AP via CNN:

House votes to limit donations to nonprofit political groups
Move to curtail '527s' viewed as beneficial to GOP

Thursday, April 6, 2006; Posted: 10:08 a.m. EDT (14:08 GMT)
WASHINGTON (AP) -- House-passed legislation could put tight financial
constraints on the nonprofit political groups that relied on
millionaire donors to vault to a prominent role in the 2004
presidential elections.
The Republican-backed legislation, approved Wednesday on a narrow
218-209 vote, would require those groups, known as "527s," to register
as political committees and abide by campaign funding limits.
The "527" refers to a section of the tax law. These groups are
tax-exempt organizations that use voter mobilization and issue
advertisements to influence federal elections.
Democrats, who three years ago led the successful effort to enact
legislation limiting unregulated "soft money" donations to political
parties, overwhelmingly opposed the bill, saying it was a Republican
ploy to shackle political groups that up to now have favored
Democratic causes.
Republicans in turn questioned the opposition of Democrats who voted
for the Bipartisan Campaign Reform Act three years ago on the grounds
that there was too much money in politics.
"Anyone who doesn't vote for this that supported BCRA is a hypocrite,"
charged Rep. Tom Reynolds, R-New York, who heads the House Republican
campaign committee.
The 527 groups raised more than $400 million in 2003-04, with
organizations supporting John Kerry or opposing President Bush
bringing in $266 million, according to the Political Money Line
campaign finance tracking service.
Businessman George Soros gave more than $23 million to
Democratic-aligned 527 groups such as Media Fund and America Coming
Together. Houston homebuilder Bob Perry contributed more than $8
million, specifically to help the Swift Boat Veterans for Truth group
that questioned Kerry's Vietnam War record.
Such donations would become a thing of the past under the legislation.
Donors would be able to contribute only $25,000 a year for partisan
voter mobilization activities and $5,000 a year for direct
expenditures on federal elections.
The bill now goes to the Senate, where Democratic opposition could
make passage difficult.
Rep. Rahm Emanuel, D-Illinois, leader of the Democratic campaign
committee in the House, said this approach "doesn't do anything to
address the problems of the scandals facing this Congress, this
institution."
Democrats also said it was unfair to limit fundraising by 527s but
ignore the activities of other groups that at times engage in
politics. They said funding could now shift to groups categorized as
501(c), such as social welfare groups and trade associations that
might favor Republicans. Such organizations generally have
restrictions on their political activities but, unlike 527s, don't
have to identify donors.
"This is a surreal debate," said Rep. Christopher Shays,
R-Connecticut, who with Rep. Marty Meehan, D-Massachusetts, sponsored
both the 2002 campaign finance act and the 527 bill. He noted how the
two sides had changed positions, and chided the Democrats who
supported spending limits and then "once it passed looked for
loopholes behind the law."
The White House, in a statement, said the Bush administration
"strongly supports" the bill. "The president has repeatedly called for
an end to abuses of the nation's campaign finance system through the
use of 527 organizations."
The House bill also would repeal current law that limits the amount a
party can spend in direct coordination with candidates.
Fred Wertheimer, president of the campaign finance watchdog group
Democracy 21, said his organization opposes that provision but
supports the overall bill.
"Most Democrats and most Republicans are approaching this particular
fight on partisan grounds," Wertheimer said. "But it is a simple
proposition that groups whose purpose is to influence federal
elections and are spending money to influence federal elections should
comply with campaign finance laws."