language about coordination that promotes
responsibility, accountability and allows parties to help their
candidates rather than running an independent expenditure.
I urge support for this bill.
Ms. MILLENDER-McDONALD. Mr. Speaker, contrary to the last speaker, he
has a bill that wants to repeal all hard money limits, and this is what
this bill is all about, the flow of unregulated amounts of money. This
is what the American people do not want, Mr. Speaker.
Mr. Speaker, I yield 5 minutes to the gentlewoman from California
(Ms. Zoe Lofgren).
Ms. ZOE LOFGREN of California. Mr. Speaker, yesterday former majority
leader Tom DeLay announced that he is resigning from the House. His
former aides, Michael Scanlon and Tony Rudy, have pled guilty to crimes
for their involvement in the Jack Abramoff corruption affair, and other
aides to Mr. DeLay and even other current Members of this body remain
under investigation.
Last November, Republican Congressman Duke Cunningham resigned from
Congress for taking over $2 million in bribes from a defense
contractor. He is now serving an 8-year prison sentence for his crimes.
The House Ethics Committee is broken and has done no work in the past
15 months. The committee managed to have its first meeting of the 109th
Congress last week. On Sunday, The Washington Post said, ``The panel's
inactivity in the face of scandal is itself scandalous.''
Today's bill is characterized as important campaign finance reform by
the House Republicans. The question is, what effect would this bill
have on the countless scandals that are currently engulfing Washington?
The answer is nothing.
This bill does nothing to address those very serious charges of
corruption. It would do nothing to prevent another Jack Abramoff or
Duke Cunningham scandal.
Further, in addition to doing nothing, the bill actually makes it
easier for scandals to occur by opening up the flood gates and removing
all limits on State and national party committee spending in the
Federal races.
Since this bill does nothing to reverse the Republican culture of
corruption, let us look at this bill on the merits to see what it
actually does.
What this proposal would do is curtail the free speech rights of
millions of Americans. The bill would limit the ability of average
citizens to band together and speak out about issues, both during and
beyond election. It limits participation in the electoral process.
In 2004, 527 organizations helped to educate and register voters
across the country. Now in 2002, the Shays-Meehan-McCain-Feingold bill
actually was real reform with a clear purpose. It took Members of
Congress out of the business of asking lobbyists and special interests
for large, unregulated donations.
527 organizations, however, are not made up of elected officials. In
fact, 527s are barred from coordinating with

[[Page H1521]]

office holders, candidates or public officials. By law, these groups
are independent, and I am not aware of any allegations that there was
any illegal coordination between 527s and political parties in 2004. If
there is, I would urge people with that knowledge to go to the Attorney
General or to the FEC and report on this conduct. If there is some,
there are mechanisms for enforcement, but the remedy to a nonproblem in
that area is not to shut down free speech.
In fact, in Buckley v. Valeo, the Supreme Court upheld limitations on
contributions as appropriate legislative tools to guard against the
reality or appearance of improper influence stemming from candidates'
dependence on large campaign contributions. Buckley also invalidated
limitations on independent expenditures, on candidate expenditures from
personal funds, and on overall campaign expenditures. The Court ruled
that these provisions placed direct and substantial restrictions on the
free speech rights guaranteed in the first amendment.
This bill directly contradicts the Buckley ruling. It violates the
first amendment and will not withstand scrutiny by the Court.
Why are we considering this bill today? I suspect this is a last
ditch effort for Republicans to keep their hold on power. They have
read the polls. They know that most Americans are going to support
Democrats this November, and the Republicans are losing on issue after
issue. So they are going to try and change the rules which will keep
them in power against the wishes of a majority of Americans.
Let me finish by reviewing the ethics rules that this Congress has
passed this year. At the beginning of the year, shortly after Jack
Abramoff pled guilty, House Republicans boldly pushed through their
reform plan for Congress. What did their plan to crack down on ethics
do? It banned former Members from lobbying in the House gym and on the
House floor. So America, you can rest easy knowing that at least the
cesspool of corruption at the Stairmaster is no more.
Today's bill is really a travesty. It is a joke. The country really
should be embarrassed by the efforts this Congress is making, by the
corruption that has been shown and I fear the corruption that is yet to
be exposed in this body.
Mr. EHLERS. Mr. Speaker, I am pleased to yield 2 minutes to the
gentlewoman from Florida (Ms. Ginny Brown-Waite).
Ms. GINNY BROWN-WAITE of Florida. Mr. Speaker, I thank the gentleman
very much.
If this bill becomes law, let us speculate about exactly what will
happen. What would elections and politics be like if the Federal
Election Commission regulated 527s? Let us see. There might be some
honesty. For example, candidates and elected officials would not be
able to rely on partisan political groups like moveon.org to do their
dirty work.
Let us see, they might be a lot cleaner because billions of dollars
in soft money contributions would stop, and so would the false and
misleading message campaigns that take place in various districts
almost daily.
One of my colleagues said if they are aware of any misuse of the 527s
in the political area, let me just state but one. The ACORN Group,
which is a political front for a liberal 527 group called America
Votes, has also been implicated in political escapades. A former ACORN
worker admitted to deliberately throwing out Republican registration
forms and paying gatherers only to collect Democrat registration forms
in 2004. Actually, in at least one State this is being investigated.

{time} 1730

Is this fairness? What about those who chose not to register in the
Democrat Party? They may have been Republican; they may have decided to
be an independent. Do they not have a right to have their registrations
turned into the local election commissioner?
You know, allowing groups to hide behind faulty, arcane and outdated
FEC and IRS rules is not an option. Congress must move forward and
reform the laws that allow these 527s to spew their lies and fraudulent
tactics on the American people. Regularly in my district, I get the 527
calls. My constituents are wise to the fact that this is an unregulated
entity.
Ms. MILLENDER-McDONALD. Mr. Speaker, I yield 3\1/2\ minutes to the
gentleman from Illinois (Mr. Emanuel).
Mr. EMANUEL. Mr. Speaker, in the wake of the Jack Abramoff scandal,
we have seen multiple indictments, Members of Congress resigning under
a cloud of scandal, congressional approval at an historic low, and a
public demand for reform. You would think that the Republican
leadership would want to get these scandals behind them, but it is
clear they do not.
What is the first stage of grief? Denial and isolation. So here we
are today discussing a bill that doesn't do anything to address the
problems of the scandals facing this Congress, this institution, which
require an institutional solution to an institutional problem.
Nope, this bill doesn't do anything to stop the pay-to-play policies
of the party in power. Nope, it doesn't. Doesn't do anything to shut
down the K Street Project, rewarding lobbyists who show party loyalty,
or to slow the revolving door. Nope, it doesn't do that.
Many of you will recall our former colleague, Mr. Tauzin, who
negotiated a million dollar lobbying job with the pharmaceutical
industry at the same time that he was rewriting the Medicare
prescription drug bill. This legislation doesn't affect that.
Now, take a hypothetical for a moment. What if a Member just
resigned, middle of a term, and was thinking of working for companies
and sitting on boards. This legislation doesn't change what would
happen. It happened when Mr. Tauzin was out here on the floor. And if
you had a hypothetical, the Member resigned, maybe just a hypothetical,
2 months left on his tenure here, this legislation doesn't affect who
he meets with, who he talks with, how he negotiates and how he votes
while he is negotiating.
Why, to do that, you would have to have a desire for reform, and I
wouldn't want to impose on the majority party in any way. All the
while, while they are voting on this legislation, they are negotiating
jobs and they have no responsibility to report to the public of their
conduct. It is just business as usual here in Washington.
And then what are they trying to do; take the legislation regarding
the 527s, and my colleagues on the other side voted the McCain-Feingold
campaign finance reform of past years. Well, that reform leveled the
playing field for both parties. This legislation does not intend to do
that. This legislation intends to do a very partisan thing to the
campaign finance laws affecting 527s.
Now, I introduced legislation to affect 501(c)6s. Right now, in the
State of Pennsylvania, one of those organizations is actually running
ads. I say, you want the same rhetoric, you want 527s to report, well,
I suggest 501(c)6s report. That amendment was not allowed. Why? Because
it would actually have leveled the playing field. It would have applied
to both parties, not one party. So in the name of reform, once again,
we have partisan tactics.
Now, all the while, you are going to go home and wonder why the
American people have such low esteem for the Congress. It is quite
obvious why they have such low esteem: College costs at a record high,
38 percent and going up; health care costs are up 58 percent, $3,600 in
4 years; energy costs are up 70 percent; medium incomes are down. All
that Congress hasn't paid attention to.
So as we have scandals swirling around this institution, Members
resigning, Members pleading guilty, you once again go whistling past
the graveyard on the chance to do real reform and play partisan
politics. I do not know what tune you are singing right now, but you
will come to know that tune this November.
Mr. EHLERS. Mr. Speaker, I am pleased to yield 3\3/4\ minutes to my
colleague from New York (Mr. Reynolds).
(Mr. REYNOLDS asked and was given permission to revise and extend his
remarks.)
Mr. REYNOLDS. Mr. Speaker, I find it such an ironic message that my
colleague from Illinois chose about his remarks. As he talks about so
many problems in Washington, he failed to mention any on his side of
the aisle. We kind of nicknamed that the culture of hypocrisy. It is a
hypocrisy of attack the Republicans, slash and burn, no debate, no real
issues, just the party

