39–006 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 109–181 

527 REFORM ACT OF 2005 

JULY 22, 2005.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. NEY, from the Committee on House Administration, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 513] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on House Administration, to whom was referred 

the bill (H.R. 513) to amend the Federal Election Campaign Act of 

1971 to clarify when organizations described in section 527 of the 

Internal Revenue Code of 1986 must register as political committees, and for other purposes, having considered the same, report 

thereon with an amendment and without recommendation. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘527 Reform Act of 2005’’. 

SEC. 2. TREATMENT OF SECTION 527 ORGANIZATIONS. 

(a) DEFINITION OF POLITICAL COMMITTEE.—Section 301(4) of the Federal Election 

Campaign Act of 1971 (2 U.S.C. 431(4)) is amended— 

(1) by striking the period at the end of subparagraph (C) and inserting ‘‘; or’’; 

and 

(2) by adding at the end the following: 

‘‘(D) any applicable 527 organization.’’. 

(b) DEFINITION OF APPLICABLE 527 ORGANIZATION.—Section 301 of such Act (2 

U.S.C. 431) is amended by adding at the end the following new paragraph: 

‘‘(27) APPLICABLE 527 ORGANIZATION.— 

‘‘(A) IN GENERAL.—For purposes of paragraph (4)(D), the term ‘applicable 527 

organization’ means a committee, club, association, or group of persons that— 

‘‘(i) has given notice to the Secretary of the Treasury under section 527(i) 

of the Internal Revenue Code of 1986 that it is to be treated as an organization described in section 527 of such Code; and 

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‘‘(ii) is not described in subparagraph (B). 

‘‘(B) EXCEPTED ORGANIZATIONS.—A committee, club, association, or other 

group of persons described in this subparagraph is— 

‘‘(i) an organization described in section 527(i)(5) of the Internal Revenue 

Code of 1986; 

‘‘(ii) an organization which is a committee, club, association or other 

group of persons that is organized, operated, and makes disbursements exclusively for paying expenses described in the last sentence of section 

527(e)(2) of the Internal Revenue Code of 1986 or expenses of a newsletter 

fund described in section 527(g) of such Code; 

‘‘(iii) an organization which is a committee, club, association, or other 

group that consists solely of candidates for State or local office, individuals 

holding State or local office, or any combination of either, but only if the 

organization refers only to one or more non-Federal candidates or applicable State or local issues in all of its voter drive activities and does not refer 

to a Federal candidate or a political party in any of its voter drive activities; 

or 

‘‘(iv) an organization described in subparagraph (C). 

‘‘(C) APPLICABLE ORGANIZATION.—For purposes of subparagraph (B)(iv), an organization described in this subparagraph is a committee, club, association, or 

other group of persons whose election or nomination activities relate exclusively 

to— 

‘‘(i) elections where no candidate for Federal office appears on the ballot; 

or 

‘‘(ii) one or more of the following purposes: 

‘‘(I) Influencing the selection, nomination, election, or appointment of 

one or more candidates to non-Federal offices. 

‘‘(II) Influencing one or more applicable State or local issues. 

‘‘(III) Influencing the selection, appointment, nomination, or confirmation of one or more individuals to non-elected offices. 

‘‘(D) EXCLUSIVITY TEST.—A committee, club, association, or other group of persons shall not be treated as meeting the exclusivity requirement of subparagraph (C) if it makes disbursements aggregating more than $1,000 for any of 

the following: 

‘‘(i) A public communication that promotes, supports, attacks, or opposes 

a clearly identified candidate for Federal office during the 1-year period 

ending on the date of the general election for the office sought by the clearly identified candidate (or, if a runoff election is held with respect to such 

general election, on the date of the runoff election). 

‘‘(ii) Any voter drive activity during a calendar year, except that no disbursements for any voter drive activity shall be taken into account under 

this subparagraph if the committee, club, association, or other group of persons during such calendar year— 

‘‘(I) makes disbursements for voter drive activities with respect to 

elections in only 1 State and complies with all applicable election laws 

of that State, including laws related to registration and reporting requirements and contribution limitations; 

‘‘(II) refers to one or more non-Federal candidates or applicable State 

or local issues in all of its voter drive activities and does not refer to 

any Federal candidate or any political party in any of its voter drive 

activities; 

‘‘(III) does not have a candidate for Federal office, an individual who 

holds any Federal office, a national political party, or an agent of any 

of the foregoing, control or materially participate in the direction of the 

organization, solicit contributions to the organization (other than funds 

which are described under clauses (i) and (ii) of section 323(e)(1)(B)), 

or direct disbursements, in whole or in part, by the organization; and 

‘‘(IV) makes no contributions to Federal candidates. 

‘‘(E) CERTAIN REFERENCES TO FEDERAL CANDIDATES NOT TAKEN INTO ACCOUNT.—For purposes of subparagraphs (B)(iii) and (D)(ii)(II), a voter drive activity shall not be treated as referring to a clearly identified Federal candidate 

if the only reference to the candidate in the activity is— 

‘‘(i) a reference in connection with an election for a non-Federal office in 

which such Federal candidate is also a candidate for such non-Federal office; or 

‘‘(ii) a reference to the fact that the candidate has endorsed a non-Federal 

candidate or has taken a position on an applicable State or local issue, including a reference that constitutes the endorsement or position itself. 

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‘‘(F) CERTAIN REFERENCES TO POLITICAL PARTIES NOT TAKEN INTO ACCOUNT.— For purposes of subparagraphs (B)(iii) and (D)(ii)(II), a voter drive activity shall 

not be treated as referring to a political party if the only reference to the party 

in the activity is— 

‘‘(i) a reference for the purpose of identifying a non-Federal candidate; 

‘‘(ii) a reference for the purpose of identifying the entity making the public communication or carrying out the voter drive activity; or 

‘‘(iii) a reference in a manner or context that does not reflect support for 

or opposition to a Federal candidate or candidates and does reflect support 

for or opposition to a State or local candidate or candidates or an applicable 

State or local issue. 

‘‘(G) APPLICABLE STATE OR LOCAL ISSUE.—For purposes of this paragraph, the 

term ‘applicable State or local issue’ means any State or local ballot initiative, 

State or local referendum, State or local constitutional amendment, State or 

local bond issue, or other State or local ballot issue.’’. 

(c) DEFINITION OF VOTER DRIVE ACTIVITY.—Section 301 of such Act (2 U.S.C. 431), 

as amended by subsection (b), is further amended by adding at the end the following 

new paragraph: 

‘‘(28) VOTER DRIVE ACTIVITY.—The term ‘voter drive activity’ means any of the following activities conducted in connection with an election in which a candidate for 

Federal office appears on the ballot (regardless of whether a candidate for State or 

local office also appears on the ballot): 

‘‘(A) Voter registration activity. 

‘‘(B) Voter identification. 

‘‘(C) Get-out-the-vote activity. 

‘‘(D) Generic campaign activity. 

‘‘(E) Any public communication related to activities described in subparagraphs (A) through (D). 

Such term shall not include any activity described in subparagraph (A) or (B) of section 316(b)(2).’’. 

(d) REGULATIONS.—The Federal Election Commission shall promulgate regulations to implement this section not later than 60 days after the date of enactment 

of this Act. 

(e) EFFECTIVE DATE.—The amendments made by this section shall take effect on 

the date which is 60 days after the date of enactment of this Act. 

SEC. 3. RULES FOR ALLOCATION OF EXPENSES BETWEEN FEDERAL AND NON-FEDERAL ACTIVITIES. 

(a) IN GENERAL.—Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 

431 et seq.) is amended by adding at the end the following: 

‘‘SEC. 325. ALLOCATION AND FUNDING RULES FOR CERTAIN EXPENSES RELATING TO FEDERAL AND NON-FEDERAL ACTIVITIES. 

‘‘(a) IN GENERAL.—In the case of any disbursements by any political committee 

that is a separate segregated fund or nonconnected committee for which allocation 

rules are provided under subsection (b)— 

‘‘(1) the disbursements shall be allocated between Federal and non-Federal accounts in accordance with this section and regulations prescribed by the Commission; and 

‘‘(2) in the case of disbursements allocated to non-Federal accounts, may be 

paid only from a qualified non-Federal account. 

‘‘(b) COSTS TO BE ALLOCATED AND ALLOCATION RULES.— 

‘‘(1) IN GENERAL.—Disbursements by any separate segregated fund or nonconnected committee, other than an organization described in section 323(b)(1), for 

any of the following categories of activity shall be allocated as follows: 

‘‘(A) 100 percent of the expenses for public communications or voter drive 

activities that refer to one or more clearly identified Federal candidates, but 

do not refer to any clearly identified non-Federal candidates, shall be paid 

with funds from a Federal account, without regard to whether the communication refers to a political party. 

‘‘(B) At least 50 percent, or a greater percentage if the Commission so determines by regulation, of the expenses for public communications and 

voter drive activities that refer to one or more clearly identified candidates 

for Federal office and one or more clearly identified non-Federal candidates 

shall be paid with funds from a Federal account, without regard to whether 

the communication refers to a political party. 

‘‘(C) At least 50 percent, or a greater percentage if the Commission so determines by regulation, of the expenses for public communications or voter 

drive activities that refer to a political party, but do not refer to any clearly 

identified Federal or non-Federal candidate, shall be paid with funds from 

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a Federal account, except that this paragraph shall not apply to communications or activities that relate exclusively to elections where no candidate for Federal office appears on the ballot. 

‘‘(D) At least 50 percent, or a greater percentage if the Commission so determines by regulation, of the expenses for public communications or voter 

drive activities that refer to a political party and refer to one or more clearly identified non-Federal candidates, but do not refer to any clearly identified Federal candidates, shall be paid with funds from a Federal account, 

except that this paragraph shall not apply to communications or activities 

that relate exclusively to elections where no candidate for Federal office appears on the ballot. 

‘‘(E) Unless otherwise determined by the Commission in its regulations, 

at least 50 percent of any administrative expenses, including rent, utilities, 

office supplies, and salaries not attributable to a clearly identified candidate, shall be paid with funds from a Federal account, except that for a 

separate segregated fund such expenses may be paid instead by its connected organization. 

‘‘(F) At least 50 percent, or a greater percentage if the Commission so determines by regulation, of the direct costs of a fundraising program or 

event, including disbursements for solicitation of funds and for planning 

and administration of actual fundraising events, where Federal and nonFederal funds are collected through such program or event shall be paid 

with funds from a Federal account, except that for a separate segregated 

fund such costs may be paid instead by its connected organization. This 

paragraph shall not apply to any fundraising solicitations or any other activity that constitutes a public communication. 

‘‘(2) CERTAIN REFERENCES TO FEDERAL CANDIDATES NOT TAKEN INTO ACCOUNT.—For purposes of paragraph (1), a public communication or voter drive 

activity shall not be treated as referring to a clearly identified Federal candidate if the only reference to the candidate in the communication or activity 

is— 

‘‘(A) a reference in connection with an election for a non-Federal office in 

which such Federal candidate is also a candidate for such non-Federal office; or 

‘‘(B) a reference to the fact that the candidate has endorsed a non-Federal 

candidate or has taken a position on an applicable State or local issue (as 

defined in section 301(27)(G)), including a reference that constitutes the endorsement or position itself. 

‘‘(3) CERTAIN REFERENCES TO POLITICAL PARTIES NOT TAKEN INTO ACCOUNT.— 

For purposes of paragraph (1), a public communication or voter drive activity 

shall not be treated as referring to a political party if the only reference to the 

party in the communication or activity is— 

‘‘(A) a reference for the purpose of identifying a non-Federal candidate; 

‘‘(B) a reference for the purpose of identifying the entity making the public communication or carrying out the voter drive activity; or 

‘‘(C) a reference in a manner or context that does not reflect support for 

or opposition to a Federal candidate or candidates and does reflect support 

for or opposition to a State or local candidate or candidates or an applicable 

State or local issue. 

‘‘(c) QUALIFIED NON-FEDERAL ACCOUNT.— 

‘‘(1) IN GENERAL.—For purposes of this section, the term ‘qualified non-Federal account’ means an account which consists solely of amounts— 

‘‘(A) that, subject to the limitations of paragraphs (2) and (3), are raised 

by the separate segregated fund or nonconnected committee only from individuals, and 

‘‘(B) with respect to which all requirements of Federal, State, or local law 

(including any law relating to contribution limits) are met. 

‘‘(2) LIMITATION ON INDIVIDUAL DONATIONS.— 

‘‘(A) IN GENERAL.—A separate segregated fund or nonconnected committee may not accept more than $25,000 in funds for its qualified non-Federal account from any one individual in any calendar year. 

