[Congressional Record (Bound Edition), Volume 146 (2000), Part 13]
[House]
[Pages 19433-19434]
[From the U.S. Government Publishing Office, www.gpo.gov]



                        CAMPAIGN FINANCE REFORM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 19, 1999, the gentleman from Texas (Mr. Doggett) is recognized 
during morning hour debates for 5 minutes.
  Mr. DOGGETT. Mr. Speaker, in June this Congress approved the first 
substantive reform of our campaign finance laws since 1979. The 
bipartisan vote for approval followed months of discussion of the 
perverse impact on our democracy of clandestine political organizations 
organized under section 527 of the Internal Revenue Code.
  While this was a small victory among many defeats on the campaign 
finance reform front, it was nevertheless significant. The path to 
progress, however, was a twisted path. Final approval followed repeated 
rejection of bipartisan reform proposals in the House Committee on Ways 
and Means. Finally, after months of delay, the House Republican 
leadership reversed course and brought up a 527 bill for our 
consideration here in the House, late at night, with no amendments 
permitted and very truncated debate.
  During previous Committee on Ways and Means consideration on this 
matter, the gentleman from Pennsylvania (Mr. Coyne) and I had offered a 
more comprehensive alternative. Unfortunately, the provisions of this 
alternative were omitted from the final bill during the belated 
scrambling for immediate floor consideration. Now, many State and local 
officials are paying the price for this mistake with unnecessary time 
and effort in completing unnecessary filings here in Washington that 
duplicate those they were already making on the State level.
  Mr. Speaker, I have just introduced legislation with a number of our 
colleagues to correct this error. This new bill will address the 
concerns of the State and local officials and organizations, it will 
apply the gift tax as an added element of deterrence for undisclosed 
contributions as we previously proposed, and it will make other 
necessary technical corrections of errors that were committed in the 
course of rushing the previous bill to the floor late one night.
  Mr. Speaker, while the problem of having the State and local 
committees make duplicative filings certainly did not have a bipartisan 
origin, it does demand a bipartisan solution. As with the original 527 
bill that I first presented in March, I seek support of both Republican 
and Democratic colleagues to correct what one group has called ``the 
senseless duplication of efforts on the part of many State and local'' 
organizations forced to fill out forms and send them to the Internal 
Revenue Service, even if they have already made substantially the same 
public disclosure to State regulatory agencies.
  Mr. Speaker, this bill will provide an exemption for those State and 
local groups that are meeting substantially the same public disclosure 
requirements as now apply to Federal 527 organizations. Simply, 
exempting the committees without requiring them to be ``substantially 
similar'' could create an unwise loophole in the modest bill that 
Congress has approved, but doing it as we propose and as we proposed in 
our previous legislation in the Committee on Ways and Means will reduce

[[Page 19434]]

the burden on the Internal Revenue Service; and, more importantly, it 
would reduce the burden on many local and State organizations. 
Additionally, this bill removes the requirement that electronic filings 
be duplicated in writing, thereby reducing paperwork for both the filer 
and the IRS.
  As with most bills that get rushed through the House, there are other 
ambiguities that require technical corrections. To prevent a 
misinterpretation that would weaken enforcement, this new bill will 
clarify, as did our old committee alternative, that all of the 527s' 
income, whether segregated or not, is to be considered taxable income 
in case of failure to file the required notice. Further, the bill will 
clear up an ambiguity as to whether the failure to file penalty is to 
be treated as a tax liability or a civil penalty, which could otherwise 
delay enforcement and collection. Through this change, the State and 
local groups, which may have filed late because of a lack of notice 
about the new law could be afforded the same ``reasonable cause'' 
arguments available to every other taxpayer under the civil penalty 
section. Finally, the bill will add back the omitted companion 
penalties that we proposed for fraudulent filings for violations of the 
new 527 law and the gift tax penalty for undisclosed contributions.
  This legislation is narrowly drawn to secure approval now in the 
waning days of this Congress. But much more comprehensive additional 
reform is needed. Already, there are groups that are shifting from 527s 
to different tax status. Within the last few days, The Washington Post 
has reported that ``Political groups that want to keep their finances 
secret are changing their tax status in order to avoid having to reveal 
their donors and spending, making an end-run around a new law intended 
to crack down on anonymous political activity.''
  Among the worst of these is a group called ``Citizens for Better 
Medicare'' that is determined to block our efforts to end price 
discrimination against seniors. This is discrimination by which our 
seniors in America are literally treated worse than dogs, having to pay 
the highest prices, not only more than animals in the United States, 
but more than people anywhere around the globe. This group has expended 
so much in political advertising on television that one commentator 
recently suggested it has practically become a third political party 
along with the Democrats and the Republicans.
  Mr. Speaker, I hope that next year we can have comprehensive reform 
to address this problem we had anticipated and which could have been 
largely avoided had the alternative we advanced in the Committee on 
Ways and Means been adopted. But today, I ask my colleagues to join us 
in a modest change that can help our State and local committees and 
public officials and improve the reform legislation adopted in June.

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