[[Page H1522]]

of ``no'' from the Democrats on the other side of the aisle.
When you look at some of the discussions he talked about, with
lobbying reform and others, he must remember that the colloquy between
the majority leader and the minority would also show clearly that the
majority leader fully intends to bring reform legislation to this body
for debate and for final solution.
I also think about hypocrisy when I think about some of my colleagues
on the other side of the aisle addressing so many things about the
majority, except they forgot that our leaders step down when they are
indicted, because that is what our party rules say. Our chairman
stepped down because that is what our party rules say. And in the 10
years while you have been reflecting, your rules don't say the same.
Your leaders can get indicted, or the ranking members can get indicted
and you don't have to step down because you haven't even recognized
that as a basic element of your own party, let alone your quick
criticisms of this institution.
I also want to say that while I confess I did not think that BCRA was
the solution for campaign finance reform, and voted that way on both
the House Administration Committee and on this floor, I accepted it as
the law of the land. It was legislation passed by both bodies, signed
by the President, affirmed by the Supreme Court. But as I was listening
to those who are pro-BCRA, that wanted this law as it sits today, they
found a loophole, called 527s.
And all the debate on leveling the playing field was get the big
money out of politics. Well, four individuals on the Democratic side
had over $80 million; four Republicans had over $23 million as they
were engaged in obscene, big money, unregulated in campaigns
influencing Presidential, congressional, and referendum votes.
So when we look at some common sense, I think the American people are
going to, quite frankly, think this makes sense. Let us get unregulated
big money out of the campaigns by having a level playing field across
the system, universal, in the money you give to your political party.
As we level the playing field, all we are asking is that rich
individuals who want to be in the process have the same rights extended
to them that individuals who want to give to the political party,
whether it is the Democratic National Committee or its subordinate
parties or the Republican National Committee and its subordinate
parties, the same amount of money to 527s as they invest in the
opportunity to express themselves however they want, with the same
reviewed Supreme Court aspect of having a level playing field across
the entire system.
Anyone who doesn't vote for this that supported BCRA is a hypocrite.
Anyone on the other side that doesn't recognize that this is a loophole
in the law, and they have a chance to at least level the field under
the law we are going to live under, misses the point. I urge that you
support this legislation that is before us today.
Ms. MILLENDER-McDONALD. Mr. Speaker, I yield 1\1/2\ minutes to the
gentleman from Illinois for a response.
Mr. EMANUEL. There must be something in the water here in Washington.
To remind my colleague and my friend from Buffalo, the first vote of
this Congress by the majority party was to strip the Ethics Committee
that investigates Members of its authority to do that, which is why
after 15 months in this Congress, the Ethics Committee has not met
until last week.
Since that time, one Member stepped down with a guilty plea, another
Member stepped down with a cloud of ethics, and others are under
Federal investigation at this point. And why? Because the first vote by
the Republican majority was to strip the Ethics Committee of its
authority.
The second thing. In fact, the majority party did vote this Congress
that when a Member of their party was indicted, they were allowed to
hold their party position. You have that vote. You stripped your party
of that authority and that moral voice when you cast your vote to allow
the majority leader to retain his position when indicted.
Now, maybe there is a rampant disease called short-term memory over
there, but two votes in this Congress: one, if you got indicted, in
fact, you are allowed to keep your position. You cast those votes on
your side. And this Congress, when it opened up, rather than address
the scandals, this Congress, under the majority, not with any
Democratic support, stripped the bipartisan Ethics Committee from its
ability to hold investigations, which is why not a single Member to
date, with all these scandals, some reported by others, congressional
historians, as the worst scandals in the history of the Congress, still
the Ethics Committee has failed to do its job because you have stripped
it of its abilities to do its job.
That will be the moral stain on this Congress. Your votes.
Mr. EHLERS. Mr. Speaker, I am pleased to yield 30 seconds to the
gentleman from New York to respond.
Mr. REYNOLDS. Mr. Speaker, I look forward to the day when, in our
Ethics Committee, the Democrats will give the tools to a bipartisan
five-five Ethics Committee to begin reviewing both Democrats and
Republicans who need to go before that committee to have resolution of
stuff that has been stalled for the entire 2005 year by the Democratic
leadership.
Ms. MILLENDER-McDONALD. Mr. Speaker, I yield 20 seconds to respond to
the gentleman.
Mr. EMANUEL. My good friend from Buffalo, you may not get health care
legislation done this year, you may not get educational reform this
year, and for sure, you won't balance the budget. But this Congress
will be remembered as the Congress that Jack and Tom built. Because the
scandals continue to swirl around this institution.
Until you do serious lobbying reform and close the loopholes, close
the revolving door, have real transparency, real enforcement, this
Congress, when that gavel comes down, which is intended to open the
people's House, not the auction House, and you have allowed it to
become an auction house, then this is the House that Jack built.
Ms. MILLENDER-McDONALD. Mr. Speaker, how much time do we have
remaining?
The SPEAKER pro tempore (Mr. LaHood). The gentlewoman from California
has 11\1/2\ minutes remaining; the gentleman from Michigan has 8
minutes remaining.
Mr. EHLERS. Mr. Speaker, I reserve the balance of my time.
Ms. MILLENDER-McDONALD. Mr. Speaker, I yield 3 minutes to the
gentleman from Arizona (Mr. Flake).
Mr. FLAKE. Mr. Speaker, I thank the gentlewoman for yielding.
Mr. Speaker, this isn't the first time the Congress has debated the
effects of public campaign discourse. Let me take you back to 1798,
when about 20 or so independent newspapers aligned with Thomas
Jefferson started openly criticizing the policies of John Adams, the
President. Adams used his power and influence to have Congress pass the
Alien and Sedition Acts, which declared that the publication of false,
scandalous, and malicious writing was punishable by fine and
imprisonment. By virtue of this legislation, 25 editors were arrested
and their newspapers were forced to shut down.
The first amendment was established to ensure that citizens are able
to protect themselves from government, not so that government can
protect itself from the people. If this bill passes, we will be
standing here having the same debate in a couple of years on how to
regulate 501(c)4 organizations. 501(c)4s require no disclosure and have
no contribution limits. They will surely become the 527s of 2008 if
this legislation passes.
This legislation, H.R. 513, simply compounds an existing problem.
Loopholes will always exist, because there will always be money in
politics. Instead of stifling speech and forcing it to go underground,
we ought to be lifting up other players in the political system and
provide more freedoms with greater transparency and more
accountability.
Where will this lead? That is the question. If Republicans happen to
lose in November, lose the majority, what happens when Democrats try to
level the playing field by applying the so-called fairness doctrine to
radio talk shows? Surely the Democrats will make the same arguments
about Rush Limbaugh that Republicans are making about George Soros.