‘‘(B) AFFILIATION.—For purposes of this paragraph, all qualified non-Federal accounts of separate segregated funds or nonconnected committees 

which are directly or indirectly established, financed, maintained, or controlled by the same person or persons shall be treated as one account. 

‘‘(3) FUNDRAISING LIMITATION.— 

‘‘(A) IN GENERAL.—No donation to a qualified non-Federal account may be 

solicited, received, directed, transferred, or spent by or in the name of any 

person described in subsection (a) or (e) of section 323. 

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‘‘(B) FUNDS NOT TREATED AS SUBJECT TO ACT.—Except as provided in subsection (a)(2) and this subsection, any funds raised for a qualified non-Federal account in accordance with the requirements of this section shall not 

be considered funds subject to the limitations, prohibitions, and reporting 

requirements of this Act for any purpose (including for purposes of subsection (a) or (e) of section 323 or subsection (d)(1) of this section). 

‘‘(d) DEFINITIONS.— ‘‘(1) FEDERAL ACCOUNT.—The term ‘Federal account’ means an account which 

consists solely of contributions subject to the limitations, prohibitions, and reporting requirements of this Act. Nothing in this section or in section 

323(b)(2)(B)(iii) shall be construed to infer that a limit other than the limit 

under section 315(a)(1)(C) applies to contributions to the account. 

‘‘(2) NONCONNECTED COMMITTEE.—The term ‘nonconnected committee’ shall 

not include a political committee of a political party. 

‘‘(3) VOTER DRIVE ACTIVITY.—The term ‘voter drive activity’ has the meaning 

given such term in section 301(28).’’. 

(b) REPORTING REQUIREMENTS.—Section 304(e) of the Federal Election Campaign 

Act of 1971 (2 U.S.C. 434(e)) is amended— 

(1) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5); and 

(2) by inserting after paragraph (2) the following new paragraph: 

‘‘(3) RECEIPTS AND DISBURSEMENTS FROM QUALIFIED NON-FEDERAL AC- COUNTS.—In addition to any other reporting requirement applicable under this 

Act, a political committee to which section 325(a) applies shall report all receipts and disbursements from a qualified non-Federal account (as defined in 

section 325(c)).’’. 

(c) REGULATIONS.—The Federal Election Commission shall promulgate regulations 

to implement the amendments made by this section not later than 180 days after 

the date of enactment of this Act. 

(d) EFFECTIVE DATE.—The amendments made by this section shall take effect on 

the date which is 180 days after the date of enactment of this Act. 

SEC. 4. CONSTRUCTION. 

No provision of this Act, or amendment made by this Act, shall be construed— 

(1) as approving, ratifying, or endorsing a regulation promulgated by the Federal Election Commission; 

(2) as establishing, modifying, or otherwise affecting the definition of political 

organization for purposes of the Internal Revenue Code of 1986; or 

(3) as affecting the determination of whether a group organized under section 

501(c) of the Internal Revenue Code of 1986 is a political committee under section 301(4) of the Federal Election Campaign Act of 1971. 

SEC. 5. JUDICIAL REVIEW. 

(a) SPECIAL RULES FOR ACTIONS BROUGHT ON CONSTITUTIONAL GROUNDS.—If any 

action is brought for declaratory or injunctive relief to challenge the constitutionality of any provision of this Act or any amendment made by this Act, the following rules shall apply: 

(1) The action shall be filed in the United States District Court for the District of Columbia and shall be heard by a 3-judge court convened pursuant to 

section 2284 of title 28, United States Code. 

(2) A copy of the complaint shall be delivered promptly to the Clerk of the 

House of Representatives and the Secretary of the Senate. 

(3) A final decision in the action shall be reviewable only by appeal directly 

to the Supreme Court of the United States. Such appeal shall be taken by the 

filing of a notice of appeal within 10 days, and the filing of a jurisdictional 

statement within 30 days, of the entry of the final decision. 

(4) It shall be the duty of the United States District Court for the District 

of Columbia and the Supreme Court of the United States to advance on the 

docket and to expedite to the greatest possible extent the disposition of the action and appeal. 

(b) INTERVENTION BY MEMBERS OF CONGRESS.—In any action in which the constitutionality of any provision of this Act or any amendment made by this Act is 

raised (including but not limited to an action described in subsection (a)), any Member of the House of Representatives (including a Delegate or Resident Commissioner 

to Congress) or Senate shall have the right to intervene either in support of or opposition to the position of a party to the case regarding the constitutionality of the 

provision or amendment. To avoid duplication of efforts and reduce the burdens 

placed on the parties to the action, the court in any such action may make such 

orders as it considers necessary, including orders to require intervenors taking similar positions to file joint papers or to be represented by a single attorney at oral 

argument. 

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1The fundraising restrictions in BCRA, of course, extend not only to federal officeholders 

themselves, but also to their agents and to the national party committees. 2MoveOn.org Political Action was formerly known as MoveOn PAC. As a political action committee registered with the FEC, contributions to MoveOn.org Political Action must conform to 

FEC rules regulating political committees. 

(c) CHALLENGE BY MEMBERS OF CONGRESS.—Any Member of Congress may bring 

an action, subject to the special rules described in subsection (a), for declaratory or 

injunctive relief to challenge the constitutionality of any provision of this Act or any 

amendment made by this Act. 

(d) APPLICABILITY.— (1) INITIAL CLAIMS.—With respect to any action initially filed on or before December 31, 2008, the provisions of subsection (a) shall apply with respect to 

each action described in such subsection. 

(2) SUBSEQUENT ACTIONS.—With respect to any action initially filed after December 31, 2008, the provisions of subsection (a) shall not apply to any action 

described in such subsection unless the person filing such action elects such provisions to apply to the action. 

H.R. 513, the ‘‘527 Reform Act of 2005’’ (‘‘the Act’’), was introduced on February 2, 2005 and referred to the Committee on House 

Administration. H.R. 513 amends the Federal Election Campaign 

Act (‘‘FECA’’) of 1971 to clarify when organizations described in 

section 527 of the Internal Revenue Code of 1986 must register as 

political committees. The committee, having considered the Act, 

voted to report it without recommendation 5–3. 

PURPOSE OF THE LEGISLATION

The stated purpose of the Bipartisan Campaign Reform Act of 

2002 (‘‘BCRA’’) was to ‘‘sever the link’’ between federal office holders and large ‘‘soft money’’ donors. The minority members of the 

committee, all of whom voted for BCRA, assert that it has accomplished this goal. The current state of federal campaigns and election activities, however, belie this assertion. Although BCRA prohibits federal officeholders and candidates from directly soliciting 

soft money, the link between soft money organizations established 

under section 527 of the Internal Revenue Code (‘‘527s’’) and federal officeholders, candidates, and top party officials has clearly not 

been severed.1 In fact, the record set forth below demonstrates that 

‘‘independent’’ 527 groups are often intertwined with federal office 

holders and national parties, and that soft money continues to play 

a role in federal elections. H.R. 513 seeks to remedy this situation 

by adding 527 groups to the definition of ‘‘political committee’’ 

under FECA, thus subjecting them to the full panoply of federal 

election law regulations. 

After the passage of BCRA, many groups began to organize 

under section 527 to avoid the restrictions it imposed. Some groups 

organized to benefit Republicans, some to benefit Democrats. 

Though ostensibly ‘‘independent’’, there were numerous connections 

between top party officials and major 527 groups during the 2004 

election cycle. In some cases, there was steady movement of individuals between political campaigns and 527 organizations. A case 

in point is MoveOn.org. Although MoveOn.org describes itself as an 

‘‘independent’’ organization, a closer review reveals its close ties to 

the official party structure. 

MoveOn.org is organized into three separate organizations: 

MoveOn.org Civic Action, a 501(c)(4) organization that focuses on 

issue advocacy; MoveOn.org Political Action 2, a political action 

committee registered with the FEC that works directly to elect 

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3MoveOn.org Voter Fund: Liberal Advocacy Group, The Center for Public Integrity, available 

at http://www.publicintegrity.org/527/search.aspx?act=com&orgid=682 (Jan. 31, 2005). This summary will be included in the appendix to this report. 4For example, Zach Exley transitioned from being the Director of Special Projects for 

MoveOn.org to become the Director of Online Communications and Organization for John 

Kerry’s presidential campaign. Exley also helped Howard Dean set up his web-based organization during the Democratic presidential primary. Campaigns, National Journal, Apr. 8, 2004. 

The entire article will be included in the appendix to this report. Tom Matzzie helped run 

Kerry’s Internet campaign and now works as MoveOn.org’s Washington Director. Ronald 

Brownstein, The Internet and Democrats, The National Journal, Vol. 37, No. 27, July 2, 2005. 

The entire article will be included in the appendix to this report. 5 According to Rep. Nancy Pelosi’s spokeswoman Jennifer Crider. Chris Cillizza, MoveOn Goes 

Mainstream, Roll Call, Apr. 13, 2005. The entire article will be included in the appendix to this 

report. 6 Id. 

7 Ronald Brownstein, The Internet and Democrats, The National Journal, Vol. 37, No. 27, July 

2, 2005. Brownstein, supra note 4. 8 Adam Smith, Unshaven, Unbowed and in Our Face, St. Petersburg Times, Feb. 18, 2005. 

The entire article will be included in the appendix to this report. 9 Cillizza, supra note 5. 

10For example, through MoveOn.org, a U.S. Senator was able to raise $823,000 in 72 hours 

for a colleague. MoveOn Goes Mainstream, Roll Call, Apr. 13, 2005. The entire article will be 

included in the appendix to this report. 

‘‘progressive’’ candidates; and MoveOn.org Voter Fund, an organization constituted under section 527 of the tax code. It is this final 

organization, MoveOn.org Voter Fund, that, as a 527 organization, 

can accept unlimited contributions from individual donors. During 

the 2004 election cycle alone, MoveOn.org Voter Fund raised over 

$12 million in such funds, the majority of which came from three 

individual donors who gave at least $2.5 million each: George 

Soros, Peter Lewis, and Herbert Sandler.3 These multi-million dollar soft money contributions made by wealthy individuals are not 

subject to the type of limits BCRA imposes on other political committees. 

While circumventing BCRA’s regulatory scheme, officials at 

MoveOn interacted with officeholders and federal campaign officials. For example, during the 2004 presidential campaign, top officials for MoveOn worked simultaneously for the John Kerry presidential campaign.4 This interaction between MoveOn and Democratic lawmakers did not end with the conclusion of the presidential campaign. Instead, it has grown considerably. Members of 

Congress are now openly working with MoveOn.org. The House Minority Leader or her staff has ‘‘calls and meetings ‘on a weekly 

basis’ with representatives of MoveOn.’’ 5 Many prominent members of Congress have spoken at MoveOn rallies.6 MoveOn’s Executive Director was recently invited by Senate Democrats to address 

them at a retreat.7 He described MoveOn’s role in working with 

elected leaders: ‘‘We’re acting as kind of an external whip, making 

sure there are rewards for people who are helping move the message and penalties when people go off message.’’ 8 MoveOn’s interaction with Democratic party officials also continues. The Democratic National Committee has praised MoveOn for its efforts, stating that ‘‘[o]bviously they [MoveOn] are relaying the Democratic 

Party message.’’ 9

Interaction with lawmakers and party officials is only one aspect 

of MoveOn’s influence on federal election activity. MoveOn.org has 

also participated in massive fundraising and campaign efforts to 

support or oppose elected officials. The group has organized several 

fundraising campaigns to benefit federal officeholders,10 as well as 

8 

11 In April 2005, MoveOn asked Vermont voters if they would support Rep. Bernie Sanders, 

an independent, if he ran for the Senate. Rep. Sanders’ candidacy is strongly supported by 

Democratic leaders. MoveOn Wants Sanders to Move Up to Senate, Roll Call, Apr. 27, 2005. 

The entire article will be included in the appendix to this report. 12 Brownstein, supra note 7. 13MoveOn.org’s website is currently soliciting contributions for Bill Nelson, Bob Casey, and 

Nick Lampson, who are all candidates for federal office. At https://www.moveonpac.org/give/ 

05.html. 14Quoting Sen. Richard Durbin. Chris Cillizza and Paul Kane, GOP Sees MoveOn as Wedge, 

Roll Call, July 11, 2005. The entire article will be included in the appendix to this report. 15Smith, supra note 8. 16 According to Tom Matzzie, MoveOn.org’s Washington Director. Id. 17 Jim Drinkard, Outside’ Political Groups Full Of Party Insiders, USA Today, June, 28, 2004; 

Lisa Getter, Kerry Aided By ‘Illegal’ Soft Money, GOP Claims, Los Angeles Times, Apr. 1, 2004. 

