[Congressional Record (Bound Edition), Volume 150 (2004), Part 6]
[Senate]
[Pages 7733-7735]
[From the U.S. Government Publishing Office, www.gpo.gov]




            THE FEDERAL ELECTION COMMISSION CHAIRMAN MUST GO

  Mr. McCAIN. Mr. President, I was in Arizona recently, and by chance I 
watched C-SPAN airing the Federal Election Commission hearing on the 
issue of 527s. Let me assure my colleagues, it was both eye opening and 
appalling.
  Once in a while, we have a public debate in Washington that serves as 
a perfect metaphor for the cynical way in which business is sometimes 
done here. The argument over whether and when the Federal Election 
Commission should regulate new soft money fundraising groups provides 
us with one of those moments. In it, we can see how badly our election 
watchdog has served the public and the urgent need to fix it.
  The Chairman of the Federal Election Commission, Bradley Smith, 
claims apparently some moral superiority on the issue of 527s because 
as a Republican he stands in opposition to the Republican Party's 
effort to ensure 527 groups comply with the law. While some may look 
upon his views as principles, I can only conclude that they again 
illustrate the same unfitness to serve on the Federal Election 
Commission he has shown since he was appointed 5 years ago.
  Despite claims that his contempt for the Federal elections laws was 
merely that of an academic commentator and that he would uphold the 
laws as passed by Congress if confirmed, Mr. Smith has made no secret 
since arriving at the FEC of his disdain for the Federal Election 
Campaign Act of 1974, as well as the Bipartisan Campaign Reform Act of 
2002. He has done so once again in the pending rulemaking.
  Even after the Supreme Court decision in McConnell v. FEC, Mr. Smith 
has gone out of his way to criticize the Court's decision and the law 
he is supposed to enforce. In one public speech he said:


[[Page 7734]]

       Now and then the Supreme Court issues a decision that cries 
     out to the public, ``We do not know what we are doing.'' 
     McConnell is such a decision.

  Further evidence of Mr. Smith's predilection can be found in an 
article in the May 3 edition of National Review in which he writes:

       Campaign reform passed Congress and was upheld by the 
     Supreme Court because groups hostile to freedom spent 
     hundreds of millions of dollars to create an intellectual 
     climate in which free political participation was viewed as a 
     threat to democracy.