[[Page H1523]]

{time} 1745

Back to the implications of the Alien and Sedition Acts. Americans
were smart enough to realize what President Adams was using. He was
using the powers of government to stifle free speech and they reacted
accordingly. Public opposition to the Alien and Sedition Acts was so
great that was a large reason Adams was defeated by Thomas Jefferson a
few years later. This is history worth remembering, Mr. Speaker.
Mr. EHLERS. Mr. Speaker, I yield 5\1/2\ minutes to the gentleman from
Connecticut (Mr. Shays), the author of this legislation.
Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding me this
time.
This is a surreal debate because it is a debate that has consequences
and yet it seems to almost be like a game. When we passed campaign
finance reform, it passed primarily with Democratic support and there
wasn't any talk about free speech because Democrats made the proper
argument. They made the argument that this was about letting people
have their speech and not being drowned out by the wealthy.
That is what the Democrats said: Don't let the wealthy drown out
people who don't have a lot of resources.
So what the Democrats are now arguing is that for instance 25
individual donors should be able to contribute $142 million, or 56
percent of all of the individual contributions to 527 groups in the
2004 election. That is what Democrats are saying. They are saying we
want the wealthy to be able to dominate. But that was not their
argument when they voted for campaign finance reform, and it was not my
argument.
Our argument was that we wanted to have a level playing field. Our
argument was we wanted to enforce the 1907 law that banned corporate
treasury money, we wanted to enforce the 1947 Taft-Hartley Act that
banned forced union dues money, and we wanted to support the 1974
campaign finance law that said you could not make unlimited
contributions to federal campaigns. That is what Democrats argued for
and supported. And they blamed Republicans for being against campaign
finance reform.
The amazing thing is once the campaign finance reform bill passed
Democrats immediately started to break the law. They were looking to
get around the very law they voted for. And when Mr. Soros, who helped
fund the campaign finance movement, argued that he should be able to
contribute unlimited funds to 527s and that he should be able to bring
his $20-plus million to the table, just this one individual, Democrats
wanted to protect him and allow him to do that. And Republicans who
were against the law said this is the law, we are going to abide by it.
The amazing thing is the very people who did not vote for the law
were willing to abide by it, and the very people who voted for the law
are trying to get around the law. That is what I find so amazing about
this debate.
So what this amendment does is it just enforces the law that you, my
fellow colleagues on the other side of the aisle, voted for. It
enforces the Campaign Finance Act, the McCain-Feingold bill, the bill
you all supported.
Now why do we have to pass this bill before us? Because unfortunately
when we gave it to the Federal Elections Commission, the FEC, who does
not believe in the law, decided not to enforce the law. They are happy
to have loopholes. They are the ones who introduced the whole soft
money issue in the first place.
So what do we have? We have a loophole that needs to be closed, and
the way you close it, is to pass this bill that requires 527s to come
under the campaign finance law. This is because their primary activity,
in fact their only activity, is campaigns.
And the law is clear. Mr. Meehan and I brought forward a case against
the FEC. We threw out 14 of their regulations because they did not
abide by the law, and then we proceeded to take a court action against
them on enforcing the law and put 527s under their jurisdiction.
The court made a decision that Mr. Meehan and I were right, that 527s
should be under the law. In fact, the judge said not putting them under
the law circumvented the law. So what we are doing is simply making the
law consistent. And frankly, this talk of (c)(3)s, (c)(4)s and (c)(5)s,
is not on point. Their primary responsibility and activity is not
campaigns. And because of that, you are not going to have the same
problem that you have with 527s. If in fact their primary activity
becomes campaigns, then they will come under it.
This bill is consistent to the law. It is imperative it passes. It is
consistent with what my colleagues voted for, and I applaud my side of
the aisle for, in spite of the fact of not voting for the law, be
willing to live by the law.
Ms. MILLENDER-McDONALD. Mr. Speaker, I yield myself such time as I
may consume.
I would say to the gentleman who just spoke, this is not what we
voted for. We did not vote to transfer 527s to 501(c)s. That is
dishonesty. I oppose those who say this is an obscene bill, 527s are
not obscene.
What they are trying to do now here with this bill would provide each
national and State party committee to be free from any limits in
spending on behalf of its candidates and the spending would take place
at any time for the primary or general elections.
This is the flow of money that the American people are saying take
out of campaigns.
Mr. EHLERS. Mr. Speaker, I reserve the balance of my time to close.
Ms. MILLENDER-McDONALD. Mr. Speaker, I yield myself the balance of my
time to close.
Mr. Speaker, I want to clarify that the 527s have been and must
always file with the Internal Revenue Service. They have to do
quarterly reports. Unlike what has been said, that they do not have
disclosure and they do not have reporting, that is not true, and I
include for the Record the IRS filing dates so that can be placed in
the Record.

Internal Revenue Service--United States Department of the Treasury

Form 8872 Filing Dates (for 2006)

During an election year, a political organization has the
option of filing on either a quarterly or a monthly schedule.
The organization must continue on the same filing schedule
for the entire calendar year.

OPTION 1.--QUARTERLY FILING SCHEDULE
------------------------------------------------------------------------
Report Filing Date
------------------------------------------------------------------------
1st Quarter (January 1-March 31).......... April 17, 2006
2nd Quarter (April 1-June 30)............. July 17, 2007
3rd Quarter (July 1-September 30)......... October 16, 2006
12-Day Pre-General Election*.............. October 26, 2006 (October
23, is posting report by
certified or registered
mail)
30-Day Post-General Election.............. December 7, 2006
Year-End.................................. January 31, 2007
12-Day Pre-Election*...................... 12 days before the election
(Varies according to date
of election. See pre-
election reporting dates
chart)
------------------------------------------------------------------------
*A political organization files a 12-day pre-election report(s) prior to
a federal election (primary, convention, and/or general election) if
the political organization makes or has made contributions or
expenditures with respect to a federal candidate(s) participating in
that election. Therefore, if the organization supported a federal
candidate in a primary election, it files a 12-day pre-election report
prior to that candidate's primary election. If the organization made
contributions or expenditures in connection with a federal
candidate(s) in the general election, the organization also files the
12-day pre-general election report.

OPTION 2.--MONTHLY FILING SCHEDULE
------------------------------------------------------------------------
Report Filing Date
------------------------------------------------------------------------
January................................... February 21
February.................................. March 20
March..................................... April 20
April..................................... May 22
May....................................... June 21
June...................................... July 20
July...................................... August 21
August.................................... September 20
September................................. October 20
12-Day Pre-General Election*.............. October 26 (October 23, if
posting report by certified
or registered mail)
30-Day Post-General Election*............. December 7
Year-End.................................. January 31, 2007
------------------------------------------------------------------------
*A political organization files a 12-day pre-election report(s) prior to
a federal election (primary, convention, and/or general election) if
the political organization makes or has made contributions or
expenditures with respect to a federal candidate(s) participating in
that election. Therefore, if the organization supported a federal
candidate in a primary election, it files a 12-day pre-election report
prior to that candidate's primary election. If the organization made
contributions or expenditures in connection with a federal
candidate(s) in the general election, the organization also files the
12-day pre-general election report.

Mr. Speaker, this bill, H.R. 513, will have a chilling effect on tax
exempt 501(c) organizations. Despite a provision exempting nonprofit
charities and social service organizations, this bill, H.R. 513,
regulates the same activities that such entities are permitted to
engage in.
Should this bill become law, a precedent may be set that all
nonprofit activities should be heavily regulated leading to significant
new restrictions on 501(c)3s. H.R. 513 thus may represent a trend with
chilling implications for the nonprofit sector.
Mr. Speaker, I include for the Record a statement from the CATO
Institute, a conservative think tank.

[[Page H1524]]

Cato Institute--Free Speech and the 527 Prohibition

(By Stephen M. Hoersting--April 3, 2006)