Articles will be included in the appendix to this report. 

become involved in the Vermont Senate race nominee selection.11

MoveOn admits it plans on ‘‘rewarding’’ politicians who ‘‘say and do 

the right thing’’ with fundraising efforts.12 To that end, MoveOn’s 

website is accepting donations for several ‘‘hot’’ 2006 Congressional 

races against high-profile members of Congress.13 MoveOn’s fundraising efforts are obviously appreciated by lawmakers. The Senate 

Assistant Minority Leader has said that MoveOn is ‘‘one of our 

most important’’ fundraising avenues.14

Further evidence of MoveOn’s influence on federal election activity is the statements of its own members. Officials in the organization have claimed to control the Democratic Party. An e-mail sent 

out earlier this year to MoveOn supporters announced that the 

Democratic Party is now ‘‘[O]ur party: We bought it, we own it and 

we’re going to take it back.’’ 15 MoveOn’s potential influence on the 

2006 Florida governor’s race has been touted by MoveOn representatives, ‘‘MoveOn will be able to ask our members to contribute to 

the Florida governor’s race faster than any organization in the 

United States; literally millions of dollars can come into the Florida 

governor’s race overnight.’’ 16

Unfortunately, the connection between 527 organizations and 

federal candidates does not end with MoveOn. During the mark-up 

of this legislation, the majority members of this committee presented evidence showing that other individuals have played dual 

roles, that is, participating in 527 organizations unconstrained by 

BCRA’s contribution limitations while also working in federal campaigns or for a national party committee.17 Reference to these individuals and organizations is not meant to suggest that they have 

been engaged in illegal coordination in violation of BCRA. Indeed, 

if BCRA had prohibited these activities, no change to the law 

would be necessary. It is precisely because the existing law allows 

for and cannot prevent this sort of shell game that the majority believes changes are necessary. The current law allows for ostensibly 

‘‘independent’’ groups that only employ individuals and support 

candidates of one political party, and exist to support the agenda 

and candidates of that same political party, to evade the limits 

BCRA imposes on other organizations that are similarly engaged in 

federal election activities. 

Had the campaigns these organizations were supporting been 

successful, individuals directly linked to soft money organizations 

would have been rewarded with official positions. This clearly 

would frustrate the purpose of BCRA, which deemed such links between soft money and federal election activities inherently corrupt 

and meant to sever them. By treating 527 organizations like other 

9 

political committees, H.R. 513 will force these organizations to comply with the source limits, prohibitions and disclosure requirements 

of BCRA. 

Clearly, BCRA has failed to get soft money out of politics, and 

has succeeded only in diverting it to other groups. Recognizing this 

failure, the majority of the committee believes the law needs to be 

changed. It previously reported H.R. 1316, not to expand the scope 

of BCRA, but instead to relieve the party committees of some of the 

regulatory constraints that hinder their ability to compete with 

groups operating outside the law. 

It reports H.R. 513 so that the full House may have the opportunity to consider alternative solutions to the obvious problems in 

our current system. 

SUMMARY OF THE LEGISLATION

Section 1.–Short Title: The ‘‘527 Reform Act of 2005’’ 

Section 2.–Treatment of Section 527 Organizations 

• Requires an organization described in Section 527 of the Internal Revenue Code of 1986 (‘‘IRC’’) to register and report with the 

Federal Election Commission (‘‘FEC’’) as a political committee, unless the organization: 

Has annual gross receipts of less than $25,000; 

Is a political committee of a state and/or local party or candidate; 

Exists solely to pay certain administrative expenses of a 

qualified newsletter; 

Is composed exclusively of state and/or local elected officials 

and does not reference federal candidates in its voter drive activities; or 

Is exclusively devoted to elections where no federal candidate 

is on the ballot, to ballot initiatives and referenda, or to the appointment, nomination, or confirmation of individuals to nonelected offices. 

• The exceptions (listed above) will not apply if such organization: 

Transmits a public communication that promotes, supports, 

attacks, or opposes a federal candidate in the year prior to a 

federal election; 

Conducts voter drive activities in more than one state; 

Refers to a federal candidate in its voter drive activities, 

Is controlled by a federal candidate or a national political 

party; or 

Makes contributions to federal candidates. 

• Makes the amendments made by this section effective 60 days 

after their enactment. 

Section 3.—Rules for Allocation of Expenses Between Federal and 

Non-Federal Activities 

• Establishes the following allocation rules: 

100 percent of expenses for public communications or voter 

drive activities that refer to a federal candidate but do not 

refer to a non-federal candidate must be paid for with hard 

money; 

10 

At least 50 percent, or a greater percentage if the FEC so determines by regulation, of expenses for public communications 

or voter drive activities that refer to a federal candidate and 

to a state candidate must be paid for with hard money; 

At least 50 percent, or a greater percentage if the FEC so determines by regulation, of expenses for public communications 

or voter drive activities that refer to a political party but not 

to a federal candidate must be paid for with hard money; 

At least 50 percent, or a greater percentage if the FEC so determines by regulation, of expenses for public communications 

or voter drive activities that refer to a political party and to a 

non-federal candidate but not to a federal candidate must be 

paid for with hard money; 

At least 50 percent, or a greater percentage if the FEC so determines by regulation, of administrative overhead expenses 

must be paid for with hard money; and 

At least 50 percent, or a greater percentage if the FEC so determines by regulation, of direct costs of fundraising program 

that collects both federal and non-federal funds must be paid 

for with hard money. 

• Permits ‘‘qualified’’ non-federal accounts to allocate spending 

with federal accounts, provided the following requirements are observed: 

Such qualified non-federal accounts may not accept more 

than $25,000 from any one individual during a calendar year; 

and 

National political parties and federal candidates are prohibited from soliciting funds for non-federal accounts. 

• Exempts funds raised for a qualified non-federal account from 

the limitations, prohibitions, and reporting requirements of the 

Federal Election Campaign Act (‘‘FECA’’). 

• Requires the reporting of all receipts and disbursements from 

a qualified non-federal account. 

• Requires the FEC to promulgate implementing regulations. 

Section 4.—Construction 

• States that the bill shall not be construed as (i) approving, 

ratifying, or endorsing a regulation promulgated by the FEC, (ii) 

affecting the definition of political organizations in the IRC, or (iii) 

affecting whether a 501(c) organization under the IRC is a political 

committee under the FECA. 

Section 5.—Judicial Review 

• Establishes a special procedure governing any constitutional 

challenges to H.R. 513, which is as follows: 

The action shall be filed in the United States District Court 

for the District of Columbia and shall be heard by a 3-judge 

panel; and 

Any appeal shall be reviewed only by the United States Supreme Court. 

• Allows Members of Congress to intervene in any action 

brought against H.R. 513. 

• Allows Members of Congress to bring an action challenging the 

constitutionality of H.R. 513. 

11 

• Limits the special procedure governing constitutional challenges to action filed on or before December 31, 2008. 

COMMITTEE CONSIDERATION OF THE LEGISLATION

INTRODUCTION AND REFERRAL

On February 2, 2005, Mr. Shays and Mr. Meehan introduced 

H.R. 513, the ‘‘527 Reform Act of 2005,’’ which was referred to the 

Committee on House Administration. 

HEARINGS

The Committee on House Administration held a hearing on H.R. 

513 on April 20, 2005. 

Members present: Mr. Ney, Mr. Ehlers, Mr. Doolittle, Mr. Reynolds, Ms. Miller, Ms. Millender-McDonald, Mr. Brady, and Ms. 

Lofgren. 

Witnesses: The Honorable Christopher Shays, Member of Congress; The Honorable Martin Meehan, Member of Congress; The 

Honorable Mike Pence, Member of Congress; The Honorable Albert 

Wynn, Member of Congress; Cleta Mitchell, Partner, Foley & Lardner LLP; Robert Bauer, Partner, Perkins Coie LLP; and Laurence 

E. Gold, Associate General Counsel, AFL–CIO. 

MARKUP

On June 29, 2005, the Committee met to mark up H.R. 513. The 

Committee reported H.R. 513 without recommendation by a record 

vote (5–3), a quorum being present. 

MATTERS REQUIRED UNDER THE RULES OF THE HOUSE

COMMITTEE RECORD VOTES

Clause 3(b) of House rule XIII requires the results of each record 

vote on an amendment or motion to report, together with the 

names of those voting for and against, to be printed in the committee report. 

Amendment in the nature of a substitute 

Offered by Mr. Ney. The first vote during the markup came on 

the amendment in the nature of a substitute offered by Mr. Ney. 

The amendment sets forth requirements for when organizations 

described in Section 527 of the Internal Revenue Code of 1986 

must register as political committees, and for other purposes. 

The vote on the amendment was 5–3 and the amendment was 

agreed to. 

Member Yes No Present 

Mr. Ney ...................................................................................................................................... X – – 

Mr. Ehlers .................................................................................................................................. X – – 

Mr. Mica .................................................................................................................................... – – – 

Mr. Doolittle .............................................................................................................................. X – – 

Mr. Reynolds ............................................................................................................................. X – – 

Ms. Miller .................................................................................................................................. X – – 

Ms. Millender-McDonald ........................................................................................................... – X – 

Mr. Brady .................................................................................................................................. – X – 

Ms. Lofgren ............................................................................................................................... – X – 

12 

Member Yes No Present 

Total ............................................................................................................................. 5 3 – 

The Committee then voted on H.R. 513, as amended. The vote on 

the bill was 5–3 and the bill was agreed to. 

Member Yes No Present 

Mr. Ney ...................................................................................................................................... X – – 

Mr. Ehlers .................................................................................................................................. X – – 

Mr. Mica .................................................................................................................................... – – – 

Mr. Doolittle .............................................................................................................................. X – – 

Mr. Reynolds ............................................................................................................................. X – – 

Ms. Miller .................................................................................................................................. X – – 

Ms. Millender-McDonald ........................................................................................................... – X – 

Mr. Brady .................................................................................................................................. – X – 

Ms. Lofgren ............................................................................................................................... – X – 

Total ............................................................................................................................. 5 3 – 

The Committee then voted to favorably report H.R. 513, as 

amended. The vote to report favorably was approved by a recorded 

vote (5–3). 

Member Yes No Present 

Mr. Ney ...................................................................................................................................... X – – 

Mr. Ehlers .................................................................................................................................. X – – 

Mr. Mica .................................................................................................................................... – – – 

Mr. Doolittle .............................................................................................................................. X – – 

Mr. Reynolds ............................................................................................................................. X – – 

Ms. Miller .................................................................................................................................. X – – 

Ms. Millender-McDonald ........................................................................................................... – X – 

Mr. Brady .................................................................................................................................. – X – 

Ms. Lofgren ............................................................................................................................... – X – 

Total ............................................................................................................................. 5 3 – 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) rule XIII of the Rules of the 

House of Representatives, the Committee states that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

GENERAL PERFORMANCE GOALS AND OBJECTIVES

The Committee states, with respect to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, that the goal and objective of H.R. 1316 is to restore fairness and balance to the federal 

campaign finance system. 

CONSTITUTIONAL AUTHORITY

In compliance with clause 3(d)(1) of rule XIII, the Committee 

states that Article 1, Section 4 of the U.S. Constitution grants Congress the authority to make laws governing the time, place and 

manner of holding Federal elections. 

13 

FEDERAL MANDATES

The Committee states, with respect to section 423 of the Congressional Budget Act of 1974, that the bill does not include any 

significant Federal mandate. 

PREEMPTION CLARIFICATION

Section 423 of the Congressional Budget Act of 1974 requires the 

report of any committee on a bill or joint resolution to include a 

committee statement on the extent to which the bill or joint resolution is intended to preempt state or local law. The Committee 

states that H.R. 1316 is not intended to preempt any state or local 

law. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, the following estimate and comparison prepared by the Director of the Congressional Budget Office under section 402 of the 

Congressional Budget Act of 1974: 

H.R. 513–527 Reform Act of 2005 

Summary: H.R. 513 would amend the Federal Election Campaign 

Act of 1971. The legislation would require certain political organizations, as defined by section 527 of the tax code, involved in federal election activities to register with the Federal Election Commission (FEC). 

CBO estimates that implementing H.R. 513 would cost about $1 

million in fiscal year 2006, subject to the availability of appropriated funds. In future years, we estimate that the increased costs 

would not be significant. Enacting the bill also could affect federal 

revenues by increasing collections of fines and penalties for violating campaign finance laws, but CBO estimates that any such increase would not be significant. 