  This is perhaps the most inflammatory and inappropriate comment I 
have ever seen by an individual who is supposed to be enforcing 
existing law, affirmed in its constitutionality by the Supreme Court of 
the United States of America. To assert that proreform groups had 
somehow brainwashed Congress and the Supreme Court is simply pathetic 
and solidifies my belief that Mr. Smith cannot administer our campaign 
finance laws in good faith because he is incapable of putting his sworn 
duties above his personal opinion.
  By the way, his treatment of Mr. Nobel, a witness before the FEC, was 
as bullying and as cowardly as I have ever seen anyone conduct 
themselves in our Nation's Capital and clearly was an abuse of his 
authority as Chairman of the Commission.
  Mr. Smith's views on the constitutionality of the Nation's campaign 
finance laws have been repeatedly rejected by the Supreme Court. Mr. 
Smith was dead wrong in his views that the Federal Election Campaign 
Act and its restrictions on contributions were unconstitutional, and 
Mr. Smith was dead wrong in his views that BCRA was unconstitutional. 
Mr. Smith seems to be incapable of accepting the fact that the Supreme 
Court of the United States, not Mr. Smith, is the last word on the 
constitutionality of campaign laws and that it is his job as an FEC 
Commissioner to carry out, not thwart, the Supreme Court's mandate.
  I do not deny that Mr. Smith is entitled to his personal views on the 
issue of regulating 527s. I am saying, however, that he is failing to 
fulfill his duties as the chairman of a Federal agency and one who is 
sworn to uphold and enforce the law. Just as we would not tolerate the 
appointment of a pacifist to be Chairman of the Joint Chiefs of Staff 
or the Director of the FBI who believes the whole Penal Code should be 
null and void, so we should not accept a Chairman of the FEC who 
opposes campaign laws upheld as constitutional by the U.S. Supreme 
Court.
  Knowing of his opposition to the laws he was sworn to uphold, I 
cannot fathom why Mr. Smith would have even accepted his current 
position in the first place, certainly now that the Supreme Court has 
proven him wrong and upheld the constitutionality of a law that he 
stated was ``clearly unconstitutional.'' It makes no sense. It makes no 
sense for him to be charged with enforcing a law he so publicly opposes 
on policy and legal grounds.
  I know if I were in Mr. Smith's shoes, I would do the honorable thing 
and resign if I was so determined to carry on a crusade against Federal 
regulation of campaign finance. I would leave the FEC position to be 
filled by someone who believed in the job.
  If any of my colleagues think I am exaggerating about these FEC 
hearings, by the way, they should get a tape from C-SPAN and look at it 
themselves. It was shocking.
  One very troubling aspect of the hearings was the way in which some 
Commissioners and antireform witnesses joined in a chorus of complaint 
that ``no one knew what Congress intended to do'' when it passed FECA 
in 1974 and BCRA in 2002.
  One witness testified that it took Congress 7 years to figure out 
what to do about soft money. I am somewhat amazed by such a statement 
because anyone who was in Washington during those 7 years knows that 
the main component of our bill--from the very beginning--was a ban on 
soft money. You can't get much more definitive than a ban. What did 
take 7 years was convincing our opponents to allow a vote on the 
measure, and when we finally got our vote, we had clear majorities in 
both Houses.
  Some of the lawyers who testified that no one knows what Congress 
intended to do in these bills were the very same lawyers who spent 
years urging Members to vote against BCRA, and argued its 
unconstitutionality before the Supreme Court. Give me a break. As 
witnesses to Congressional intent, they have zero credibility. Let me 
be clear on this: Senator Feingold and I repeatedly told the FEC 
exactly what we intended to accomplish with our legislation, and the 
legislative history of FECA from 1974 is equally as clear. The only 
confusion in this area has been with the FEC itself and those 
Commissioners who just simply didn't like the actions taken by 
Congress.
  The Commission's hearings centered on the issue of regulation of so-
called ``527 groups'' that are raising and spending millions of dollars 
in soft money in the current presidential election. These groups 
readily admit that their intended purpose is to influence the outcome 
of Federal elections. FECA has long required these groups to register 
as Federal political committees and comply with Federal campaign 
finance limits. Unfortunately, because the FEC has misinterpreted and 
undermined the law, we find ourselves in this unenforced regulatory 
limbo today. The 1974 law requires that any group with a ``major 
purpose'' of influencing a Federal election, and which spends more than 
$1,000 doing so, must use the same limited hard money contributions as 
the political parties and the candidates themselves. In recent years 
though, the FEC slouched into the feckless and unjustified position of 
not enforcing the law in the case of groups which avoided the ``magic 
words'' of ``express advocacy'' but were set up and operated to 
influence Federal elections. Then, in McConnell, the Supreme Court 
itself made clear what many of us already knew--that the Constitution 
did not require an ``express advocacy'' standard, and that such a 
standard is ``functionally meaningless.'' That's the words of The 
United States Supreme Court.
  But here we are, with these groups openly flouting the law and openly 
spending soft money for the express purpose of influencing the 
presidential election while the FEC sits on its hands once again. Like 
the emperor with no clothes, those Commissioners just do not know what 
to do now that the Supreme Court has removed their ``express advocacy 
is required by the Constitution'' rationale for failing to regulate 
political activity by the 527 political organizations. As a result, 
these organizations remain busy soliciting and spending millions for 
the avowed purpose of influencing Federal elections.
  That the FEC's lack of action undermines the law isn't just my 
opinion. The Supreme Court confirmed this in its recent decision 
upholding the soft money ban. In McConnell v. FEC, the Supreme Court 
stated, in no uncertain terms, how we ended up in the soft money crisis 
to begin with. The Justices placed the blame squarely at the doors of 
the FEC, concluding that the agency had eroded the prohibitions on 
union and corporate spending, and the limits on individual 
contributions through years of bad rulings and rulemakings, including 
its formulas for allocation of party expenses between Federal and non-
Federal accounts. Regarding the allocation regulations for parties, the 
Supreme Court stated in McConnell that the FEC had ``subverted'' the 
law, issued regulations that ``permitted more than Congress . . . had 
ever intended'', and ``invited widespread circumvention of FECA's 
limits on contributions.'' That is a damning indictment of the behavior 
and performance of the Federal Elections Commission.
  Based on the recent hearings, it seems entirely possible that the FEC 
will once again abdicate its statutory responsibilities and refuse to 
end this new soft money scheme--or at least put off any action until 
the Presidential election is over. In fact, FFC Vice-chair Ellen 
Weintraub recently opposed a rulemaking on 527 activity saying that:

       At this stage in the election cycle, it is unprecedented 
     for the FEC to contemplate

[[Page 7735]]

     changes to the very definitions of terms as fundamental as 
     ``expenditure'' and ``political committee'' . . . sowing 
     uncertainty during an election year.

  Ms. Weintraub further stated:

       I will not be rushed to make hasty decisions, with far-
     reaching implications, at the behest of those who see in our 
     hurried action their short-term political gain.

  Ms. Weintraub has no business looking at the election calendar. That 
is none of her business. What is her business is to enforce existing 
law according to the law in the U.S. Supreme Court upholding its 
constitutionality. It should not matter to Ms. Weintraub whether we are 
in an even numbered year, an odd numbered year, fall, spring, winter, 
or summer. This is an incredible statement as to how politics affects a 
Federal commission that is supposed to rule on laws, not on political 
campaigns.
  Of course, it is not that complicated. All the FEC needs to do now is 
simply enforce existing Federal law as written by Congress in 1974 and 
interpreted by the Supreme Court in a number of cases, including the 
McConnell case. It defies the whole purpose of the FEC, to say it 
should not properly enforce the law in the middle of an election year 
because such enforcement might affect that election. We want the law 
enforced. I have never heard of a regulatory agency that has any 
reference whatsoever to political campaigns.
  The fact the FEC has neglected to properly enforce the law correctly 
in the past is not a reason or justification for the Commission to 
continue failing to properly enforce the law, now that the Supreme 
Court has made clear the FEC was wrong. If the FEC fails to act now, 
the FEC will simply be treading the same destructive path it has 
followed for a generation.
  We know systemic campaign finance abuses have usually begun when one 
political party decides to push the envelope and the FEC declines to 
act, leading the other party to adopt the same illegal tactics. In 
1988, one party invented the use of soft money to promote their 
Presidential campaign, evading campaign finance rules. The Commission 
let them get away with this. This is well documented. The other party 
followed.
  In 1996, the soft money scheme was raised to an art form and the 
Commission did nothing. You have to ask whether the Commission has 
learned anything about the consequences of its failure to properly 
enforce the law. History proves it is imperative that the Commission 
act now. If it does not, we can rest assured both parties will soon be 
trying to out-raise each other in this venue, and a whole new soft 
money scheme will have blossomed.
  By the way, the reality is if these soft money 527s are allowed to 
stand--they are now, we know, largely funded by Democrats. Who in the 
world doesn't understand if you allow this to stand, then the 
Republicans will do the same thing, and understandably so? Just as in 
1988 one party was allowed to do it, so the other party was able to as 
well.
  Much of the controversy at the Commission has been ginned up by an 
artfully crafted misinformation campaign designed to persuade the 
nonprofit community--the 501(c)s--that any FEC action to rein in 527s 
would have the unintended consequence of limiting their own advocacy 
efforts. It is true certain campaign finance rules for spending by 
nonprofits are different than they are for political groups like 527s. 
There is no immediate campaign finance regulatory problem with the 
501(c) groups. I repeat, there is no immediate campaign finance 
regulatory problem with the 501(c) groups as there is with the 527 
groups, and no need--no need to address 501(c) groups in this 
rulemaking.
  Some have suggested the agency do what Congress did when it passed 
BCRA: Issue a ruling but make the change effective after the election.
  What these critics fail to recognize, however, is that Congress was 
creating an entirely new set of election rules in BCRA. All that is 
