To enforce the McCain-Feingold campaign
finance bill, the Federal Election Commission has proposed a list
of rules to control the political expenditures of “527
groups” — nonprofit groups that are named after a
section of the tax code that regulates their behavior. This move,
potentially guided by politics, is a serious threat to free speech
rights.

Laura Wong

The regulations seek to reclassify certain 527 groups as
political action committees, a move that would have far-reaching
implications. If a 527 group spends more than $50,000 a year on
voter outreach or on criticizing or supporting an incumbent federal
official, it gets branded as a political action committee. These
committees, unlike 527’s, are subject to strict
McCain-Feingold rules on raising and spending money.

This change presents 527 groups with a tough choice. Many 527
groups, such as Moveon.org, spend significant amounts of money to
raise awareness about political issues and candidates. Under these
rules, Moveon.org and similar groups would have to choose between
either ceasing their advertisements or accepting restrictive
regulations that would hamper their ability to raise money. The
ability of these groups to exercise free speech rights and express
opinions about federal officeholders would be greatly
diminished.

Additionally, nonpartisan nonprofit groups would be limited in
their activities. A well-known example is MTV’s Rock the
Vote, an independent, unbiased group primarily dedicated to
increasing voter registration among youth. Because voter outreach
is considered a political activity under the new rules, if MTV
spent more than $50,000 in its Rock the Vote effort, it would have
to reclassify Rock the Vote as a PAC. Rock the Vote, which relies
partially on monetary donations, would not be able to accept any
money from foundations that support its cause.

Most troubling is that the new rules are not effective from when
they are enacted; rather, they are retroactive. The FEC will have
the authority to examine a group’s activity up to four years
into the past, well before the regulations or the McCain-Feingold
bill were ever enacted. If the FEC determines that a group has
spent in excess of $50,000 in any one of the past four years, it
has the authority not only to reclassify it as a PAC, but also to
halt further activity of the group until it is able to raise
sufficient hard money to “repay” prior expenditures in
excess of the $50,000 limit. This would threaten the financial
viability of many groups, which rely primarily on unregulated
“soft money” contributions.

Because most 527 groups tend to be left-leaning, it appears
likely that this move was spurred by partisan intentions.
Democrats, who are far less efficient than the Republicans when it
comes to raising hard money from individual donors, rely on the
initiative of well-endowed 527 groups such as Moveon.org to run
attack ads against Republicans. If the new rules are enacted, such
organizations will be silenced, further increasing the Republican
monetary advantage.

When the six-member nonpartisan FEC votes on the new rules, they
should not pass. The constitutional right to free expression must
not be stifled by overzealous enforcement of the McCain-Feingold
bill.

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