H.R. 513 contains no intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA). The bill would specifically exclude state and local elections; therefore, it would impose 

no costs on state, local, or tribal governments. 

H.R. 513 would impose private-sector mandates, as defined in 

UMRA, on certain political organizations. CBO estimates that the 

direct cost of the mandate would be minimal and fall well below 

the annual threshold established in UMRA ($123 million in 2005, 

adjusted annually for inflation). 

Estimated Cost to the Federal Government: The estimated budgetary impact of H.R. 513 is shown in the following table. The costs 

of this legislation fall within budget function 800 (general government). 

By fiscal year, in millions of dollars— 

2006 2007 2008 2009 2010 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION a

Estimated Authorization Level ............................................................ 1 * * * * 

Estimated Outlays ............................................................................... 1 * * * * 

a Enacting the bill could also increase revenues, but CBO estimates any such effects would be less than $500,000 a year. 

Note: * = less than $500,000. 

14 

Basis of estimate: For this estimate, CBO assumes that the bill 

will be enacted near the start of fiscal year 2006 and that spending 

will follow historical patterns for similar programs. 

Based on information from the FEC and subject to the availability of appropriated funds, CBO estimates that implementing 

H.R. 513 would cost the FEC about $1 million in fiscal year 2006. 

This cost covers the one-time computer-related expenses as well as 

writing new regulations to implement the new provisions of the 

legislation. In future years, the legislation would increase general 

administrative and maintenance costs to the FEC, but we estimate 

that those additional costs would not be significant. 

Enacting H.R. 513 would likely increase collections of fines and 

penalties for violations of campaign finance law. Such collections 

are recorded in the budget as revenues. CBO estimates that the additional collections of penalties and fines would not be significant. 

Estimated Impact on State, local, and tribal governments: H.R. 

513 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act. The bill would specifically exclude 

state and local elections; therefore, it would impose no costs on 

state, local, or tribal governments. 

Estimated impact on the private sector: H.R. 513 would impose 

private-sector mandates, as defined in UMRA, on certain political 

organizations. CBO estimates that the direct cost of the mandate 

would be minimal and fall well below the annual threshold established in UMRA ($123 million in 2005, adjusted annually for inflation). 

The bill would change the definition of a political committee to 

include certain 527 organizations, as defined by section 527 of the 

Internal Revenue Code. Those 527 organizations would be required 

to register as political committees with the FEC and comply with 

current regulations on federal campaign finance including certain 

limits on contributions and reporting and disclosure requirements. 

Based on information from the FEC, CBO estimates that the direct 

costs associated with those requirements would be minimal. 

Previous CBO Estimate: On July 6, 2005, CBO transmitted a 

cost estimate for S. 1053, the 527 Reform Act of 2005, as ordered 

reported by the Senate Committee on Rules and Administration on 

April 27, 2005. On June 17, 2005, CBO transmitted a cost estimate 

for H.R. 1316, the 527 Fairness Act of 2005, as ordered reported 

by the House Committee on House Administration on June 8, 2005. 

The three pieces of legislation are similar and would all amend the 

Federal Election Campaign Act of 1971. The estimated federal 

costs are identical. In addition, all of the bills would impose private-sector mandates on certain political organizations with minimal direct cost. S. 1053 would require the television broadcast industry to charge the lowest unit rate to federal candidates and to 

the national committee of a political party with rates based on comparison to the preceding year. H.R. 513 and H.R. 1316 do not contain any mandates on the television broadcast industry. 

Estimate prepared by: Federal costs: Matthew Pickford; Impact 

on State, local, and tribal governments: Sarah Puro; Impact on the 

private-sector: Paige Piper/Bach. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

15 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

FEDERAL ELECTION CAMPAIGN ACT OF 1971 

* * * * * * * 

TITLE III—DISCLOSURE OF FEDERAL CAMPAIGN FUNDS 

DEFINITIONS

SEC. 301. When used in this Act: 

(1) * * * 

* * * * * * * 

(4) The term ‘‘political committee’’ means— 

(A) * * * 

* * * * * * * 

(C) any local committee of a political party which receives 

contributions aggregating in excess of $5,000 during a calendar 

year, or makes payments exempted from the definition of contribution or expenditure as defined in section 301 (8) and (9) 

aggregating in excess of $5,000 during a calendar year, or 

makes contributions aggregating in excess of $1,000 during a 

calendar year or makes expenditures aggregating in excess of 

$1,000 during a calendar yearø.¿; or 

(D) any applicable 527 organization. 

* * * * * * * 

(27) APPLICABLE 527 ORGANIZATION.— (A) IN GENERAL.—For purposes of paragraph (4)(D), the term 

‘‘applicable 527 organization’’ means a committee, club, association, or group of persons that— 

(i) has given notice to the Secretary of the Treasury under 

section 527(i) of the Internal Revenue Code of 1986 that it 

is to be treated as an organization described in section 527 

of such Code; and 

(ii) is not described in subparagraph (B). 

(B) EXCEPTED ORGANIZATIONS.—A committee, club, association, or other group of persons described in this subparagraph 

is— 

(i) an organization described in section 527(i)(5) of the 

Internal Revenue Code of 1986; 

(ii) an organization which is a committee, club, association or other group of persons that is organized, operated, 

and makes disbursements exclusively for paying expenses 

described in the last sentence of section 527(e)(2) of the Internal Revenue Code of 1986 or expenses of a newsletter 

fund described in section 527(g) of such Code; 

(iii) an organization which is a committee, club, association, or other group that consists solely of candidates for 

State or local office, individuals holding State or local ofVerDate Aug 04 2004 21:16 Jul 26, 2005 Jkt 039006 PO 00000 Frm 00015 Fmt 6659 Sfmt 6603 E:\HR\OC\HR181.XXX HR181
16 

fice, or any combination of either, but only if the organization refers only to one or more non-Federal candidates or 

applicable State or local issues in all of its voter drive activities and does not refer to a Federal candidate or a political party in any of its voter drive activities; or 

(iv) an organization described in subparagraph (C). 

(C) APPLICABLE ORGANIZATION.—For purposes of subparagraph (B)(iv), an organization described in this subparagraph 

is a committee, club, association, or other group of persons 

whose election or nomination activities relate exclusively to— 

(i) elections where no candidate for Federal office appears 

on the ballot; or 

(ii) one or more of the following purposes: 

(I) Influencing the selection, nomination, election, or 

appointment of one or more candidates to non-Federal 

offices. 

(II) Influencing one or more applicable State or local 

issues. 

(III) Influencing the selection, appointment, nomination, or confirmation of one or more individuals to nonelected offices. 

(D) EXCLUSIVITY TEST.—A committee, club, association, or 

other group of persons shall not be treated as meeting the exclusivity requirement of subparagraph (C) if it makes disbursements aggregating more than $1,000 for any of the following: 

(i) A public communication that promotes, supports, attacks, or opposes a clearly identified candidate for Federal 

office during the 1-year period ending on the date of the 

general election for the office sought by the clearly identified candidate (or, if a runoff election is held with respect 

to such general election, on the date of the runoff election). 

(ii) Any voter drive activity during a calendar year, except that no disbursements for any voter drive activity shall 

be taken into account under this subparagraph if the committee, club, association, or other group of persons during 

such calendar year— 

(I) makes disbursements for voter drive activities 

with respect to elections in only 1 State and complies 

with all applicable election laws of that State, including laws related to registration and reporting requirements and contribution limitations; 

(II) refers to one or more non-Federal candidates or 

applicable State or local issues in all of its voter drive 

activities and does not refer to any Federal candidate 

or any political party in any of its voter drive activities; 

(III) does not have a candidate for Federal office, an 

individual who holds any Federal office, a national political party, or an agent of any of the foregoing, control or materially participate in the direction of the organization, solicit contributions to the organization 

(other than funds which are described under clauses (i) 

and (ii) of section 323(e)(1)(B)), or direct disbursements, in whole or in part, by the organization; and 

(IV) makes no contributions to Federal candidates. 

17 

(E) CERTAIN REFERENCES TO FEDERAL CANDIDATES NOT

TAKEN INTO ACCOUNT.—For purposes of subparagraphs (B)(iii) 

and (D)(ii)(II), a voter drive activity shall not be treated as referring to a clearly identified Federal candidate if the only reference to the candidate in the activity is— 

(i) a reference in connection with an election for a nonFederal office in which such Federal candidate is also a 

candidate for such non-Federal office; or 

(ii) a reference to the fact that the candidate has endorsed a non-Federal candidate or has taken a position on 

an applicable State or local issue, including a reference 

that constitutes the endorsement or position itself. 

(F) CERTAIN REFERENCES TO POLITICAL PARTIES NOT TAKEN

INTO ACCOUNT.—For purposes of subparagraphs (B)(iii) and 

(D)(ii)(II), a voter drive activity shall not be treated as referring 

to a political party if the only reference to the party in the activity is— 

(i) a reference for the purpose of identifying a non-Federal candidate; 

(ii) a reference for the purpose of identifying the entity 

making the public communication or carrying out the voter 

drive activity; or 

(iii) a reference in a manner or context that does not reflect support for or opposition to a Federal candidate or 

candidates and does reflect support for or opposition to a 

State or local candidate or candidates or an applicable 

State or local issue. 

(G) APPLICABLE STATE OR LOCAL ISSUE.—For purposes of this 

paragraph, the term ‘‘applicable State or local issue’’ means any 

State or local ballot initiative, State or local referendum, State 

or local constitutional amendment, State or local bond issue, or 

other State or local ballot issue. 

(28) VOTER DRIVE ACTIVITY.—The term ‘‘voter drive activity’’ 

means any of the following activities conducted in connection with 

an election in which a candidate for Federal office appears on the 

ballot (regardless of whether a candidate for State or local office 

also appears on the ballot): 

(A) Voter registration activity. 

(B) Voter identification. 

(C) Get-out-the-vote activity. 

(D) Generic campaign activity. 

(E) Any public communication related to activities described 

in subparagraphs (A) through (D). 

Such term shall not include any activity described in subparagraph 

(A) or (B) of section 316(b)(2). 

* * * * * * * 

REPORTS

SEC. 304. (a) * * * 

* * * * * * * 

(e) POLITICAL COMMITTEES.— 

(1) * * * 

* * * * * * * 

18 

(3) RECEIPTS AND DISBURSEMENTS FROM QUALIFIED NON-FEDERAL ACCOUNTS.—In addition to any other reporting requirement applicable under this Act, a political committee to which 

section 325(a) applies shall report all receipts and disbursements from a qualified non-Federal account (as defined in section 325(c)). 

ø(3)¿ (4) ITEMIZATION.—If a political committee has receipts 

or disbursements to which this subsection applies from or to 

any person aggregating in excess of $200 for any calendar year, 

the political committee shall separately itemize its reporting 

for such person in the same manner as required in paragraphs 

(3)(A), (5), and (6) of subsection (b). 

ø(4)¿ (5) REPORTING PERIODS.—Reports required to be filed 

under this subsection shall be filed for the same time periods 

required for political committees under subsection (a)(4)(B). 

* * * * * * * 

SEC. 325. ALLOCATION AND FUNDING RULES FOR CERTAIN EXPENSES 

RELATING TO FEDERAL AND NON-FEDERAL ACTIVITIES. 

(a) IN GENERAL.—In the case of any disbursements by any political committee that is a separate segregated fund or nonconnected 

committee for which allocation rules are provided under subsection 

(b)— 

(1) the disbursements shall be allocated between Federal and 

non-Federal accounts in accordance with this section and regulations prescribed by the Commission; and 

(2) in the case of disbursements allocated to non-Federal accounts, may be paid only from a qualified non-Federal account. 

(b) COSTS TO BE ALLOCATED AND ALLOCATION RULES.— 

(1) IN GENERAL.—Disbursements by any separate segregated 

fund or nonconnected committee, other than an organization described in section 323(b)(1), for any of the following categories 

of activity shall be allocated as follows: 

(A) 100 percent of the expenses for public communications 

or voter drive activities that refer to one or more clearly 

identified Federal candidates, but do not refer to any clearly identified non-Federal candidates, shall be paid with 

funds from a Federal account, without regard to whether 

the communication refers to a political party. 

(B) At least 50 percent, or a greater percentage if the 

Commission so determines by regulation, of the expenses for 

public communications and voter drive activities that refer 

to one or more clearly identified candidates for Federal office and one or more clearly identified non-Federal candidates shall be paid with funds from a Federal account, 

without regard to whether the communication refers to a 

political party. 

