Only Money

Campaign finance reform bites supporters in the rear.

SIERRA, a glossy magazine published by the Sierra Club, has a Web site called "The Bush Archives" at sierraclub.org/sierra/bush_archive.asp. There you can find links to 62 original articles criticizing George W. Bush's impact on Mother Nature. Entries include "The Assault on Wild America: Mapping the Bush administration's damage," from March 2004; "W Watch," a recurring feature since May 2003; and a pre-2000 election package rooting for candidate Dubya and his fellow Republicans to lose. "We could win this time," the editors insisted.

Turns out they could lose much more than they feared. The McCain-Feingold campaign finance reform bill -- which the Sierra Club lobbied for with great enthusiasm -- was finally signed into law in March 2002. That law was upheld by the Supreme Court in its December 2003 ruling McConnell v. FEC, and at press time the Federal Elections Commission (FEC) was on the verge of establishing specific new interpretive guidelines for how Americans can legally raise money and make public statements that could affect national elections.

According to the strictest of scenarios drawn up in the FEC's April draft proposal, issue-oriented advocacy groups such as the Sierra Club and the National Rifle Association could suddenly find themselves regulated by the same rules that govern "express advocacy" groups such as STOPHillaryPAC or the Committee for a Democratic Majority.

That would mean no more contributions from foundations, corporations, or unions; no more personal gifts larger than $5,000; and no more anonymous donors, among other fund raising restrictions. To avoid this fate, many of these groups -- known as 501(c)s, for the section in the tax code that defines their tax-free status -- would need to show that they do not "promote, support, attack or oppose" specific candidates in federal elections, which is the standard the Supreme Court's McConnell v. FEC decision established to determine whether state political parties and political action committees warrant regulation.

This very column you're reading, in a magazine published by the 501(c)(3) Reason Foundation, could be construed as an "attack" on federal politicians, and therefore limit the foundation's ability to raise and spend money.

These restrictions would smother the rich variety of editorial expression the United States enjoys from its nonprofit sector. "Sierra magazine could not mention the president," Sierra Club Executive Director Carl Pope maintains. What about Pope's new book Strategic Ignorance, published by the Sierra Club, which attacks Bush's environmental record? "We'd have to pull it off the market and stop selling it," he says. "Ninety-five percent of our speech would be shut down."

Pope was one of a half-dozen heads of nongovernmental organizations to testify at the FEC's mid-April "rule making" hearings, which were intended to pave the way for a May 13 commission vote on regulations that could significantly alter the course of the November elections. "If adopted in anything like the form in which they have been proposed," a coalition including the Sierra Club and 414 other groups wrote in a joint letter to the FEC, the rules "would cause countless nonprofit organizations to drastically curtail their current programs or significantly alter the way in which they raise funds and conduct their activities. The proposed rules would seriously impair vigorous free speech and advocacy."

For years, newspaper editorial boards and other avowed friends of the First Amendment have scoffed at the argument that restricting political spending would restrict speech. In 2004 McCain-Feingold enthusiasts are discovering that the logic of prohibition can come around and bite them right in the bank account.

"Fundamentally," says Pope, the FEC proposal "effectively amended the First Amendment to say 'Congress shall make no law abridging freedom of speech, except with regard to political candidates in a campaign year.'...It was staggering in its breadth."

Strange as it may seem, you'll hear the same sort of criticism from FEC Chairman Bradley Smith. In direct contrast to Pope, Smith is a Republican and has never supported McCain-Feingold. Yet he has argued that the 501(c)s should be addressed in this round of rule making, even though Pope and Sen. John McCain (R-Ariz.) himself are bitterly opposed to it.

Why? Because Republicans are demanding that the FEC immediately place limits on 527s -- independent nonprofits, not run by any specific party or federal candidate, that are allowed to raise unlimited "soft money" and spend it freely on political ads in exchange for detailed disclosure. Unlike 501(c)s, these groups can be aimed mainly at influencing elections. There are several hundred of them, mostly Democratic (the biggest dozen combined have raised more than $65 million for John Kerry already, according to the Center for Responsive Politics), so the GOP is keen on turning off the spigot in this election cycle.

But as Smith told a Republican National Lawyers Association convention in March, "Merely because the Democrats are doing it doesn't make it illegal....These Republicans have decided to depart from their usual moorings, and instead are attempting to make aggressive use of the McConnell opinion in an effort to obtain short-term political gain."

So why does Smith want to look at groups like the Sierra Club? His logic is that if the FEC rules and definitions need changing to limit 527s, they should address the activities of some 501(c)s as well. "It seems to me quite clear that a lot of activity would go to 501(c)s if we limit the 527s," he says. The Sierra Club and other nonprofits would rather the FEC lay off the rule making and let both types of organizations continue under current regulations; Republicans want to extend McCain-Feingold to cover 527s while exempting the 501(c)3s; and Smith gleefully calls both sides hypocrites.

Such talk has reformers fuming. McCain and Russell Feingold (D-Wisc.) are introducing a new bill to scrap the FEC and start over, and in April McCain blasted Smith and his fellow commissioners as "stooges of the special interests" who "are trying to undermine this law."

But McCain-Feingold did not discuss 527s (even though such groups were already in existence), nor did it specifically exempt 501(c)s from existing rules. So the FEC is left trying, on one hand, to respond to the political pressure of the moment and, on the other, to resolve the inconsistencies between McCain-Feingold, McConnell, and the 1976 Supreme Court decision Buckley v. Valeo, which upheld parts of the post-Watergate Federal Election Campaign Act.

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