From the Washington Post

FEC Moves to Regulate Groups Opposing Bush
By Thomas B. Edsall
Washington Post Staff Writer
Thursday, February 19, 2004

The Federal Election Commission decided yesterday that many of the political
committees raising "soft" money to campaign against President Bush are
subject to regulation, but it postponed deciding how tough the restrictions
should be.
The FEC voted 4 to 2 to warn Americans for a Better Country that activities
that "promote, attack, support or oppose" a federal candidate must be paid
for with hard money, a type of political donation that, unlike soft money,
has tight restrictions on sources and amounts. This is a broader standard
than used in the past. Activities that benefit a mix of federal, state and
local candidates are to be paid for with a mix of hard and soft money, the
commission determined.
Interpretations of yesterday's action varied greatly.
FEC Vice Chairman Ellen L. Weintraub said the decision should not severely
constrain those seeking to raise and spend soft money, which is not subject
to limits and can come from unions and corporations as well as individuals.
"I don't think sophisticated political actors would have a hard time
figuring out how to work within this framework," she said.
Republican National Committee Chairman Ed Gillespie, in contrast, said the
ruling will put out of business "groups like America Coming Together [ACT],
the Media Fund, Partnership for America's Families and the MoveOn.org Voter
Fund." All are pro-Democratic groups organized under Section 527 of the tax
code.
These and other 527 committees, as they are known, are aiming to become a
shadow version of the Democratic Party, financing television commercials and
voter mobilization in 15 to 17 battleground states this fall. They plan to
pay for some or all of their activities with large soft-money contributions.
The McCain-Feingold campaign finance law barred the national parties from
accepting soft money, prompting the creation of many 527 committees.
Campaign watchdog groups have challenged the groups' legality, and
yesterday's FEC ruling was among the first to address their questions.
Harold Ickes, a former aide to President Bill Clinton and now head of the
Media Fund, accused Gillespie of misconstruing the consequences of
yesterday's FEC decisions to "inhibit our supporters and donors by his
willful misreading."
Jim Jordan, spokesman for the Media Fund and ACT, two of the most ambitious
pro-Democratic groups, said: "It's clear that today's action is limited in
its scope. We remain confident that we'll have the room we need to operate
robustly and effectively."
The Media Fund, which plans to run TV ads attacking Bush and supporting
Democrats, and ACT, which plans to conduct voter mobilization in 17
battleground states, have a fundraising goal this year of $95 million each.
McCain-Feingold's restrictions on soft money have hurt the Democratic Party,
which depended heavily on large contributions from unions and rich partisans
to pay for issue ads and voter mobilization. The GOP has been far more
successful raising still-legal hard money, which can involve contributions
of up to $25,000 to the parties.
Key decisions yet to be made by the FEC include: If organizations such as
ABC or ACT can spend a mix of hard and soft money, what rules will govern
the ratio? And under what circumstance will 527 organizations -- such as the
Media Fund, which is currently not registered with the FEC -- and
politically active groups known as 501c4s, fall under FEC regulation?
In reports filed with the FEC, ACT has used an allocation formula allowing
it to pay 98 percent of its costs with soft money and 2 percent with hard
money. The FEC yesterday signaled it will reconsider such allocation
formulas in May.
If ACT were required to spend hard and soft money equally, the committee
would have to raise large amounts of difficult-to-come-by hard money, a
costly and time-consuming process.
On philosophical, not partisan, grounds, two of the Republican commissioners
-- Chairman Bradley A. Smith and David M. Mason -- voted against regulation
of the Democratic groups, rejecting pressure from the RNC. "If Republicans
think they can win by silencing their opponents, they are wrong," said
Smith, and "they are going to deserve to lose."© 2004 The Washington Post Company