Limiting the Speech of Independent Speakers Is Unwise and
Unconstitutional

Forcing PACs on citizens is a matter for courts, not just
Congress
To constitutionally regulate campaign finance, the
government must demonstrate that the ``harms it recites are
real,'' not ``mere speculation or conjecture.'' Proposals to
subject section 527 organizations to political committee
status, with scant regard to their activities, effectively
impose an ``any purpose'' test in brazen disregard of the
``major purpose'' test the Supreme Court established in
Buckley v. Valeo. Such proposals presume that any
communication mentioning a candidate that promotes, supports,
attacks, or opposes that candidate at any time of the year--
or any ``voter drive activity,'' even if totally non-
partisan--is sufficient to trigger political committee
status. If such proposals were in effect during the last
cycle, any mention of President Bush's or Senator Kerry's
policies from November 2, 2003 to November 2, 2004, or any
attempt to identify voters, would have turned the 527
organization into a federal political committee. In FEC v.
Beaumont, the Court noted that a non-profit corporation
entitled to the MCFL exemption of federal campaign law--which
exempts certain non-profit corporations from FECA's
registration requirement--would have to register as a
political committee to make contributions to federal
candidates, though it would not have to register to make
independent expenditures. The direct nexus to a federal
candidate and the entity's enjoyment of the corporate form
were ample reason to require it to register. There is no such
connection here, however, or existing 527 organizations would
already be covered.
Establishing and maintaining a PAC, however, is not a minor
administrative task, and it has become more onerous with each
new round of restrictions on PACs and those who run them.
Gone will be the ability of citizens to adapt quickly and
associate freely in support of a position when issues arise.
The various funding source, amount, and disclosure
requirements of PAC compliance make it difficult to raise the
quantities of money for broadcast communications. New or
small organizations may have a hard time, given the limited
number of employees or members from whom they can solicit at
all: not just anyone may contribute to a PAC; you have to
belong to the organization, or work for the company or union
that sponsors it. That has practical consequences of which
courts are aware. The Swift Vets' communications would have
been impossible, for example, without the modest seed money
that would become illegal under current 527 proposals. Or if
the PAC were wildly successful, however unlikely, it would
come at the expense of other right-leaning PACs or party
committees, all of which rely on individual contributors
bound by biennial aggregate limits on their contributions to
all political committees during an election cycle. In other
words, the question of who will join your PAC in time to
raise enough funds at a maximum of $5000 per person for
advertising is a very real constraint on an organization's
ability to run advertising--independent advertising, no less.
Independent voices can't be limited
Forcing political committee status on the organizations is
only one question in assessing constitutionality. The ``key
question is whether individual contributions to any political
committee--527 or not--that does not make contributions to a
candidate but instead makes only expenditures can be subject
to limitation.'' In Buckley v. Valeo, the Supreme Court
stated that the First Amendment permits the government to
regulate campaign spending to prevent the corruption of
officeholders or its appearance. The Court has not recognized
any interest in ``equalizing'' speech. Contributions and
funds spent in coordination with a candidate can be limited
to protect against legislative quid pro quos. The Court has
also said that contributions to an organization that in turn
makes both contributions and independent expenditures
(defined constitutionally as ``express advocacy'') can also
be limited to make regulatory oversight feasible; to prevent
the possibility that unlimited funds would flow to
candidates. But independent spending lacks the necessary
connection to officeholders, is not corrupting, and cannot be
limited. The ``absence of prearrangement and coordination of
an expenditure with the candidate or his agent not only
undermines the value of the expenditure to the candidate, but
also alleviates the danger that expenditures will be given as
a quid pro quo for improper commitments from the candidate.''
Independent spending is not corrupting. Likewise,
contributions to organizations that engage in independent
spending are also not corrupting. The Court has already
granted constitutional protection to an individual's
independent spending. George Soros may buy all the
advertising he wants. That right extends also to an
individual's donation to an organization that engages in
independent spending. ``The independent expenditure ceiling
fails to serve any substantial governmental interest in
stemming the reality or appearance of corruption in the
electoral process . . . and `` `heavily burdens core First
Amendment protection.' ''
As stated by Professor Richard Briffault, ``[t]wo Supreme
Court decisions provide support for the argument that if an
independent expenditure does not present a danger of
corrupting or appearing to corrupt officeholders, then
contributions to a political committee that makes only
independent expenditures cannot be limited.'' The first case
is California Medical Ass'n v. FEC, a case involving limits
on contributions by a trade association to its own PAC. In
the plurality was Justice Blackmun, who wrote in concurrence
that although the limit on contributions to a political
committee is valid ``as a means of preventing evasion of the
limitations on contributions to a candidate[,] . . . a
different result would follow [if the limit] were applied to
donations to a political [organization] established for the
purpose of making independent expenditures, rather than
contributions,'' because ``a committee that makes only
independent expenditures . . . poses no threat'' of
corruption. Professor John Eastman has noted that
contributions to a committee that does not give to
candidates, such as most section 527 organizations
contemplated by current proposals, are deserving of even more
constitutional protection because ``the principal message
expressed by a contribution to a noncandidate committee is
agreement with and furtherance of that committee's views,''
unlike the message expressed by contributions to a candidate
committee or a committee that in turn gives to candidates.
This approach is bolstered by the second case, Citizens
Against Rent Control, which invalidated a contribution limit
to a ballot proposition committee because the lack of a nexus
to a candidate made corruption inapplicable. Similarly, where
the nexus to an officeholder is not present, the anti-
circumvention rationale of McConnell is also not furthered by
a limit on contributions to organizations that engage in
wholly independent activity.
Even though the contribution limit applies to the
independent spending of political committees that also
contribute to candidates or make coordinated expenditures, it
is not clear that the Court would approve limits on
organizations that engage in wholly independent activity. As
noted by Professor Briffault, the McConnell Court's treatment
of this issue related to BCRA's application of contribution
limits to the activities of political parties.'' \47\ But the
section 527 organizations Congress appears interested in and
political party committees are not alike. ``[F]ederal
candidates and officeholders enjoy a special relationship and
unity of interest'' with their political party, said the
McConnell Court. \48\ ``The national committees of the two
major parties are both run by, and largely composed of,
federal officeholders and candidates.'' \49\ The ``close
connection and alignment of interests'' between candidates
and their political parties means that ``large soft-money
contributions to national parties are likely to create the
actual or apparent indebtedness on the part of federal
officeholders, regardless of how those funds are ultimately
spent,'' \50\ and the same is true of ``the close ties
between federal candidates and state party committees.'' \51\
The same cannot be said of 527 organizations. There is no
record that candidates or party committees coordinated their
spending with the 527s. Section 527 organizations simply have
no comparable ties to candidates, thus making the anti-
circumvention rationale of McConnell far too tenuous and
unsuitable. Spending by section 527 organizations does not
corrupt the legislative process because there is no nexus to
lawmakers. It does not corrupt the balloting process. And
spending by section 527 organizations does not corrupt the
process of information exchange in the run up to the
election. Indeed, spending by section 527 organizations is an
integral part of the process of information exchange. And the
information exchange needs to be open, robust and
uninhibited.
More speech is what is needed, not less
Studies indicate that campaign spending diminishes neither
trust nor involvement by citizens in elections. Indeed,
spending increases public knowledge of candidates among all
groups in the population. ``Higher campaign spending produces
more knowledge about candidates,'' whether measured by name
identification, association of candidates with issues, or
ideology; and setting a cap on spending would likely produce
a less informed electorate. \52\ Unlimited spending does not
confuse the public, \53\ and the benefits of campaign
spending are broadly dispersed across advantaged and
disadvantaged groups alike. That is, as incumbents are
challenged by spending, both advantaged and disadvantaged
groups gain in knowledge. \54\ And so-called negative
advertising campaigns do not demobilize the public, as many
have alleged. \55\
Razing speech to the same level
Yet many persons inside the beltway believe that 527s
should be regulated on egalitarian grounds. Republican Party
chairman Ken Mehlman is outspoken in support of 527
regulation, declaring that Congress ``must reform 527s, so
that everyone plays at the same level, and billionaires can't
once again use loopholes to try to buy elections.'' \56\
Democratic Party chairman Howard Dean signed expenditure
limit legislation as Governor of Vermont and had the DNC file
an amicus brief to the Supreme Court in support of the
legislation. \57\ Senator John McCain ``said that lawmakers
should support the bill out of self-interest, because it
would prevent a rich activist from trying to defeat an
incumbent by diverting money into a political race through a
527 organization. `That should alarm every federally elected
Member of Congress,' he said.'' \58\ Senator Trent Lott

[[Page H1525]]

has called for limits on 527s to ``level the playing field.''
\59\ That these candidates and party chairs notice the
spending and how it may benefit or hurt them is also a
tenuous justification for regulation. Dissenting in
McConnell, Chief Justice William Rehnquist wrote that
benefit--even benefit expressed in gratitude--is not enough
to justify restrictions, otherwise this rationale could serve
as a basis to regulate ``editorials and political talk shows
[that] benefit federal candidates and officeholders every bit
as much as a generic voter registration drive conducted by a
state party,'' \60\ a position adopted by the McConnell
majority. \61\ Preventing circumvention of applicable
contribution limits and source prohibitions was the rationale
employed by the Court in McConnell. The rationale was not to
foster egalitarianism. \62\
Buckley long ago rejected the argument that ``equalizing
the relative ability of individuals and groups to influence
the outcome of elections'' \63\ is a compelling interest,
adding that ``the concept that government may restrict the
speech of some elements of our society in order to enhance
the relative voice of others is wholly foreign to the First
Amendment.'' \64\ The Court has said elsewhere that trying to
manipulate groups' relative ability to speak ``is a decidedly
fatal objective.'' \65\ And there is good reason to be
suspicious of the motives of incumbent legislators and party
chairmen seeking egalitarianism in campaign spending. After a
certain level of spending, the utility of further spending
declines, and incumbents hit the point of marginal utility
earlier than opponents. \66\ Political free trade is both the
norm and normative prescription for a healthy and
constitutional political system in America. And ``[p]olitical
`free trade' does not necessarily require that all who
participate in the political marketplace do so with exactly
equal resources.'' \67\