(C) At least 50 percent, or a greater percentage if the 

Commission so determines by regulation, of the expenses for 

public communications or voter drive activities that refer to 

a political party, but do not refer to any clearly identified 

Federal or non-Federal candidate, shall be paid with funds 

from a Federal account, except that this paragraph shall 

not apply to communications or activities that relate excluVerDate Aug 04 2004 21:16 Jul 26, 2005 Jkt 039006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6603 E:\HR\OC\HR181.XXX HR181
19 

sively to elections where no candidate for Federal office appears on the ballot. 

(D) At least 50 percent, or a greater percentage if the 

Commission so determines by regulation, of the expenses for 

public communications or voter drive activities that refer to 

a political party and refer to one or more clearly identified 

non-Federal candidates, but do not refer to any clearly 

identified Federal candidates, shall be paid with funds 

from a Federal account, except that this paragraph shall 

not apply to communications or activities that relate exclusively to elections where no candidate for Federal office appears on the ballot. 

(E) Unless otherwise determined by the Commission in 

its regulations, at least 50 percent of any administrative expenses, including rent, utilities, office supplies, and salaries 

not attributable to a clearly identified candidate, shall be 

paid with funds from a Federal account, except that for a 

separate segregated fund such expenses may be paid instead by its connected organization. 

(F) At least 50 percent, or a greater percentage if the 

Commission so determines by regulation, of the direct costs 

of a fundraising program or event, including disbursements 

for solicitation of funds and for planning and administration of actual fundraising events, where Federal and nonFederal funds are collected through such program or event 

shall be paid with funds from a Federal account, except 

that for a separate segregated fund such costs may be paid 

instead by its connected organization. This paragraph shall 

not apply to any fundraising solicitations or any other activity that constitutes a public communication. 

(2) CERTAIN REFERENCES TO FEDERAL CANDIDATES NOT

TAKEN INTO ACCOUNT.—For purposes of paragraph (1), a public 

communication or voter drive activity shall not be treated as referring to a clearly identified Federal candidate if the only reference to the candidate in the communication or activity is— 

(A) a reference in connection with an election for a nonFederal office in which such Federal candidate is also a 

candidate for such non-Federal office; or 

(B) a reference to the fact that the candidate has endorsed a non-Federal candidate or has taken a position on 

an applicable State or local issue (as defined in section 

301(27)(G)), including a reference that constitutes the endorsement or position itself. 

(3) CERTAIN REFERENCES TO POLITICAL PARTIES NOT TAKEN

INTO ACCOUNT.—For purposes of paragraph (1), a public communication or voter drive activity shall not be treated as referring to a political party if the only reference to the party in the 

communication or activity is— 

(A) a reference for the purpose of identifying a non-Federal candidate; 

(B) a reference for the purpose of identifying the entity 

making the public communication or carrying out the voter 

drive activity; or 

(C) a reference in a manner or context that does not reflect support for or opposition to a Federal candidate or 

20 

candidates and does reflect support for or opposition to a 

State or local candidate or candidates or an applicable 

State or local issue. 

(c) QUALIFIED NON-FEDERAL ACCOUNT.— (1) IN GENERAL.—For purposes of this section, the term 

‘‘qualified non-Federal account’’ means an account which consists solely of amounts— 

(A) that, subject to the limitations of paragraphs (2) and 

(3), are raised by the separate segregated fund or nonconnected committee only from individuals, and 

(B) with respect to which all requirements of Federal, 

State, or local law (including any law relating to contribution limits) are met. 

(2) LIMITATION ON INDIVIDUAL DONATIONS.— (A) IN GENERAL.—A separate segregated fund or noncon- nected committee may not accept more than $25,000 in 

funds for its qualified non-Federal account from any one 

individual in any calendar year. 

(B) AFFILIATION.—For purposes of this paragraph, all 

qualified non-Federal accounts of separate segregated funds 

or nonconnected committees which are directly or indirectly 

established, financed, maintained, or controlled by the 

same person or persons shall be treated as one account. 

(3) FUNDRAISING LIMITATION.— (A) IN GENERAL.—No donation to a qualified non-Federal 

account may be solicited, received, directed, transferred, or 

spent by or in the name of any person described in subsection (a) or (e) of section 323. 

(B) FUNDS NOT TREATED AS SUBJECT TO ACT.—Except as 

provided in subsection (a)(2) and this subsection, any funds 

raised for a qualified non-Federal account in accordance 

with the requirements of this section shall not be considered funds subject to the limitations, prohibitions, and reporting requirements of this Act for any purpose (including 

for purposes of subsection (a) or (e) of section 323 or subsection (d)(1) of this section). 

(d) DEFINITIONS.— (1) FEDERAL ACCOUNT.—The term ‘‘Federal account’’ means 

an account which consists solely of contributions subject to the 

limitations, prohibitions, and reporting requirements of this 

Act. Nothing in this section or in section 323(b)(2)(B)(iii) shall 

be construed to infer that a limit other than the limit under section 315(a)(1)(C) applies to contributions to the account. 

(2) NONCONNECTED COMMITTEE.—The term ‘‘nonconnected 

committee’’ shall not include a political committee of a political 

party. 

(3) VOTER DRIVE ACTIVITY.—The term ‘‘voter drive activity’’ 

has the meaning given such term in section 301(28). 

* * * * * * * 

21 


Insert offset folio 26 here hr181.002
(22) 

APPENDIX B 

[From the National Journal’s Technology Daily; Apr. 8, 2004] 

CAMPAIGNS

John Kerry’s presidential campaign has hired Zach Exley, 

MoveOn.org’s director of special projects, to become the campaign’s 

new director of online communications and organizing. The move 

prompted an angry response from the Republican National Committee (RNC), which again raised the question of whether the 

Kerry campaign was coordinating its activities with advocacy 

groups, illegal under current campaign finance laws. The RNC 

issued an alert calling Exley a ‘‘negative campaigner,’’ noting that 

during the 2000 campaign Exley created a satirical anti-Bush Web 

site. It also mentioned a Web ad posted on MoveOn.org’s Web site 

comparing President Bush to Adolf Hitler, and questioned whether 

Exley would keep his distance from MoveOn during the campaign. 

Exley, who worked as an adviser to Vermont Gov. Howard Dean 

during the primary election season, had no comment by press time. 

(23) 

APPENDIX C 

[From the National Journal; July 2, 2005] 

THE INTERNET AND THE DEMOCRATS

(By Ronald Brownstein) 

In retrospect, the day in September 1998 when two wealthy software developers in Berkeley, Calif., posted an online petition opposing the impeachment of Bill Clinton may stand as the day his 

vision for the Democratic Party began to be eclipsed. 

That petition from Wes Boyd and Joan Blades led to the formation of MoveOn.org, which has metamorphosed into the nation’s 

largest and most effective Internet advocacy group. And MoveOn, 

an unstintingly liberal voice, has become the cutting edge of an online revolution that is reshaping the Democratic Party amid the intense political polarization of George W. Bush’s presidency. 

The rise of a mass Democratic Internet fundraising and activist 

base—a trend that includes not only the 3.1 million-member 

MoveOn, but the political organization founded by Howard Dean, 

the Internet contributors to the Democratic National Committee 

and the John Kerry presidential campaign, and the thousands of 

partisans venting daily on left-leaning Web logs like Daily Kos and 

MyDD.com—is beginning to shift the balance of power in the 

Democratic Party away from the ‘‘Third Way’’ moderation that 

Clinton and his ‘‘New Democrat’’ movement promoted. 

Centrist organizations such as the Democratic Leadership Council have produced nothing like the massive lists of activists and donors that liberals have assembled through the Internet. And that 

mass liberal base is pushing the party partly toward more-liberal 

positions, but even more so toward greater confrontation with 

Bush—and increasing pressure on Democrats who consider cooperating with him in any way. 

The Internet base, for the first time, has provided Democrats 

with a tool for raising money, recruiting volunteers, and directing 

messages to their partisans that is comparable to the capacity that 

direct mail and talk radio have long provided Republicans. But just 

as those tools have mostly strengthened the Right in the GOP, the 

Internet has mostly strengthened the wing of the Democratic Party 

that feeds on polarization and conflict. 

Indeed, the Internet is fast becoming the confrontation caucus in 

the Democratic Party. Defiance of Bush is almost instantly rewarded with a torrent of praise on liberal blogs and often with 

fundraising or other assistance from the blogs and groups like 

MoveOn; the group’s PAC, for instance, raised a breathtaking 

$800,000 from its members in less than three days this spring for 

24 

venerable Sen. Robert Byrd, D–W.Va., a vocal opponent of Republican threats to block filibusters of judicial nominations. 

Just as surely, almost all gestures toward collaboration with 

Bush provoke condemnation and outrage. Most often, the criticism 

amounts to angry denunciations on liberal blogs that can generate 

e-mails or unfavorable stories in the mainstream media. Pushing 

further, liberal bloggers have been openly trolling for a Democrat 

to challenge Sen. Joe Lieberman, D–Conn., in a primary next year 

on the grounds that he has supported Bush too often. And MoveOn 

recently targeted House Minority Whip Steny Hoyer, D–Md., with 

negative radio ads because he voted for the Bush-backed bill making it more difficult for consumers to declare bankruptcy. 

The rapidly growing Democratic Internet activist base ‘‘is more 

partisan than ideological,’’ says Howard Wolfson, the former executive director of the Democratic Congressional Campaign Committee. ‘‘And it stems from a feeling in the grassroots that Democrats in Washington were not fighting back hard enough against 

Bush.’’ 

In effect, the rise of the Internet base is now subjecting Democrats to a mass experiment in conditioning behavior—a political 

equivalent of Pavlov’s dogs. ‘‘We are actually starting to build the 

kind of noise machine, to reward or beat up on people, that the 

Right has had for a long time,’’ says Markos Moulitsas Zuniga, 33, 

the pugnacious founder of the popular blog Daily Kos. ‘‘We are 

training these politicians that they don’t have to be afraid of taking 

courageous stands—and that they will be rewarded or punished 

based on their behavior.’’ 

In all of these ways, the Internet base is playing the same role 

in the Democratic Party that conservative economic and social 

groups (like the Club for Growth or Focus on the Family) play in 

the GOP. Both are increasing demands for ideological consistency 

and partisan loyalty. And both are becoming more influential as 

the country grows more deeply polarized over Bush’s aggressively 

conservative agenda, and over the fervent Democratic opposition to 

almost all of it. On each side, polarization is feeding on itself, as 

the widening gulf between the parties strengthens those who argue 

that compromise on almost any issue has become impossible. 

‘‘The leadership of both sides has a gun to their head from the 

activist base,’’ said Dan Gerstein, the former communications director for Lieberman. ‘‘If they don’t hold the line, the trigger is going 

to be pulled against them.’’ 

The Democratic Internet base cradling that trigger does not 

speak with one voice. But the emerging generation of online Democratic activists, many of them young and shaped by the bruising 

partisan conflicts of the past decade, seems united most by the belief that the quickest way for Democrats to regain power is to confront Bush more forcefully and to draw brighter lines of division 

between the Democratic Party and the GOP. 

In strikingly similar language, Internet-generation Democratic 

activists from Moulitsas to Eli Pariser, the 24-year-old executive director of MoveOn’s giant PAC, describe Clinton’s effort to reorient 

the party toward capturing centrist voters as ‘‘obsolete’’ in a highly 

partisan era that demands, above all, united opposition against the 

GOP. Moulitsas and Pariser, like most other voices in the Internet 

25 

activist base, want a Democratic Party focused more on increasing 

turnout among its partisans than on persuading moderate swing 

voters. Both, in other words, want a party that emulates Bush’s political strategy more than Clinton’s. 

‘‘It may be in the 1990s, there was a middle; there isn’t a middle 

now,’’ Pariser says. ‘‘You have a Republican Party that is willing 

to break all the rules and accept no compromises to get what they 

want. In the face of that, saying ‘I’ll meet you halfway’ is as sure 

a recipe for disaster as I know. You have to fight fire with fire.’’ 

Virtually all Democrats, even the most moderate, are growing 

more partisan as the battles with Bush escalate. But many Democratic moderates still fear that, both in substance and style, the 

politics that the Internet base is demanding may be leading the 

party away from the swing voters, especially in the culturally conservative red states it needs to regain Congress and the White 

House. 

