CQ TODAY - POLITICS & ELECTIONS\
April 20, 2005 - 7:48 p.m.

**The Early Question on 527 Groups: Hold Them Back, or Rebalance the
Game?**

By Gregory L. Giroux, CQ Staff

This could be the year Congress tries to unravel parts of the sweeping
2002 election law that banned national party committees and federal
officeholders from raising soft money - but effectively steered the
funds to so-called 527 organizations that were a dominant force in last
year's presidential election.

"Soft money in politics continues to thrive," House Administration
Chairman Bob Ney, R-Ohio, said Wednesday as he opened that committee's
evaluation of competing campaign finance revisions.

At issue is whether Congress should restrict how 527 organizations -
named for the section of the federal tax code under which they
incorporate - raise and spend their funds.

Ney was - and is - a vigorous critic of the 2002 law (PL 107-155), but
he said he would keep an open mind about ways to change it. Two
competing bills on the issue are pending before the committee. One,
sponsored by Christopher Shays, R-Conn., and Martin T. Meehan, D-Mass.,
would impose some fundraising restrictions on the 527 groups; the other,
sponsored by Mike Pence, R-Ind., and Albert R. Wynn, D-Md., would leave
527s untouched but loosen some hard money contribution limits they say
hamstring political parties.

The Shays-Meehan bill, which is supported by several campaign watchdog
groups, would have the effect of requiring 527 groups such as Moveon.Org
and Swift Boat Veterans for Truth to accept limited hard money dollars
to finance federal election activity.

Shays and Meehan said their bill is necessary to close a "loophole"
resulting from an FEC decision last year not to regulate 527 groups,
even though it was clear they were spending soft money to influence
federal elections.

"We must not usher the return of the corrupt soft money system only
three years after Congress put an end to it," Meehan said.

Pence and Wynn, meanwhile, laid out their case that Congress should
leave 527s alone, and seek to strengthen political parties by removing
the aggregate limit on contributions to national parties and political
action committees.

In last year's election, Pence said, political parties were "on the
sidelines, watching 527s dominate the American political debate."

Democrats face political risks under both bills. Many Democrats are
nervous about regulating 527 groups because their party benefited last
year from voter registration drives and television advertisements from
Democratic-favoring 527s.

Steve Rosenthal, the chief executive officer of America Coming Together,
a prominent left-leaning 527, exhorted supporters in an e-mail Wednesday
to oppose the Shays-Meehan bill and its Senate companion, which he said
amounted to an "aggressive assault on political free speech."

When the Federal Election Commission last year was weighing whether to
regulate 527s, more than 120 House Democrats who supported the 2002 law
told the FEC that the law did not place the same restrictions on 527
groups as it did on federal officials and the parties.

Rep. Juanita Millender-McDonald of California, the panel's ranking
Democrat, said that her constituents "were more informed and more
involved" in last year's election as a result of 527 political activity.

"We should allow them to continue that freedom of expression," she said.

But Millender-McDonald also was concerned that repealing the aggregate
limits on contributions to party committees - a central feature of the
Pence-Wynn bill - would disproportionately help Republicans, who
historically have been more adept than Democrats at raising those types
of funds.

Wynn argued that the present aggregate limits effectively force donors
to "pick and choose" among a limited universe of candidates they could
support. Repealing the limit, he said, would allow contributors to
support more candidates.

Cleta Mitchell, a Republican election lawyer with the firm Foley and
Lardner, touted the Pence-Wynn measure's repeal of limits on the
"coordinated" funds that national political parties spend in support of
federal candidates.