Mr. Speaker, the CATO Institute writes that limiting the speech of
independent speakers is unwise and unconstitutional. In fact, forcing
PACs on citizens is a matter for courts and not Congress. To
constitutionally regulate campaign finance, the government must
demonstrate that the harms it recites are real, not just mere
speculation or conjecture. Proposals to subject section 527
organizations to political committee status with scant regard to their
activities effectively imposes an any-purpose test in brazen disregard
for the major purpose test of the Supreme Court established under
Buckley v. Valeo.
Mr. Speaker, conservative groups are saying this is not good policy,
that this policy is shutting down those groups that were independent,
free of Congress, free of the Members of Congress, and this bill
influences the outcome of elections and in fact money will be flowing
all over the place as it is doing right now. Money will be flowing all
over the place as we are speaking today.
This is a bad bill. The American people do not want more money into
these campaigns. They want less money. I urge a ``no'' vote on this
bill.
Mr. Speaker, I yield back the balance of my time.
Mr. EHLERS. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Massachusetts (Mr. Meehan), the other sponsor of the bill from the
minority side.
Mr. MEEHAN. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, basically this is a legal issue. 527s are legally
established because their primary purpose is to influence the election
or defeat of a Federal candidate. They have to file with the FEC
because after Watergate in 1974 this Congress passed a law that said if
you are going to have a political committee whose primary purpose is to
influence an election, then they have to register with the FEC.
The FEC ignored 30 years of congressional actions and Supreme Court
jurisprudence in allowing 527s to evade the law. In short, the FEC
failed to do its job and regulate 527s as required under the Watergate
statute. So in September of 2004, Congressman Shays and I filed a suit
against the FEC for failing to enforce the regulations.
You know what is interesting, just last Wednesday the U.S. District
Court Judge Sullivan ruled in favor of our position that the FEC had
failed to present a reasonable explanation for its decision in 2004 not
to regulate 527s. Judge Sullivan remanded the case back to the FEC and
said either you articulate a reason for not regulating 527s or
promulgate a new rule. A new rule that regulates 527s is called for
under the law. That is all we are seeking to do here. That is all we
are seeking to do. One way or the other, the court is going to rule in
favor. This is one way for us to do it quickly.
Mr. EHLERS. Mr. Speaker, I yield myself the balance of my time to
close.
I just have to say, I am a little disappointed in this debate. In
fact, I am greatly disappointed in this debate. I am just a simple
person who grew up in a small town, and I grew up in an area where we
said what we meant, and we meant what we said.
I have heard so much diversionary discussion on this topic from the
minority today, it is very disappointing to me.
The proposition of the bill is very simple: unlimited spending of
soft money was intended to be banned under BCRA. A diversionary tactic
has developed which allows the expenditures of huge amounts of money,
unregulated soft money, and this bill today is an attempt to stop that
practice which is being carried out by people who are violating the
intent of a law we passed a few years ago. That plain and simple is the
issue here.
I urge the body to adopt the bill and stop the abominable practice of
huge amounts of unregulated, unreported money influencing elections.
Let's get back to the original intent of BCRA and put it in place and
enforce it.
Mr. Speaker, I include for the Record the material I previously
referred to.

[From the New York Times, Dec. 29, 2004]

The Soft Money Boomerang

It's encouraging to see signs of life in Washington,
particularly on the Republican side of the aisle, over the
obvious need to plug the newest subterranean pipe for
unregulated campaign funds from big labor, big corporations
and just plain big money.
Of all the subplots in the presidential election, none were
as sorry as the Democrats' pioneering ``527'' groups--named
for the section of the tax code that governs them. The 527's
were intended to circumvent the law's strictures against
having unlimited soft money flood into political races. The
Democrats built these new shadow-party advocacy groups to
attack the president early in the campaign season and build
voter-turnout machines. Then they watched Bush partisans
adapt the same financing device to float the campaign's most
notorious and devastating attack ads, the Swift boat assaults
on John Kerry's heroic war record and his antiwar activities
after he returned from Vietnam.
Dollar-wise, the Democrats proved better at milking the 527
strategy, spending more than three times as much as the
Republicans in stealth-party ads favoring their presidential
ticket. But the Republicans wielded their ads like a rapier
once the Federal Election Commission, true to its track
record, shirked its responsibility by deciding that the new
breed of advocacy groups should not be controlled under the
campaign finance reform laws.
A commission majority endorsed the fiction that the 527's
are independent. The truth is that they were strategically
linked to the candidates and perfect targets for aggressive
F.E.C. regulation and spending limits. The 527 fund-raisers
were the V.I.P. toast of the party conventions last summer,
raising money in luxury suites with a wink and a grin.
After this year's election drubbings, you would think the
Democrats would now see the folly of the 527 committees. But,
no, ranking Democrats are determined to make them a permanent
campaign weapon, with no dollar caps on the corporations,
labor unions and fat-cat partisans who spent more than $550
million on such committees in this year's races.
President Bush condemned the 527's and promised a crackdown
when the Democrats first exploited them and caught the G.O.P.
short. But later in the campaign, he failed to condemn the
Swift boat ads when Senator John McCain did so and pointedly
asked for the president's support. Now Mr. Bush has another
chance to put his considerable political weight behind Mr.
McCain, who is determined to use the coming Congressional
session to pass legislation that would force this blowzy
lucre-genie back into the bottle.
Senator McCain overcame whatever past bad feeling there was
between himself and the president and became a dogged Bush
campaigner this year. We hope the president repays him by
explicitly backing the McCain fight to stop the 527
gamesmanship as an abuse of fair elections. And it's equally
important for the president to enlist in the senator's
campaign to overhaul the election commission. The F.E.C. is a
transparent extension of hack party politics, beholden to
members of Congress who are more concerned with their own
incumbency than the public interest.
____

[From the Washington Post, Apr. 5, 2006]

Close the 527 Loophole

congress should beach the swift boats and george soros, too

The House plans to take up legislation today that would
close the biggest remaining loophole in the campaign finance
system. It would require the political groups known as 527s
to play by the same rules as other committees that aim to
influence federal elections. The House ought to pass the
measure, sponsored by Reps. Christopher Shays (R-

[[Page H1526]]

Conn.) and Martin T. Meehan (D-Mass.), and shut down the kind
of 527 ``soft money'' operation that flourished during the
2004 campaign, like Democrats' America Coming Together and
Republicans' Swift Boat Veterans for Truth.
These committees, named after the section of the tax code
under which they're established, are by definition
``organized and operated primarily'' to influence elections.
When those elections are for federal office, it makes no
sense to let such groups collect six-, seven- and even eight-
figure checks to elect or defeat candidates, while
candidates, political parties and political action committees
are limited to receiving contributions a small fraction of
that size. Similarly, corporations and labor unions--barred
by law from contributing directly to federal candidates or
parties--shouldn't be allowed to write checks to 527s, which
exist for the same purpose.
The usual politics of campaign finance reform--Democrats
for (at least publicly), Republicans against--are upside down
this time around. The reason is that Republicans do better
than Democrats at raising the (relatively) small donations
known as ``hard money,'' while Democrats took the lead in the
past election cycle in raising soft money for 527 groups.
Connoisseurs of hypocrisy should enjoy this spectacle, but
the partisan calculations are probably overstated. Democrats,
with the rise of the Internet, have been improving their
hard-money fundraising. Republicans are bound to draw even in
the 527 race if it continues.
There are concerns that regulating money to 527s would
drive spending further into the shadows, to nonprofit groups
and trade associations that, unlike 527s, don't even have to
disclose their donors and spending. But there are
restrictions on the partisan activity of such groups, and if
a problem develops with the misuse of such organizations,
that could be addressed in future legislation. It's not a
reason for inaction now.
____

[From the Washington Post, Nov. 11, 2003]