‘‘The Internet is certainly a generator of some very positive factors for Democrats. But it’s also a very small slice of our party, and 

if that slice dominates the entire pie, we’re in serious trouble,’’ says 

former Rep. Tim Roemer, D–Ind., a centrist whose bid earlier this 

year for the party chairmanship stalled at the starting gate after 

intense opposition from the Left. 

Yet even while some centrist groups such as the DLC are warning Democrats to distance themselves from liberal Internet-based 

voices like Daily Kos and MoveOn, the party is more overtly pursuing their help in the widening confrontations with Bush. On 

struggles like the fight over judicial nominations, party leaders 

such as Senate Minority Leader Harry Reid of Nevada are now appearing at MoveOn rallies and holding conference calls with liberal 

bloggers. 

Tellingly, even some traditionally centrist Democratic voices are 

wooing the Internet base. Simon Rosenberg, the founder of the New 

Democrat Network, a political action committee for Clintonesque 

New Democrats, courted the Internet activists in his unsuccessful 

bid for the DNC chairmanship earlier this year. Reversing Roemer, 

Rosenberg believes that party moderates must learn from the 

Internet activists’ critique of Clinton’s strategy. 

‘‘The core thing this new Internet culture is looking for is recognition that the highest order of our politics today is stopping 

Bush,’’ Rosenberg says. ‘‘Circumstances have changed [since Clinton’s presidency]. I do believe the New Democrats have been too 

slow to recognize * * * that [the Republicans] must be stopped at 

all costs.’’ 

THEY DON’T NEED THE INTERNET AS MUCH AS WE DO

In the 2004 presidential campaign, the Internet was more visible 

and consequential in American politics than ever before. It became 

a mass medium for obtaining political news. The most comprehensive study [PDF] on the subject, by the nonpartisan Pew Internet 

& American Life Project, found that during the campaign about 63 

million people acquired political news online, nearly double the 

number who did just four years earlier. 

In the physical world and online, the number of people who participate in political activities is much smaller than those who read 

26 

about them. But on the Internet, participation is growing substantially. The Pew study, based on a national post-election survey, estimates that last year 7 million people signed up to receive e-mails 

from the presidential campaigns; 4 million volunteered online for 

the campaigns; and 4 million contributed money to political efforts 

through the Internet. In 2000, only half as many donated online, 

Pew found. 

About the same proportion of Republicans, Democrats, and independents used the Internet to acquire political information in 2004. 

But Pew’s research found that Democrats and liberals pursued political activities over the Internet more frequently than Republicans 

and conservatives did. Democrats were more than twice as likely 

as Republicans to volunteer online, and nearly five times as likely 

to contribute money, according to unpublished data from the study. 

The disparity reflects the relative importance of the Internet in 

each party’s political infrastructure. Republicans have also aggressively increased their capacity on the Internet. The Republican National Committee has a 7.5 million-name activist e-mail list it mobilizes to support administration initiatives. The Bush campaign 

used the Internet to help organize volunteers for its successful getout-the-vote campaign. And conservative blogs have developed 

large followings—as they demonstrated by generating such a rapid 

backlash against recent comments by Sen. Richard Durbin, D–Ill., 

about Guantanamo Bay. 

But the Internet is exerting less influence over the direction of 

the Republican Party than that of the Democratic Party, because 

it plays a much smaller role in the overall GOP political machine. 

Internet fundraising hasn’t been as crucial for Republicans, because they have both a bigger base of financial support in the business community and a more developed small-donor direct-mail program dating back to the 1970s. Blogs aren’t as important for Republicans as they are for Democrats, because talk radio, dominated 

by conservative hosts, already provides the GOP an effective channel outside the mainstream media to distribute its message. ‘‘They 

don’t need the Internet as much as we do,’’ says Wolfson, a top adviser to Sen. Hillary Rodham Clinton, D–N.Y. 

Indeed, Democrats are increasingly relying on the Internet to 

match the roles that both talk radio and direct mail play for Republicans. 

In the same way conservatives court talk radio, Reid, for instance, held a conference call with liberal bloggers in late April to 

press the party message in the battle to preserve the filibuster for 

judicial nominations. Shortly thereafter, MoveOn, by far the largest 

online group in either party, turned out scores of volunteers for 192 

rallies on the issue across the country on the same day. Earlier, the 

group generated 40,000 phone calls in a single day by dispatching 

volunteers with cellphones to ask neighbors to urge their senators 

to oppose the filibuster ban. 

The Internet’s most dramatic contribution to the Democratic 

Party has come on the bottom line. In the Democratic primaries 

last year, the Internet ignited Dean’s insurgent bid by generating 

a flood of small online donations that ultimately provided about 

half of all his money. In the general election, John Kerry stunned 

the political establishment by remaining competitive with Bush in 

27 

fundraising, largely because the Democrat raised $80 million in 

Internet donations for his campaign and another $40 million from 

his online list for the Democratic National Committee. Meanwhile, 

MoveOn says that along with its PAC and its voter fund, it collected another $50 million in online contributions (as well as $10 

million more from large donors such as liberal financier George 

Soros). 

In all, Democrats and their allied groups probably raised about 

$300 million online in 2004, estimates Tom Matzzie, who helped 

run Kerry’s Internet campaign and now works as MoveOn’s Washington director. That means the Internet accounted for about 15 

percent of the $2 billion that the Center for Responsive Politics estimates the Democrats and their allied groups spent in the 2004 

campaign. (Republicans raised about as much overall, but relied on 

the Internet much less; although a comparable estimate for the entire party isn’t available, the Bush campaign raised less than onefifth as much online as Kerry did, which may give a sense of scale.) 

Whatever the exact figure, the amount of political money and activity generated on the Internet in 2004 represented a quantum 

leap over the levels of 2000 or 2002. (MoveOn’s PAC alone increased its online fundraising tenfold from 2000 to 2004.) The audience for blogs, though still small compared with mass media like 

talk radio or daily newspapers, is steadily growing. 

Almost all analysts expect the political use of the Internet to expand at least as much over the next four years. ‘‘It is going to just 

explode between now and 2008,’’ says Joe Trippi, Dean’s 2004 campaign manager. Matzzie said recently that Democratic candidates 

and groups would likely collect as much as $1 billion on the Internet for the 2008 election. Veteran Democratic strategist Tad Devine 

predicts that the next Democratic presidential nominee will reject 

the public financing system, not only for the primary, as Kerry and 

Bush did, but also for the general election (which no candidate has 

ever done) to preserve the freedom to raise unlimited money over 

the Internet. 

These projections are encouraging Democrats about their ability 

to compete financially and organizationally with the GOP. But one 

of the most profound truths in politics is that no money, or any 

other form of support, is free; it all arrives with some kind of price 

tag. Few Democrats have thought seriously about what that price 

tag may be for the lifeline the Internet base is now offering them. 

The Internet activists believe they are liberating the Democrats 

from the demands of ‘‘special interests’’ by creating an alternative 

source of grassroots money. But the Internet support, financial and 

otherwise, comes with its own strong demands, as recent visits to 

two of the movement’s leading figures demonstrated. 

ELI PARISER AND MARKOS MOULITSAS

It speaks volumes about the Internet’s tendency to diffuse power 

that two of the most influential figures in online liberal politics 

work alone, in their homes, in neighborhoods that have hosted far 

more rent parties than black-tie dinners. 

Eli Pariser, the executive director of MoveOn’s giant political action committee, and Markos Moulitsas, the founder and ringmaster 

28 

of the popular Daily Kos Web site, have emerged as two of the 

principal strategists shaping liberal use of the Internet. 

Pariser, working with Boyd and Blades and MoveOn’s small 

group of 13 other employees, runs a vastly larger institution than 

Moulitsas does. MoveOn has become perhaps the largest source of 

funds, volunteers, and activism (such as e-mail and grassroots lobbying campaigns) for Democrats outside of organized labor. 

MoveOn officials believe that their membership, now growing by 

75,000 per month, could reach 5 million by 2006 and perhaps 10 

million by 2008. 

Moulitsas is more like a guerrilla force compared with MoveOn’s 

teeming infantry. He says his site receives 500,000 visits a day, 

more than any other political Web log (although many say figures 

on blog audiences are notoriously fuzzy, and Moulitsas acknowledges no one knows how much of that traffic represents repeat visits from the same readers). He estimates that his site raised about 

$700,000 for candidates in the 2004 election. That’s not bad for 

someone armed with only a laptop, but MoveOn occasionally takes 

in that much in a single day. 

Daily Kos’s real influence is more indirect; it comes from the 

site’s ability to launch ideas through the Democratic universe and 

to some extent the mainstream media, too. Moulitsas thinks of 

himself not as a journalist, but an activist. His principal goal, he 

says, is to provide ‘‘talking points’’ that Democrats around the 

country can use to persuade friends and neighbors, much the way 

conservative talk radio equips millions of Republican listeners 

every day with a common set of arguments and outrages for watercooler conversation. ‘‘I look at this as armies,’’ Moulitsas says. ‘‘It’s 

training our troops how to fight rhetorically.’’ 

Both men emphatically keep their distance from the Democratic 

power structure in Washington. Pariser works out of the apartment 

he shares with his girlfriend on an ungentrified block south of 

Brooklyn’s fashionable Park Slope; within a block of his building 

are shops selling off-price jeans, Mexican and Ecuadoran restaurants, and a pizza place where the crowd of teens hanging out 

one recent sunny afternoon included a young man with a fresh 

shiner under his right eye. Pariser is arguably one of the 50 most 

powerful people in the Democratic Party, and he doesn’t own a car. 

He opens his apartment door wearing a T-shirt that reads, ‘‘I 

[heart] Social Security.’’ 

Moulitsas is a bit more settled. He owns a car (a beat-up Subaru) 

and writes from the house he shares with his wife and infant son 

in a weathered Berkeley neighborhood known as the flats. When he 

moved in, there were crack houses on his street. Often he’ll file his 

first daily posts via his laptop while he’s still in bed. 

The two men share little in personal style. The e-mails from 

Pariser to MoveOn members usually have the earnest and friendly 

tone of a chat at the corner store. The biting exchanges between 

‘‘Kos’’ and the ‘‘kossacks,’’ who post responses to him and to one another on the site, sound more like arguments at the corner bar. 

Pariser almost always considers his words carefully, as if imagining how they would look in print. In person, Moulitsas is soft-spoken, ingratiating, and quick to laugh. But online, he is 

confrontational, impulsive, and unequivocal; the other day, he 

29 

sweepingly dismissed the Democratic Leadership Council, Joe 

Lieberman, and The New Republic magazine as ‘‘tools of the GOP.’’ 

In 2004, Kerry’s campaign cut its link to Moulitsas’s Web site after 

he wrote that he felt ‘‘nothing’’ when four American contractors 

were killed in Falluja, because ‘‘they are there to wage war for 

profit.’’ 

Neither are Pariser and Moulitsas ideological twins. Pariser and 

MoveOn fall in the party mainstream on most domestic issues (the 

group, for instance, has stressed fiscal discipline). But they define 

the Democrats’ left flank on foreign policy. MoveOn as an institution, and especially Pariser as an individual, not only opposed the 

war in Iraq, but resisted military action in Afghanistan. MoveOn 

now is pushing Democrats to demand a deadline for removing 

American troops from Iraq. 

Moulitsas is more eclectic. He served a three-year stint in the 

Army, and although he opposed the Iraq war, he supported the invasion of Afghanistan and calls himself a ‘‘military hawk.’’ His favorite Democrats aren’t Eastern cultural liberals like Kerry, but 

Westerners who combine economic populism with libertarian views 

on social issues like gun control. For the 2008 Democratic presidential nomination, Kos is currently touting Montana’s new governor, Brian Schweitzer, a favorite of both the National Rifle Association and Democrats who yearn for an unabashed populist message. 

The careers of Pariser and Moulitsas have unfolded in contrasting styles as well. Pariser has been a political prodigy, the 

equivalent of a baseball player who makes the major leagues without ever stopping in the minors. The son of 1960s activists who 

founded an alternative high school in Maine, he was a recent college graduate working for a nonprofit in Boston when the terrorist 

attacks of September 11, 2001, shook America. Pariser quickly 

launched a Web site that promoted a petition resisting a military 

response to the attack (he urged ‘‘moderation and restraint’’). Even 

though polls showed that most Americans supported the attack on 

Afghanistan, within two weeks Pariser had collected an astonishing 

500,000 names for the petition. Soon he was receiving calls from 

media outlets as far away as the BBC. ‘‘They said, ‘We’ve been 

hearing a lot about this. Who are you?’ ’’ Pariser later recalled. ‘‘[I 

said] ‘I’m 20 years old; I don’t know who I am.’ ’’ 

Later that fall, Pariser brought his names to MoveOn (doubling 

the e-mail list the group had assembled during Clinton’s impeachment) and joined the group as an organizer. Eventually, he directed 

MoveOn’s campaign against the Iraq war (which virtually doubled 

the size of its e-mail list again). Now, with founders Wes Boyd and 

Joan Blades preferring a less public role, he’s emerged as the 

group’s most visible figure (at a recent MoveOn rally, he was introduced as ‘‘the man whose second home is your in-box’’), and an architect of its efforts to expand beyond cyberspace into on-theground organizing. A few months ago, Senate Democrats invited 

him to address them during a retreat. 

