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Who's Afraid of George Soros?

From the March 8, 2004 issue: Campaign finance reform bites the hand that passed it.

Mar 8, 2004, Vol. 9, No. 25 • By DAVID TELL
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Advocacy Groups Permitted to Use Unlimited Funds . . . Ruling Favors Democrats

--New York Times, lead story, February 19

FEC Moves to Regulate Groups Opposing Bush

--Washington Post, same day

(1) You know, I remember reading those stories. And I remember being totally confused by them. Should I be embarrassed? No: We're talking about federal election law, here. Almost nobody understands this stuff. And besides, the coverage itself was confused. Even people who do understand federal election law couldn't make heads or tails of it. According to the Times, the Federal Election Commission has given a green light to certain political outfits that are planning to raise and spend "unlimited" amounts of money against President Bush in the upcoming election--but the agency is requiring those groups to operate "under far more restrictive rules." Which doesn't sound "unlimited" at all, does it?

That business in the Times about the FEC's decision having a potentially "profound" effect on this year's presidential race, "by helping Democrats"? Well, that wasn't quite right, either. Actually, there's no way in hell the commission's February 18 ruling--and related, still-pending rulings that might logically follow--could possibly help the Democratic party.

What's just happened at the FEC may be the best news George W. Bush will get all year.

(2) Whoa, back up a minute. What exactly did the FEC do on February 18? The commission responded to a request for legal guidance from "Americans for a Better Country" (ABC), an unincorporated and "nonconnected" (i.e., unofficial) Republican group organized under Section 527 of the Internal Revenue Code. With the announced goal of helping to "reelect President Bush and defeat the Democratic nominee," ABC had established a bank account--registered as a "political committee" with the FEC--from which it intended to make various direct and undisguised presidential campaign expenditures. Consistent with longstanding law governing fundraising for such expenditures, deposits in this account, ABC's "federal" account, would consist only of contributions from individuals and other political committees, and in limited amounts: $5,000 per donor per year.

As an unincorporated and nonconnected enterprise, however, ABC also claimed it retained authority to solicit considerably larger contributions from a much broader array of sources: the "soft money"--provided by corporations, labor unions, and wealthy individuals--that the Bipartisan Campaign Reform Act of 2002 (the McCain-Feingold bill, or "BCRA") has since denied to national political parties, federal candidates, and federal officeholders. And what the Republican National Committee used to do with such soft money, but could no longer, the unofficial Americans for a Better Country now planned to do instead. ABC would finance a variety of ostensibly indirect campaign activities--"issue ads" and "generic" voter mobilization programs that avoided blatant "express advocacy" messages ("Vote for Bush") and substituted wink-and-nod appeals in their place ("Call President Bush and tell him how wonderful you think he is"). In other words, ABC intended to use huge, unregulated pots of cash--deposited in separate, "nonfederal" bank accounts that weren't registered with the FEC--to produce the same, "sham" electioneering appeals that campaign finance reformers had hoped to make illegal.

Can we do that, ABC asked the FEC last November? How much soft money does the new law allow us to raise and spend on behalf of the Bush reelection campaign?

To make a long story short, the FEC's February 18 answer was: Not very much.

(3) Why should the commission's less than accommodating response to a Bush-friendly group of Republicans pose problems for the Democratic party? Because most Republican operatives, including the ones who sought last month's FEC ruling, would be perfectly content to raise and spend no soft money at all this year--provided, that is, they could be confident that their Democratic counterparts weren't raising or spending any, either.