Soros's Deep Pockets vs. Bush; Financier Contributes $5 Million More in
Effort To Oust President

(By Laura Blumenfeld)

New York.--George Soros, one of the world's richest men,
has given away nearly $5 billion to promote democracy in the
former Soviet bloc, Africa and Asia. Now he has a new
project: defeating President Bush.
``It is the central focus of my life,'' Soros said, his
blue eyes settled on an unseen target. The 2004 presidential
race, he said in an interview, is ``a matter of life and
death.''
Soros, who has financed efforts to promote open societies
in more than 50 countries around the world, is bringing the
fight home, he said. On Monday, he and a partner committed up
to $5 million to MoveOn.org, a liberal activist group,
bringing to $15.5 million the total of his personal
contributions to oust Bush.
Overnight, Soros, 74, has become the major financial player
of the left. He has elicited cries of foul play from the
right. And with a tight nod, he pledged: ``If necessary, I
would give more money.''
``America, under Bush, is a danger to the world,'' Soros
said. Then he smiled: ``And I'm willing to put my money where
my mouth is.''
Soros believes that a ``supremacist ideology'' guides this
White House. He hears echoes in its rhetoric of his childhood
in occupied Hungary. ``When I hear Bush say, `You're either
with us or against us,' it reminds me of the Germans.'' It
conjures up memories, he said, of Nazi slogans on the walls,
Der Feind Hort mit (``The enemy is listening''). ``My
experiences under Nazi and Soviet rule have sensitized me,''
he said in a soft Hungarian accent.
Soros's contributions are filling a gap in Democratic Party
finances that opened after the restrictions in the 2002
McCain-Feingold law took effect. In the past, political
parties paid a large share of television and get-out-the-vote
costs with unregulated ``soft money'' contributions from
corporations, unions and rich individuals. The parties are
now barred from accepting such money. But non-party groups in
both camps are stepping in, accepting soft money and taking
over voter mobilization.
``It's incredibly ironic that George Soros is trying to
create a more open society by using an unregulated, under-
the-radar-screen, shadowy, soft-money group to do it,''
Republican National Committee spokeswoman Christine Iverson
said. ``George Soros has purchased the Democratic Party.''
In past election cycles, Soros contributed relatively
modest sums. In 2000, his aide said, he gave $122,000, mostly
to Democratic causes and candidates. But recently, Soros has
grown alarmed at the influence of neoconservatives, whom he
calls ``a bunch of extremists guided by a crude form of
social Darwinism.''
Neoconservatives, Soros said, are exploiting the terrorist
attacks of Sept. 11, 2001, to promote a preexisting agenda of
preemptive war and world dominion. ``Bush feels that on
September 11th he was anointed by God,'' Soros said. ``He's
leading the U.S. and the world toward a vicious circle of
escalating violence.''
Soros said he had been waking at 3 a.m., his thoughts
shaking him ``like an alarm clock.'' Sitting in his robe, he
wrote his ideas down, longhand, on a stack of pads. In
January, PublicAffairs will publish them as a book, ``The
Bubble of American Supremacy'' (an excerpt appears in
December's Atlantic Monthly). In it, he argues for a
collective approach to security, increased foreign aid and
``preventive action.''
``It would be too immodest for a private person to set
himself up against the president,'' he said. ``But it is, in
fact''--he chuckled--``the Soros Doctrine.''
His campaign began last summer with the help of Morton H.
Halperin, a liberal think tank veteran. Soros invited
Democratic strategists to his house in Southampton, Long
Island, including Clinton chief of staff John D. Podesta,
Jeremy Rosner, Robert Boorstin and Carl Pope.
They discussed the coming election. Standing on the back
deck, the evening sun angling into their eyes, Soros took
aside Steve Rosenthal, CEO of the liberal activist group
America Coming Together (ACT), and Ellen Malcolm, its
president. They were proposing to mobilize voters in 17
battleground states. Soros told them he would give ACT $10
million.
Asked about his moment in the sun, Rosenthal deadpanned:
``We were disappointed. We thought a guy like George Soros
could do more.'' Then he laughed. ``No, kidding! It was
thrilling.''
Malcolm: ``It was like getting his Good Housekeeping Seal
of Approval.''
``They were ready to kiss me,'' Soros quipped.
Before coffee the next morning, his friend Peter Lewis,
chairman of the Progressive Corp., had pledged $10 million to
ACT. Rob Glaser, founder and CEO of RealNetworks, promised $2
million. Rob McKay, president of the McKay Family Foundation,
gave $1 million, and benefactors Lewis and Dorothy Cullman
committed $500,000.
Soros also promised up to $3 million to Podesta's new think
tank, the Center for American Progress.
Soros will continue to recruit wealthy donors for his
campaign. Having put a lot of money into the war of ideas
around the world, he has learned that ``money buys talent;
you can advocate more effectively.''
At his home in Westchester, N.Y., he raised $115,000 for
Democratic presidential candidate Howard Dean. He also
supports Democratic presidential contenders Sen. John F.
Kerry (Mass.), retired Gen. Wesley K. Clark and Rep. Richard
A. Gephardt (Mo.).
In an effort to limit Soros's influence, the RNC sent a
letter to Dean Monday, asking him to request that ACT and
similar organizations follow the McCain-Feingold restrictions
limiting individual contributions to $2,000.
The RNC is not the only group irked by Soros. Fred
Wertheimer, president of Democracy 21, which promotes changes
in campaign finance, has benefited from Soros's grants over
the years. Soros has backed altering campaign finance, an
aide said, donating close to $18 million over the past seven
years.
``There's some irony, given the supporting role he played
in helping to end the soft money system,'' Wertheimer said.
``I'm sorry that Mr. Soros has decided to put so much money
into a political effort to defeat a candidate. We will be
watchdogging him closely.''
An aide said Soros welcomes the scrutiny. Soros has become
as rich as he has, the aide said, because he has a
preternatural instinct for a good deal.
Asked whether he would trade his $7 billion fortune to
unseat Bush, Soros opened his mouth. Then he closed it. The
proposal hung in the air: Would he become poor to beat Bush?
He said, ``If someone guaranteed it.''
____

April 4, 2006.
Dear Representative: The House is scheduled to consider
this week H.R. 513, legislation sponsored by Representatives
Chris Shays (R-CT) and Marty Meehan (D-MA) to require that
527 groups spending money to influence federal elections
comply with federal campaign finance laws.
Our organizations support H.R. 513, which is necessary to
close the FEC-created loophole that allowed both Democratic
and Republican 527 groups to spend hundreds of millions of
dollars in unlimited soft money to influence the 2004
presidential and congressional elections.
The organizations include the Campaign Legal Center, Common
Cause, Democracy 21, the League of Women Voters, Public
Citizen and U.S. PIRG.
Under H.R. 513, the 527 political groups would be able to
continue to undertake activities to influence federal
elections, but would do so under the same campaign finance
laws that apply to candidates, political parties and other
political committees whose major purpose is to influence
federal elections. Enclosed is a Q and A on H.R. 513.
Much of the soft money contributed to 527 groups to
influence the 2004 federal elections came from a relatively
small number of very wealthy individuals. According to
campaign finance scholar Anthony Corrado, just 25 individuals
accounted for $146 million raised by Democratic and
Republican 527 groups that spent money to influence the 2004
federal elections.
In order to qualify as a 527 group under the Internal
Revenue Code and receive tax-exempt status, Section 527
groups must be ``organized and operated primarily'' to
influence elections. They are, by definition, ``political
organizations,'' not ``issue groups,'' and they should not be
operating outside federal campaign finance laws when they are
spending money to influence federal elections.

