[Congressional Record (Bound Edition), Volume 146 (2000), Part 9]
[Extensions of Remarks]
[Page 13296]
[From the U.S. Government Publishing Office, www.gpo.gov]



AMENDING INTERNAL REVENUE CODE TO REQUIRE 527 ORGANIZATIONS TO DISCLOSE 
                          POLITICAL ACTIVITIES

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                               speech of

                          HON. EARL BLUMENAUER

                               of oregon

                    in the house of representatives

                         Tuesday, June 27, 2000

  Mr. BLUMENAUER. Mr. Speaker, the House has finally done something 
about the shadowy political action committees organized under Section 
527 of the tax code which can hide their donors, activities, and even 
their existence from public view. Sunshine is the best disinfectant and 
now some light will be shed on these stealth PACs that have been flying 
under the radar to avoid detection.
  Very early this morning, we voted to require these tax-exempt groups 
to disclose their activities. The Senate adopted very similar 
legislation earlier this month. It has been perfectly within the rights 
of anyone to give unlimited sums of money aimed at influencing American 
elections with no limits, no restrictions, and complete anonymity.
  Here's how the loophole worked: You set up a bank account, collected 
as many millions as you could, ran ads under whatever innocuous name 
you chose--Americans for a Decent Society or whatever--and attacked or 
supported any candidate you chose. All you had to do was refrain from 
using the ``magic words'' like ``vote for,'' ``vote against,'' elect,'' 
``defeat,'' etc. in reference to a particular candidate. You could 
mention the candidates by name. You could show their unflattering 
visage against a backdrop of belching smokestacks. And then you could 
disappear from the face of the earth.
  That unique combination--unlimited funds with total anonymity--was 
the beautiful thing about the 527s, if you were a clever political 
fundraiser, or a billionaire with a private agenda.
  But that is changing now. The Campaign for America, a group of well-
respected business leaders founded by Jerome Kohlberg, recently stated, 
``Tax-exempt status is a subsidy, not an entitlement. Accordingly, 
organizations obtaining this subsidy have obligations and 
responsibilities to the public that provides this benefit. Every other 
nonprofit involved in electioneering such as parties, PACs and campaign 
committees discloses to the Federal Election Commission. There is no 
justification for making an exception for these 527 organizations. In 
return for the public's largesse, these organizations should at least 
be required to disclose their existence, substantial contributors and 
substantial expenditures.''
  The legislation we passed requires ``527'' groups to disclose who 
they are, where they get their money, and how they spend it. It does 
not adequately cover political activities during this election cycle, 
but it is a good start.
  By closing this loophole, we are beginning to repair the damage that 
our current campaign system has done to public trust in government. 
This could be the first meaningful campaign finance reform passed in 
Congress in many years. Let's lift this curtain of secrecy that has 
shrouded elections for too long.

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