Public Citizen Urges FEC to Reject Proposal to Regulate Political Activities of Independent Groups

Feb. 4, 2004

Public Citizen Urges FEC to Reject Proposal to Regulate Political Activities of Independent Groups

Advisory Opinion Could Affect All Activity by Non-Profits That Praise or Criticize Officeholders

WASHINGTON, D.C. – A draft advisory opinion, which will be considered for approval by the Federal Election Commission (FEC) on Thursday, would vastly expand the definition of political “expenditures” subject to regulation under federal campaign finance law, potentially to include activities by non-profit groups that praise or criticize officeholders on significant policy issues. Public Citizen today submitted comments opposing the advisory opinion.

In the wake of news stories that pro-Democratic labor unions and progressive organizations are planning to spend millions of dollars in soft money as independent Section 527 groups – groups that fall outside federal limits on contributions – the Republican Party, supported by some campaign reform groups, has sought to persuade the FEC to extend the existing prohibition on corporate and union money being used for any electioneering activities to 527s and apply the existing $5,000 contribution limit to 527s. This “soft money” ban for independent groups is being considered by the FEC as it decides the fate of a draft advisory opinion requested by an organization called “Americans for a Better Country” (ABC).

The opinion defines “expenditure” for electioneering purposes as praising or criticizing officeholders – something nonprofit groups do frequently. Under the proposed rules, nonprofit groups that criticize the government might have to operate under all the federal rules applicable to a political action committee (PAC), even though their tax status forbids them from engaging in the same types of political activities as a PAC.

Public Citizen, which takes no government, corporate, union or trade association money, funds its work through membership fees, publication sales and foundation grants.

 

“The big problem with this advisory opinion is that it could be interpreted to shut down the advocacy activity of all non-profit groups, not just the politically charged Section 527s. Nonpartisan advocacy and educational efforts to, for example, draw a link between campaign cash and corruption of public officials could be at risk,” said Joan Claybrook, president of Public Citizen.

Though the draft advisory opinion is interpreted by some supporters as applying only to Section 527 groups, nothing in the language of the advisory opinion or in the campaign finance statutes assures that the opinion’s effect would be so limited. In fact, the definition of expenditure is what is used to define a “political committee” subject to regulation. The draft opinion’s language could conceivably capture all types of educational and advocacy work by a wide range of non-profit groups, such as statements criticizing President Bush for the Iraqi War, if such activities are a major purpose of the group.

“If we could be assured that regulation would be limited to 527 groups, we would support it, but the problem is that this opinion does not clearly stop there and it could quash the activities of thousands of organizations,” said Craig Holman, legislative representative for Public Citizen’s Congress Watch.

Click here to read Public Citizen’s comments.

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