[[Page H1527]]

As the Supreme Court stated in the McConnell case upholding
the constitutionality of the Bipartisan Campaign Reform Act,
Section 527 groups ``by definition engage in partisan
political activity.'' The Court stated in McConnell that 527
groups ``are, unlike Sec. 501(c) groups, organized for the
express purpose of engaging in partisan political activity.''
Section 527 groups are treated differently under campaign
finance laws than Section 501(c) groups because they are
fundamentally different entities than 501(c) groups.
Section 527 groups, by definition, are organized and
operated ``primarily'' to influence elections. This standard
has long been used to define political groups that are
covered by and must comply with federal campaign finance
laws. Section 527 groups have the same organizing principle
as candidate committees, political party committees and
PACs--their primary purpose is to influence elections--and
should be subject to the same campaign finance laws.
Section 501(c) groups, by contrast, are prohibited by their
tax status from having a primary purpose to influence
elections. Although Section 501(c) groups (except for
charitable groups) are permitted to spend some money for
political purposes, tax laws impose constraints on the
political activity they can engage in, while similar
constraints are not imposed on 527 groups.
The 2004 election demonstrated widespread soft money abuses
by 527 groups, which spent hundreds of millions of dollars to
influence the presidential and congressional elections
without complying with the federal campaign finance laws.
H.R. 513 addresses this demonstrated problem.
As we noted in our letter yesterday, an amendment may be
offered by Representative Mike Pence (R-IN) to repeal the
existing aggregate limit on the total contributions that an
individual can give to all federal candidates and political
parties in a two-year election cycle. The Pence amendment
would repeal an essential Watergate reform that was enacted
to prevent corruption and the appearance of corruption, and
was upheld as constitutional on this basis by the Supreme
Court.
We strongly oppose the Pence proposal, which would allow a
President, Senator or Representative to solicit, and a single
donor to contribute, a total of more than $3,000,000 for the
officeholder's party and the party's congressional candidates
in a two-year election cycle.
We urge you to vote against the Pence ``poison pill''
amendment and also urge you to vote against H.R. 513 if it
includes the Pence proposal or any variation of it.
Another proposal may be made to repeal section 441a(d) of
the campaign finance laws, a provision which imposes limits
on spending by political parties in coordination with their
federal candidates.
We oppose repealing the limits on coordinated party
spending with candidates.
Under Supreme Court rulings, a political party can spend an
unlimited amount of hard money in a federal candidate's race,
independently of that candidate, even if the party has
reached its limit on coordinated spending with that candidate
in the race.
Thus, repeal of the limits on coordinated spending will not
change the total amount of money a political party can spend
in a given race, but rather will change the amount that can
be spent in coordination with the party's candidate in the
race.
Supporters of repealing the limit argue that this is a more
effective way for parties to assist their candidates. We
oppose repeal of the coordinated spending limit, however,
since it provides a constraint on parties serving as a
vehicle for individual donors to evade the limits on
contributions from individuals to candidates.
H.R. 513 is based on the simple proposition that a 527
group that spends money to influence federal elections should
abide by the same set of rules that apply to other political
groups whose purpose is to spend money to influence federal
elections. There is no basis for allowing a 527 group to
claim the advantage of a tax exemption as a ``political
organization'' under the tax laws, while at the same time
failing to comply with the federal campaign finance laws on
the claim that it is not a ``political committee.''
We strongly urge you to vote for H.R. 513, provided it does
not include the Pence ``poison pill'' proposal to repeal or
undermine the aggregate limit on individual contributions.
Campaign Legal Center
Common Cause
Democracy 21
League of Women Voters
Public Citizen
U.S. PIRG
____

House of Representatives,

Washington, DC, April 4, 2006.
Hon. Vernon J. Ehlers,
Chairman, Committee on House Administration, House of
Representatives, Washington, DC.
Dear Chairman Ehlers: In recognition of the desire to
expedite consideration of H.R. 513, the ``527 Reform Act of
2005,'' the Committee on the Judiciary hereby waives
consideration of the bill. There are provisions contained in
H.R. 513 that implicate the rule X jurisdiction of the
Committee on the Judiciary. Specifically, section 5 provides
for judicial review of certain constitutional challenges to
the legislation. This provision implicates the rule
X(1)(l)(1) jurisdiction of the Committee over ``the judiciary
and judicial proceedings, civil and criminal.''
The Committee takes this action with the understanding that
by foregoing consideration of H.R. 513, the Committee on the
Judiciary does not waive any jurisdiction over subject matter
contained in this or similar legislation. The Committee also
reserves the right to seek appointment to any House-Senate
conference on this legislation and requests your support if
such a request is made. Finally, I would appreciate your
including this letter in the Congressional Record during
consideration of H.R. 513 on the House floor. Thank you for
your attention to these matters.
Sincerely,
F. James Sensenbrenner, Jr.,
Chairman.
____

U.S. House of Representatives,
Washington, DC, April 4, 2006.
Hon. James Sensenbrenner,
Chairman, Committee on the Judiciary, House of
Representatives, Washington, DC.
Dear Chairman Sensenbrenner: Thank you for your recent
letter regarding your Committee's jurisdictional interest in
H.R. 513, the 527 Reform Act of 2006, scheduled for floor
consideration this week.
I acknowledge your committee's jurisdictional interest in
Section 5 of the bill, and agree that your decision to forego
further action on it will not prejudice the Committee on the
Judiciary with respect to its jurisdictional prerogatives on
this or similar legislation. I will include a copy of your
letter and this response in the Congressional Record when the
legislation is considered by the House.
Thank you again for your assistance.
Sincerely,
Vernon J. Ehlers,
Chairman.

Mr. EHLERS. Mr. Speaker, I yield back the balance of my time.
Mr. BLUMENAUER. Mr. Speaker, throughout my career, I have
consistently and strongly supported sensible campaign finance reform.
As introduced, H.R. 513, the 527 Reform Act, was a measure I could have
supported. In the long run, it would have been politically neutral; not
giving an advantage to either Republicans or Democrats.
However, with the changes that have been made to the bill by the
Republican leadership, this bill would needlessly allow unlimited
contributions from party committees to coordinate with campaigns and
thereby dramatically raising the amount of money spent on elections,
not reduce it. This provision alone would dramatically undermine the
campaign finance reforms we worked so hard to put in place in 2002. The
bill is neither necessary nor fair and would increase the role of money
in campaigns and elections.
Mr. VAN HOLLEN. Mr. Speaker, today I voted against H.R. 513, the
``527 Reform Act of 2005'' introduced by Congressmen Shays and Meehan.
As a strong and long-term supporter of the Shays-Meehan/McCain-Feingold
campaign reform legislation, I want to take this opportunity to explain
my decision to vote against H.R. 513 today.
On the surface, H.R. 513 appears to be simple. It would require ``527
groups,'' which represent individuals or groups that are not directly
affiliated with political party organizations, to register and report
with the Federal Election Commission in the same manner as political
committees. I support that part of this bill.
However, the Republican Leadership inserted a poison pill into the
bill. In the dark of night, the Republican-controlled House Rules
Committee added an amendment to roll back current limits on
Congressional campaign committee spending in supporting a candidate in
a House general election. In 2006, Congressional committees are limited
to spending a maximum of $79,200 in a Congressional race. This amount
is set by law and adjusted for inflation. Under current law,
Congressional campaign committees possess the authority to spend
unlimited amounts on a campaign. Congressional committees must
currently borrow and use the limits assigned by law to each party's
national committee and each state party committee. The amended bill
will lift current caps and upset the balance of spending.
A second killer amendment eliminates Congressional campaign committee
limits on party spending for Congressional candidates. This bill allows
each party to accept transfers from other committees within the party
structure when spending for a candidate. This change will enable the
National Republican Congressional Committee to accept unlimited
transfers from the Republican National Committee for use in spending on
any Congressional campaign. It is not a coincidence that Republicans
outspend Democrats 5:1.
We have just seen the former Republican Majority Leader resign from
Congress in disgrace. Another prominent member of the majority party
sits in jail for accepting tawdry bribes while selling his office.
Prominent administration officials have been arrested or are under
indictment. This is not a time to be playing parliamentary games with
the ethical process.
And that is why I voted against this shamefully amended version of
H.R. 513 today.
Mr. CASTLE. Mr. Speaker, I am proud to join my colleagues in strong
support of H.R.