Moulitsas took a more circuitous route to his identity as the 

fierce Kos. He split his youth between Chicago and El Salvador (his 

mother’s native country), where he lived amid a brutal civil war. 

After returning to the Chicago suburbs for a rocky adolescence, he 

30 

enlisted in the Army at 17 and spent two and a half years with 

an artillery unit in Germany. College and law school followed, as 

Moulitsas contemplated careers as diverse as journalism and composing film scores. He was working as a project manager for a 

Web-designing company in San Francisco when he started his blog 

in May 2002, angered by Bush’s direction and inspired by the example of the liberal MyDD Web site. 

After years of uncertainty, he had discovered his niche. Kos 

quickly found an audience by expressing the unmediated anger of 

the Democratic base toward Bush, and even more so toward Democrats who cooperated with him, especially over the war in Iraq. 

Moulitsas shrewdly built a community by providing readers unusual freedom to post their own thoughts, and rose to the forefront 

of political blogs on the same wave of grassroots liberal discontent 

with the Democratic leadership that initially propelled Dean’s presidential campaign. (Kos was one of Dean’s first promoters and consulted for his campaign on Internet strategy.) Moulitsas’s site has 

been so successful (Daily Kos has continued to gain readers even 

since the 2004 election) that it has not only become a full-time job 

but also allowed him to edge into a new role as a media entrepreneur by launching a series of sports blogs. 

IN SEARCH OF A WARRIOR PARTY

For all their differences in style, temperament, and experience, 

Pariser and Moulitsas, in conversations three days apart, demonstrated a series of shared political assumptions that reflect the 

solidifying consensus in the online Democratic community. Each 

man believes that the Democratic Party must change in the same 

way and that the rise of the Internet activist base is the critical 

lever to force that change. In Washington, many Democratic consultants consider the Internet a new source of funding for the party’s familiar approaches and strategies. But Pariser and Moulitsas 

made clear that they, and those they represent, are looking for 

something very different. 

Both men believe that the small-donor base developing on the 

Internet will allow Democrats to reduce their reliance on business 

for campaign financing. That, they argue, would allow the party to 

pursue a much more economically populist anti-corporate message 

that they believe could win back blue-collar voters who have 

trended Republican over the past generation primarily on issues relating to values, taxes, and national security. 

Both say they recognize that Democrats cannot hold together for 

a scorched-earth opposition to Bush on every issue. Neither 

Moulitsas nor MoveOn, for instance, was enthusiastic about the recent Gang of 14 deal on judicial nominations, but both accepted it 

as a necessary tactical retreat that could allow Senate Democrats 

to fight the filibuster issue again, against the backdrop of a Supreme Court nomination. 

But both men want a party of warriors who will link arms to resist Bush’s principal initiatives, especially the restructuring of Social Security. ‘‘When our core values are being attacked,’’ Moulitsas 

argues, ‘‘the party needs to stand together.’’ In the long run, both 

want Democrats to move away from the Clinton model of courting 

swing voters through ‘‘Third Way’’ moderation and turn instead toVerDate Aug 04 2004 21:16 Jul 26, 2005 Jkt 039006 PO 00000 Frm 00030 Fmt 6604 Sfmt 6604 E:\HR\OC\HR181.XXX HR181
31 

ward a Bush approach that tries to build a majority mostly by inspiring a large turnout from its base with an unapologetically polarizing agenda. 

To Moulitsas, the key lesson from 2004 is that Bush won re-election while losing moderates badly and independents narrowly to 

Kerry, according to exit polls. ‘‘We won the center and it wasn’t 

enough,’’ he insists. ‘‘So, clearly, we have to reach out more to our 

base.’’ 

Pariser, similarly, argues that Bush’s re-election victory demonstrated that the ‘‘passion’’ of hard-core followers was ‘‘the most 

powerful political asset around. It was more than money, more 

than message—it’s that [Bush] harnessed that energy. To dismiss 

the energy on our side would be a tremendous mistake.’’ 

The two differ somewhat on the tactical question of how to tilt 

the party in this direction. But the difference is of degree, not kind. 

Moulitsas is heavier on sticks than carrots. His Web site crackles 

with attacks on the Democratic Leadership Council and other party 

centrists, and it actively supports the liberals searching for a candidate to mount a primary challenge next year against Lieberman. 

Moulitsas says he’s not promoting civil war between Democratic 

liberals and moderates. Some Democrats representing conservative 

states, like Nebraska’s Sen. Ben Nelson, need to vote with Bush at 

times, he acknowledges. But, he says, the party shouldn’t tolerate 

defection on its core priorities, Democrats who consistently criticize 

other Democrats, or those from blue states who vote with Bush. 

Those latter two points explain why he’s so eager to challenge 

Lieberman, who has become a target of the Internet activists for 

defending the Iraq war and at times criticizing the Left. A primary 

against Lieberman, says Moulitsas, ‘‘will send a message that behavior that harms the party is going to have repercussions.’’ 

Moulitsas speaks with the abandon of someone who understands 

he is speaking only for himself. Pariser, as the voice of an organization whose size makes it a target both for other Democrats and for 

Republicans like Karl Rove, who denounced it in June, is more cautious, but still ultimately eager to push the party in the same direction that Kos is pushing it. 

In contrast to its earlier emphasis on Iraq, MoveOn this year has 

focused primarily on domestic issues that unify Democrats, like Social Security or the battle against Bush’s judicial appointments. 

Rather than intimidating Democrats who support Bush, Pariser 

says, MoveOn hopes to reward those who confront him, with initiatives like the massive fundraising drive for Byrd. ‘‘We believe it’s 

the role of the progressive movement to create the political space 

where politicians say and do the right thing,’’ Pariser says. 

But MoveOn hasn’t ruled out more-coercive efforts to compel 

party discipline. It turned heads recently when it ran its ads criticizing Rep. Hoyer for supporting the Bush-backed bill toughening 

bankruptcy laws. And while MoveOn, with an eye on 2006, is focusing mostly on strengthening its volunteer organization in congressional districts held by Republicans, Pariser says that it’s maintaining the option of building grassroots organizations to pressure 

Democrats who vote with Bush too often. 

During a several-hour conversation, Pariser frequently said that 

the group had not yet decided to take such pressure to the next, 

32 

far more explosive, step by supporting liberal challengers to Democratic incumbents. But he also repeatedly made clear that the 

group wasn’t closing off the idea. ‘‘That’s a question we are talking 

about now,’’ he said. 

In all of this, Pariser and Moulitsas, like many of those they represent on the Internet, appear very much the product of the Democrats’ fall from power. Almost everyone in the party’s Washington 

hierarchy can remember a time when Democrats thought of themselves as the nation’s natural majority party. Pariser and Moulitsas 

are children of the minority. For Democrats, they believe, the first 

step toward recovery is to acknowledge that revival requires more 

than tinkering. In their eyes, it will require Democrats to think of 

themselves not as a governing, but an opposition, party that 

bloodies the majority Republicans by any means necessary—much 

as Republicans did under Newt Gingrich in the final years of their 

assault against the decades-old Democratic majority in the House 

of Representatives. ‘‘D.C. is still trapped in 1970s thinking,’’ sighs 

Moulitsas. ‘‘It is hard for them to realize we really are a minority 

party. What they have to understand is that Republicans became 

a majority party only by being a really effective opposition party.’’ 

DEMISE OF THE ‘‘THIRD WAY’’ 

One theory of international relations holds that wars most often 

start when a new force emerges to disrupt an established power 

structure, the way, say, Germany did in the early 20th century. 

Much the same dynamic is under way in the Democratic Party 

today. Through Clinton’s two terms, centrists dominated the party. 

Now, largely because of the rise of the Internet activist base, the 

Left is resurgent. And that is heightening tensions. 

For liberals who chafed under Clinton’s reign, the emergence of 

MoveOn, Dean’s Democracy for America, and the blogs is like the 

arrival of the cavalry. Robert Borosage, co-director of the liberal 

Campaign for America’s Future, has been pulling in the tug-of-war 

between Democratic liberals and centrists for more than two decades. He sees the development of the Internet as a decisive tilt in 

that struggle. 

‘‘I think this means, certainly at a presidential level and probably at a senatorial level and maybe at a congressional level, candidates will always know there is a slot on the progressive side of 

the dial that can be competitive financially * * * and they don’t 

have to bow to the large-money interests in the Democratic Party 

in order to be financially competitive,’’ he says. ‘‘Someone will always compete for that slot, and that, I think, transforms elections 

and transforms the opportunity to create the politics that many of 

us have thought is necessary to re-create a progressive majority for 

change—one that has a clear economic message for working people.’’ 

Although liberals like Borosage unreservedly embrace the new 

Internet forces, Democratic centrists have divided over how to respond. The most vehement camp views the Internet Left as a danger. These activists argue that for all of the organizational and 

technological capacity of the Internet activists, they are pushing 

the party toward policies, especially in foreign affairs, that will fatally narrow the Democrats’ support. 

33 

Peter Beinart, the editor of The New Republic, developed this 

case extensively in a controversial cover story last winter when he 

called on Democrats to ‘‘take back’’ the party from MoveOn and the 

Internet Left—what he called ‘‘the softs’’—much the way liberals 

after World War II rejected alliance with domestic Communists. 

Beinart was especially impassioned, but he is hardly alone. The 

DLC promoted his conclusions. And several other centrist party 

strategists worry that the hyperpartisan turn-out-the-base strategy 

that many online activists demand won’t work for Democrats, because polls consistently show that more Americans consider themselves conservative than liberal. 

‘‘We are more of a coalition party than they are,’’ says Ed Kilgore, the policy director for the DLC. ‘‘If we put a gun to 

everybody’s head in the country and make them pick sides, we’re 

not likely to win.’’ 

Simon Rosenberg defines the other pole of the debate among centrists. In May, Rosenberg appointed Moulitsas as a founding adviser to a new think tank, the New Democratic Network, established to craft fresh political strategies for Democrats. Rosenberg 

has not only welcomed the Internet activists, but also argued that 

New Democrats need to learn from their call for a more partisan 

resistance to Bush. 

Strikingly, Rosenberg accepts the Internet Left’s fundamental argument that Democrats should move away from Clinton’s efforts to 

court the middle by finding a Third Way between traditional Democratic and Republican approaches. Such efforts to find compromises 

between the parties, Rosenberg says, have become ‘‘obsolete’’ in the 

face of Bush’s crusading conservatism. 

‘‘As powerful as the Third Way formulation was in the 1990s, it 

is an antiquated way of looking at the world * * * and it is not 

a viable position in the United States right now,’’ Rosenberg says. 

‘‘What people [in the Democratic Party] are looking for is not a 

Third Way; they are looking for a modern progressive movement 

that can fight the conservative movement. [The choice] has become 

binary, and that is what has changed.’’ 

In this dispute, each side can already point to examples of Internet-base influence that support its case. Many give the online activists credit for helping to solidify Democratic opposition to Bush’s 

plan to restructure Social Security—in no small part by so openly 

threatening primary challenges against Democrats, like Lieberman, 

who have considered supporting him. ‘‘It has helped stiffen spines, 

and I think that’s a good thing,’’ said Wolfson. 

Conversely, many centrists believe that the demands of the 

Internet Left influenced John Kerry’s decision in 2003 to vote 

against Bush’s $87 billion request to fund the war in Iraq. That 

vote became an albatross for Kerry in the general election when 

Bush used it as his prime example to accuse the Democrat, who 

had voted to authorize the war, of flip-flopping on issues. MoveOn 

had urged Democrats to oppose the funding, and Kerry cast his 

vote at a moment when Dean’s presidential campaign, fueled largely by the torrent of online donations, was at its zenith. 

Pariser and Moulitsas both say that the problem wasn’t Kerry’s 

vote, but his failure to effectively defend it. But to those who are 

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34 

ing dramatized the potential cost with swing voters for pursuing 

policies meant to energize the Internet base. 

