Pure Politics

There's always another campaign finance loophole

In a speech last month, Sen. John McCain said Bradley Smith is unfit to head the Federal Election Commission because his principles prevent him from properly enforcing the nation's campaign laws. At the same time, the Arizona Republican suggested that Smith has no principles.

McCain, who co-authored the Bipartisan Campaign Reform Act of 2002, threw Smith in with the "stooges of special interests" who are determined to undo the senator's handiwork. And even while conceding that Smith has rebuked fellow Republicans for trying to use campaign finance regulations to hamper the Democrats, McCain called his positions "politicized."

McCain is so upset he can't think straight. In particular, he's upset about groups like America Coming Together and Progress for America, ostensibly independent (but by no means neutral) political organizations that are tax-exempt under section 527 of the Internal Revenue Code.

McCain says it's obvious such groups, known as 527s, should be treated as "political committees," which would prevent them from accepting the unregulated contributions his law prohibits the national parties from taking. On Thursday the FEC decided to delay action on the issue, causing McCain's head to explode (I'm assuming).

McCain's outrage about "these groups openly flouting the law" is the latest episode of a futile crusade that restricts speech to prevent "the appearance of corruption." The pattern by now is familiar: New rules lead to new evasions, which in turn lead to new rules.

There's one basic reason Congress and the FEC have been unable to get it right after all these years. It's called the First Amendment.

Not that the Supreme Court hasn't tried to help. In 1976 the Court approved the limits on contributions to political committees imposed by the Federal Election Campaign Act of 1974. While spending money to communicate a message is intimately tied to freedom of speech, the justices reasoned, giving or getting the money is another matter.

Trying to apply this implausible distinction, the Court immediately ran into trouble. To avoid reaching "groups engaged purely in issue discussion," it restricted the definition of "political committee" to "organizations that are under the control of a candidate or the major purpose of which is the nomination or election of a candidate."

The Court also said political messages should trigger the law's regulations only when they "expressly advocate the election or defeat of a clearly identified candidate." The law itself allowed the use of unregulated money for voter registration and get-out-the-vote efforts.

As interpreted by the FEC, these restrictions on the restrictions led to the "crisis" of "sham issue ads" and "soft money" that provoked McCain and his allies to pass another law. They not only banned soft money but prohibited unions and corporations—including advocacy groups organized as nonprofit corporations—from sponsoring "electioneering communication," defined as TV or radio ads that refer to federal candidates and appear in their states or districts within 60 days of an election.

When it upheld the law last December, the Supreme Court said even this blatant attempt by incumbent politicians to muzzle their critics was justified by the need to prevent circumvention of earlier "reforms." So the FEC asked the next logical question: Should we allow interest groups to freely criticize public officials the rest of the year?

For now McCain is focusing his ire on 527s. But if the FEC ultimately does what he wants and prevents these groups from soaking up the soft money the parties used to get, the nasty stuff might instead flow to 501(c) advocacy groups such as the Sierra Club and the National Rifle Association.

Naturally, these organizations are alarmed at the prospect that they too will be regulated as political committees, which helps explain why the FEC received a record 150,000 comments when it raised the issue. McCain's response is not very reassuring: "There is no immediate campaign finance regulatory problem with the 501(c) groups."

And what about all the other "loopholes"? If a wealthy man like George Soros should be prevented from giving as much as he wants to a group that sponsors ads critical of the Bush administration, why should he be allowed to spend his money on such ads directly? Given the danger that interest groups might buy or establish their own media outlets (as the NRA is considering), is it safe to exempt journalists from the government's speech restrictions?

Uh, forget what I said about John McCain. He's a helluva guy.

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