[[Page H1528]]

513, the 527 Reform Act of 2006. H.R. 513 takes an important step in
closing a ``soft-money'' loophole by requiring 527 groups to comply
with the same federal campaign laws that political parties and
political action committees must follow.
In fact, the Federal Election Commission should have already done
this. A federal district judge in Washington recently called for
action, ruling that the Federal Election Commission had ``failed to
present a reasoned explanation'' for not requiring 527 groups to
register as political committees.
H.R. 513 will close this FEC-created loophole that has allowed 527
groups, of both parties, to spend hundreds of millions of dollars in
unlimited soft money to influence presidential and congressional
elections without complying with campaign finance laws.
During the last election cycle, 527 groups raised $426 million.
Likewise, much of the soft money came from a relatively small number of
very wealthy individuals. According to campaign finance scholar Anthony
Corrado, just 25 individuals accounted for $146 million raised by
Democratic and Republican 527 groups that spent money to influence the
2004 federal elections. And, we are already seeing an increase in the
rate at which 527s are raising money this election cycle.
If the primary role of 527 groups is to influence federal elections,
which it clearly is, they must play by the same set of rules that apply
to other political groups whose purpose is to spend money to influence
federal elections. There should be no exception.
At a time when the public is calling for transparency and
accountability, no longer can we tolerate a loophole that allows this
type of money from the wealthy few to unfairly influence the political
process.
If you voted for the Shays-Meehan/McCain-Feingold Bipartisan Campaign
Finance Reform bill in 2002--and 240 of us did--it would be wholly out
of step to not support H.R. 513.
I urge all my colleagues to vote in favor of H.R. 513.
Mr. HOLT. Mr. Speaker, I would like to commend the efforts of my
colleagues Chris Shays and Marty Meehan to strengthen elections in this
country. However, I oppose the measure they offer today because it
seeks to address the wrong problem, and as a result, this proposal
squelches participation by individuals and small donors in the
electoral process. For that reason, and because there are First
Amendment implications as well, I will vote against this measure.
On my first day as a Member of Congress in 1999, I joined the fight
for campaign finance reform. I did so because we needed to curtail the
influence of money in politics. The Bipartisan Campaign Finance Reform
Act (BCRA) was critical to that effort because it eliminated corporate
money and capped the size of donations that could be made to political
candidates and political parties. These steps made it less likely that
elected officials will be beholden to large donors instead of to their
constituents.
The critical distinction between BCRA and the proposal before us
today is that BCRA limited the amount of money that could go toward
political candidates and parties. Today's proposal limits donations to
organizations that advocate for a policy or a point of view. That is a
radically different approach. Let's remember something: Elected
officials are supposed to hear from their constituents at election
time. A group of citizens speaking loudly through the collective action
of a 527 is a democracy behaving as it should.
Organizations that attain 527 status under the Internal Revenue Code
are dedicated to specific ideals and legislative objectives that they
believe are best for America. Some 527s want more investment in
education. Some want lower taxes. Some support the right to choose.
Others oppose it. None of these organizations, however, may be
dedicated to a specific person or party. They may not advocate for or
against a specific candidate, nor coordinate their activities with a
candidate's campaign. By definition, their involvement is the stuff of
political discourse.
As a strong, early, and vocal supporter of the Bipartisan Campaign
Finance Reform Act, I agree with the ban on raising and spending
unregulated ``soft'' money by candidates and political parties. BCRA
helps prevent elected Members of Congress from developing a ``second
constituency,'' one that is different from their actual constituency,
which is the people they represent. However, BCRA did not intend to
prohibit robust debate of political ideals, values, and proposals for
the betterment of our country. Doing so not only stifles political
discourse, it runs afoul of the First Amendment right to speak freely.
In February of 2004, I joined several of my colleagues in writing to
the Federal Elections Commission (FEC) stating my view that while we
need to break the link between unregulated contributions and federal
officeholders, we need to protect, preserve, and even increase
political involvement by ordinary citizens and independent
associations.
If this bill passes, it's important to note who would be affected.
According to the Institute for Politics, Democracy and the Internet,
527 fundraising and spending increased fourfold between 2000 and 2004,
while at the same time, voter turnout reached an unprecedented high of
almost 126 million voters in 2004--15 million more than in 2000. This
was largely a direct result of voter registration, education, and
mobilization activities organized by 527s. Most importantly, although
it has been widely reported that certain wealthy individuals made
multi-million dollar contributions to 527s, the vast majority of 527
receipts were from individual donations of under $200. The liberal 527
organization ``America Coming Together,'' for example, raised $80
million in 2004, 80 percent of which was from donations of less than
$200. Similarly, the conservative 527 organization ``Progress for
America'' raised $45 million in 2004, 85 percent of which was from
donations of less than $200.
These statistics are in stark contrast to much of the debate on this
issue. Supporters of the proposal before us today have pointed to
wealthy individuals who contributed large sums to 527s as evidence that
527s should be curtailed. My question is this: Even if this bill
passes, what is to stop wealthy individuals from simply paying for the
same television ads, mail pieces, and organizational efforts on their
own, without 527s? If this bill passes, these same individuals will
simply spend their money on their own. It is small donors--who, as I
said already, are the majority of donors to 527s--who will be denied
the benefit of collective action. Squelching 527s will not curb the
involvement of wealthy individuals, it will simply make them towering
figures on the playing field of public discourse. This is exactly the
wrong outcome.
If we want to tighten issue advocacy, we should do so by enforcing
the already existing requirement that 527s remain truly independent of
political candidates and parties. Truly independent 527 organizations
expand the political debate, increase the public's opportunity to hold
elected officials accountable, and increase participation in the
political process by ordinary Americans.
The SPEAKER pro tempore (Mr. LaHood). All time for debate has
expired.
Pursuant to House Resolution 755, the previous question is ordered on
the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Ms. MILLENDER-McDONALD. Mr. Speaker, I object to the vote on the
ground that a quorum is not present and make the point of order that a
quorum is not present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
Pursuant to clause 8 of rule XX, this 15-minute vote on the question
of passage will be followed by 5-minute votes on House Resolution 692
and H.R. 3127.
The vote was taken by electronic device, and there were--yeas 218,
nays 209, not voting 6, as follows:

[Roll No. 88]

YEAS--218

Aderholt
Akin
Alexander
Bachus
Baker
Baldwin
Barrett (SC)
Barton (TX)
Bass
Beauprez
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boren
Boustany
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Capito
Carter
Case
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Cubin
Culberson
Davis (KY)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
Ehlers
Emerson
English (PA)
Everett
Feeney
Ferguson
Fitzpatrick (PA)
Foley
Forbes
Fortenberry
Foxx
Frelinghuysen
Gallegly
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Goode
Goodlatte
Granger
Graves
Green (WI)
Gutknecht
Hall
Harris
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hobson
Hostettler
Hulshof
Hunter
Hyde
Inglis (SC)
Issa
Jenkins
Jindal
Johnson (CT)
Johnson (IL)
Johnson, Sam
Keller
Kelly
Kennedy (MN)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
Kuhl (NY)
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas

[[Page H1529]]

Lungren, Daniel E.
Maloney
Manzullo
Marchant
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McKeon
Meehan
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy
Musgrave
Myrick
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Otter
Oxley
Pearce
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Pombo
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Royce
Ryan (WI)
Ryun (KS)
Saxton
Schmidt
Schwarz (MI)
Sensenbrenner
Sessions
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (NJ)
Smith (TX)
Sodrel
Souder
Stearns
Sullivan
Sweeney
Tancredo
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wu
Young (AK)
Young (FL)

NAYS--209

Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Barrow
Bartlett (MD)
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Butterfield
Capps
Capuano
Cardin
Cardoza
Carnahan
Carson
Chandler
Chocola
Clay
Cleaver
Clyburn
Conyers
Cooper
Costa
Costello
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (TN)
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Doyle
Edwards
Emanuel
Engel
Eshoo
Etheridge
Farr
Fattah
Filner
Flake
Ford
Fossella
Frank (MA)
Franks (AZ)
Garrett (NJ)
Gohmert
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Harman
Hastings (FL)
Hensarling
Herseth
Higgins
Hinchey
Hinojosa
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson, E. B.
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick (MI)
Kind
King (IA)
Kucinich
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren, Zoe
Lowey
Lynch
Mack
Markey
Marshall
Matheson
Matsui
McCarthy
McCollum (MN)
McDermott
McGovern
McIntyre
McKinney
McMorris
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murtha
Nadler
Napolitano
Neal (MA)
Neugebauer
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Paul
Payne
Pelosi
Pence
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Schiff
Schwartz (PA)
Scott (GA)
Scott (VA)
Serrano
Shadegg
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Strickland
Stupak
Tauscher
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Wasserman Schultz
Waters
Watt
Waxman
Weiner
Westmoreland
Wexler
Woolsey
Wynn

NOT VOTING--6

Evans
Hoekstra
Ros-Lehtinen
Schakowsky
Tanner
Watson

{time} 1829

Mr. WATT changed his vote from ``yea'' to ``nay.''
Messrs. FORBES, OSBORNE, WELDON of Florida, MANZULLO, and POE changed
their vote from ``nay'' to ``yea.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.

____________________