required here is for the FEC to properly enforce law that has been on 
the books for 30 years, and to abandon its wrong interpretations of the 
law as made clear in the McConnell decision. To issue new regulations 
now and make them effective after the 2004 election would be for the 
FEC to say that ``we know the law has been wrongly interpreted for 
years but we are going to allow that to continue for the rest of this 
year, and then next year, we will start interpreting that law 
correctly.'' This is simply not rational and it is an abdication of 
their responsibilities.
  Finally, it is essential that the FEC act quickly to fix its absurd 
allocation rules, which govern the mix of soft and hard money a 
political committee can spend when it is supporting both State and 
Federal candidates. It is clear that a number of the current crop of 
527s exist only to defeat President Bush. But through the absurd FEC 
allocation formulas, if these same entities also claim to be working in 
state elections, they could use soft money for 98 percent of their 
expenditures--a complete end-run around the soft money ban in Federal 
races.
  Despite all the evidence, I am still hopeful the Commissioners will 
summon the political will to do the right thing now. There are some 
commissioners who want to do the right thing. I want them to step 
forward and do it. But even if they do, the agency's structural 
problems will be the same as they ever were. By unfortunate custom, 
three Republicans and three Democrats are chosen by their party 
leadership, usually with the express purpose of protecting their 
party's interests, rather than enforcing the law. It takes four votes 
for the Commission to take action--a requirement that has been a recipe 
for deadlock and bipartisan collusion and gave birth to the soft money 
problem we're trying to put behind us.
  Last month I testified before the Senate Rules Committee on the issue 
of 527s. During my testimony I stated that one of the problems the FEC 
faces today is that some Commissioners, and in particular Chairman 
Smith, refuse to accept the Supreme Court's conclusions in the area of 
campaign financing. A decision by the FEC to abdicate its 
responsibility at this politically inconvenient moment will only 
provide further evidence that it is time to start over. If the 
Commission has become too hopelessly politicized to do its job, then we 
must replace it with an agency that will.
  The FEC's current difficulty in dealing with an issue as 
straightforward as these 527 organizations spending soft money to 
influence the 2004 Federal elections, and the 3-3 ties at the 
Commission when it recently considered an advisory opinion on this 
issue, are only the most recent examples of the need for fundamental 
FEC reform. With my fellow BCRA sponsors, I have introduced legislation 
that would scrap the FEC and start over, using a new organizational 
structure and administrative law judges to avoid deadlocks and take 
some of the politics out of the process. Whether we adopt this or some 
other basic reform, it is time for a watchdog with some bite.
  I thank the President for his patience as I ran over the previously 
agreed-to time.
  This is a very serious issue. We are not going to give up on it. We 
didn't work for 7 years to get campaign finance reform done and upheld 
by the U.S. Supreme Court to have a group of six people down there who 
are so politicized that they refuse to enforce a law which was passed 
by this Congress in overwhelming numbers, finally, and upheld by the 
U.S. Supreme Court.
  I want to tell them and all of those other people I watched on C-SPAN 
who are trying to undermine this law that we will not let you get away 
with it. American politics and the political process is too sacred for 
me to allow these stooges of special interests around this town to 
prevail and prevent us from restoring faith and confidence in the 
American people and their electoral system.
  Again, I appreciate the patience of the Presiding Officer.
  I yield the floor.

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