Like many other Democrats who have avoided extreme positions 

in this debate, Wolfson says that the challenge for Democrats is to 

maximize the tangible benefits the Internet provides without losing 

sight of a larger electorate whose views aren’t nearly so fervent. 

‘‘It’s wonderful to have a network of donors through the Internet 

that is the equal of the Republican direct-mail donor base, * * * 

and it is obviously important for Democrats to have a way to talk 

to Democrats,’’ he says. ‘‘The downside is if we have a conversation 

[only] with ourselves. And at this moment, the center of gravity in 

the U.S. is not on the left; it may not even be on the center-left, 

so a conversation geared to the left is, by definition, exclusionary.’’ 

At a time when Internet activists are agitating for challenges to 

party centrists, and liberal blogs are crackling with denunciations 

of legislators who vote with Bush, though, it seems unlikely that 

the party can reap the benefits of the online activists and donors 

without bending toward the confrontational politics they are demanding. ‘‘I don’t think a Democratic politician anymore can poke 

the base in the eye,’’ says Matzzie, MoveOn’s D.C. director. ‘‘They 

can, but only if they are willing to walk away from everything the 

Internet can give them.’’ 

THE ULTIMATE TEST

This isn’t the first time that technological change has triggered 

ideological turmoil. In 1972, the emergence of direct-mail fundraising helped George McGovern overwhelm the party establishment and seize the Democratic presidential nomination on an insurgent anti-war platform. Later in the decade, those same directmail techniques, adapted by conservatives, powered the rise of 

Jesse Helms, the ‘‘New Right’’ advocacy groups, and then Ronald 

Reagan. The spread of talk radio provided a comparable boost for 

the next great wave of conservative advance, the Republican takeover of Congress in 1994. 

The common thread is that each of these new tools proved more 

effective at mobilizing ardent activists than moderate voters. All 

provided new means to concentrate and harvest the emotion of an 

ideological vanguard that cared enough about politics to respond to 

requests for contributions or volunteers or calls to Capitol Hill. In 

that way, each technological advance strengthened the ideological 

edge of the parties against the center, just as the Internet is doing 

in the Democratic Party today. 

But that history also shows that it’s wrong to assume technology 

is destiny in determining a party’s direction. Conservatives, aided 

by the new technologies of direct mail and talk radio, have consolidated their control of the Republican Party over the past three decades. Liberals, until recently, have lost ground in the Democratic 

Party for roughly the same period. The difference is that the Right 

has elected far more of its true believers to office than has the Left. 

McGovern, remember, lost 49 states in the 1972 presidential race; 

Reagan won 49 in 1984. Even today, the share of Republican senators and House members who qualify as hard-core conservatives 

exceeds the share of Democrats who could be identified as die-hard 

liberals. 

35 

This history frames both the opportunity and challenge for the 

reinvigorated Left that is now organizing online. The Internet’s tremendous power to transmute ideological passion into money and 

activism is increasing the Left’s stature inside the Democratic 

Party for the first time since at least Reagan’s 1984 landslide over 

Walter Mondale, and perhaps since the McGovern campaign itself. 

But the Left’s position inevitably will erode again unless the strategy it is promoting wins elections. After all, Dean failed to win a 

single Democratic primary and Kerry lost the general election, despite the unprecedented energy that each man unleashed on the 

Internet. The ultimate test of political success isn’t inspiring passion or even generating volunteers and contributions; it’s attracting 

more votes than the other side. 

Moulitsas, for one, understands that as the influence of the online Democratic activists grows, so does the pressure on them to 

produce results. ‘‘The centrists’ strategy [in the 1990s] didn’t turn 

things around, and the decline for Democrats just kept going,’’ he 

says. ‘‘If we get our way, and we have a more partisan Democrat 

[as the presidential nominee] and the money is there, and in eight 

years we haven’t made any headway, I’m willing to say we should 

try something else.’’ 

(36) 

APPENDIX D 

[From Roll Call; Apr. 13, 2005] 

MOVEON GOES MAINSTREAM

(By Chris Cillizza) 

Once regarded warily by much of the Democratic establishment, 

the liberal grass-roots group MoveOn.org is being increasingly 

courted by Democratic officeholders for its 3 million members—and 

their deep pockets. 

The Web-based advocacy organization, by far the left’s most potent fundraising operation outside of the Democratic Party itself, 

has raised its profile considerably on Capitol Hill in recent months. 

‘‘It’s been an interesting experience for us,’’ said Eli Pariser, the 

executive director of MoveOn.org’s political action committee. ‘‘I 

don’t know to what degree it’s a political move and to what degree 

Democrats understand now it is important to court our constituency.’’ 

Republicans have pounced on the increased cooperation, seeking 

to paint Democrats as beholden to their party’s liberal wing. 

The National Republican Senatorial Committee recently released 

a six-page research document titled ‘‘How Much is that Donkey in 

the Window,’’ filled with positive comments made by Democratic 

leaders regarding MoveOn and highlighting the group’s issue positions. 

Most controversial among them are the organization’s opposition 

to the use of force in Afghanistan following the Sept. 11, 2001, terrorist attacks, and to the war in Iraq. 

‘‘The Democrat Party at an unprecedented level has become best 

friends withMoveOn.org,’’ said NRSC spokesman Brian Nick. ‘‘On 

the major issues, we are [seeing] MoveOn.org is moving in lock 

step’’ with the Democratic Party, he added. 

The most high-profile event illustrating the new synergy between 

MoveOn and Democrats came March 16 with a rally on Capitol 

Hill. 

It drew Senate Minority Leader Harry Reid (Nev.) and Senate 

Minority Whip Dick Durbin (Ill.) as well as Sens. Charles Schumer 

(N.Y.), Robert Byrd (W.Va.), Edward Kennedy (Mass.) and Barbara 

Boxer (Calif.). 

MoveOn followed that event with an e-mailed fundraising plea on 

Byrd’s behalf from Illinois Sen. Barack Obama (D). The message 

raised more than $800,000 for the West Virginia Senator in just 72 

hours. 

(Last October, Obama wrote two fundraising e-mails for MoveOn 

that netted $1.2 million for seven Senate candidates around the 

country.) 

37 

Behind the scenes, the organization has gained considerable entree as well. 

House Minority Leader Nancy Pelosi (Calif.) has worked with 

MoveOn since being elected the top Democrat in the House leadership in late 2002, but the relationship between the two grew closer 

during the fight over adding a prescription drug benefit to Medicare, said spokeswoman Jennifer Crider. 

Crider added that Pelosi or her staff have calls and meetings ‘‘on 

a weekly basis’’ with representatives of MoveOn. 

The Senate Steering and Outreach Committee holds a Monday 

telephone call with roughly 20 outside advocacy organizations 

whenever Congress is in session. MoveOn has been a participant, 

though infrequently, sources said. 

Susan McCue, Reid’s chief of staff, said that MoveOn ‘‘effectively 

represents an important part of our constituency.’’ 

Laura Gross, a spokeswoman for the Democratic National Committee, also praised MoveOn’s efforts. 

‘‘Obviously they are relaying the Democratic Party message, 

which is in line with what the DNC is doing and what the Hill is 

doing as well,’’ said Gross. 

She added that DNC Chairman Howard Dean participated in a 

March 10 conference call with members of the MoveOn PAC. 

Pariser said that while MoveOn’s interests have paralleled those 

of the Democratic Party of late, that will not always be the case. 

‘‘We are not the party, and on issues where we diverge from 

some in the party we are going to’’ make it clear, Pariser promised. 

On Monday, for example, MoveOn sent an e-mail designed to 

raise money for radio ads hitting House Members who support the 

stiffening of bankruptcy regulations—a bill that will be voted on 

this week. 

Its most recent effort notwithstanding, Pariser acknowledged 

that MoveOn’s members recognize that ‘‘we are at a time when the 

Democrats are the only thing standing between Republicans and 

disaster’’ on such issues as Social Security and judicial nominations. 

In recent weeks, MoveOn has aired ads on both issues in targeted districts and on national cable. 

That connection has not gone unnoticed by Republicans who believe that MoveOn’s donations to Democrats—estimated to be in 

the hundreds of millions of dollars—during the 2004 cycle bought 

them a seat at the table with the party. 

Nick and Republican National Committee Deputy Communications Director Tracey Schmitt made reference to an e-mail to 

MoveOn members sent earlier this year by Pariser, in which he 

wrote: ‘‘Now it’s our party: We bought it, we own it and we’re going 

to take it back.’’ 

Schmitt said such a statement ‘‘should trouble the party.’’ 

‘‘After spending millions of dollars to defeat President Bush, they 

are now going after his agenda,’’ Schmitt added. ‘‘They are completely out of touch with mainstream America.’’ 

Pariser dismissed such criticisms as a sign of Republicans’ anxiety over his organization’s activities. 

38 

‘‘Republicans are trying very consistently to wedge between this 

big group of middle-class Americans and the Democratic leadership,’’ he said. ‘‘It’s not working because the charge is baseless.’’ 

Privately, Democratic insiders admit that publicly associating 

with MoveOn does carry potential pitfalls for the party, but they 

argue that the money and grass-roots energy the group can deliver 

make such risks worthwhile. 

Among elected Democratic leaders, there is a ‘‘recognition that 

MoveOn can excite the troops and till the ground to grow more 

Democratic activists in a way that makes any risks associated with 

their activities or their views less important than the rewards we 

can gain,’’ one party strategist said. 

MoveOn ‘‘can be embraced when they need to be embraced and 

you can distance yourself from them when you need to,’’ the source 

added. 

(39) 

APPENDIX E 

[From the St. Petersburg Times; Feb. 18, 2005] 

UNSHAVEN, UNBOWED AND IN OUR FACE

(By Adam C. Smith) 

Tom Matzzie describes himself as a pacifist techno geek. Maybe 

so, but MoveOn.org’s man in Washington sounds like one cocky 

computer nerd. 

Between bites of sushi, Matzzie noted how senior Democratic 

senators eagerly rearrange their schedules to meet with MoveOn. 

And how MoveOn would be comfortable helping defeat Democratic 

Rep. Allen Boyd if the Panhandle congressman continues embracing private accounts for Social Security. 

What’s more, ‘‘We’re going to have to have some discussions with 

Bill Nelson,’’ because Florida’s senior senator appears reluctant to 

block President Bush’s controversial judicial nominations. And the 

centrist Democratic Leadership Council that helped guide Bill Clinton into the White House? So 1990s. 

‘‘The candidates want nothing to do with the DLC, it’s so out of 

vogue,’’ the 29-year-old scoffed. ‘‘If the DLC disappeared from the 

Democratic Party tomorrow, no one would notice. If MoveOn 

weren’t part of the party, people would notice and care.’’ 

Most of the leaders in this new powerhouse in the Democratic 

party establishment are younger than 40, which MoveOn suggests 

makes them better equipped to re-invent politics. They’re known to 

millions of donors by their first names—Tom, Eli, Adam—and tend 

to go for facial hair. 

‘‘A bunch of us have beards,’’ Matzzie chuckled, ‘‘because we’re 

all self-conscious about the whole age thing.’’ 

Having helped revolutionize online organizing and fundraising, 

MoveOn isn’t about to let the Democratic Party forget it. The organization and its legions of Internet-savvy activists are determined 

to have their say, as have labor unions, trial lawyers and other 

longtime Democratic fundraisers. 

‘‘In the last year, grass-roots contributors like us gave more than 

$300-million to the Kerry campaign and the DNC, and proved that 

the Party doesn’t need corporate cash to be competitive,’’ MoveOn’s 

24-year-old executive director said in a recent e-mail urging members to back an outsider for chairman of the Democratic National 

Committee. 

‘‘Now it’s our Party: we bought it, we own it, and we’re going to 

take it back.’’ 

A lot of Democrats are terrified at the prospect. 

Michael Moore shaved and donned a suit to visit with Jay Leno 

after the November election. America Coming Together packed up 

40 

its Palm Pilots and sent its armies of Democratic door-knockers 

back to conventional jobs. Bruce Springsteen and the rest of the 

rockers against Bush stepped off the political stage. 

But MoveOn, after catching its breath, is roaring back into action. 

It launched TV ads blasting Bush’s Social Security proposal. It 

mobilized members to help elect Howard Dean DNC chairman. It’s 

hiring 50 organizers to launch a full-time field organizing program 

in 1,000 communities. 

‘‘MoveOn has always been about building up momentum on issue 

after issue. Now, after admittedly losing a major battle, we’re 

stronger than ever before,’’ said Eli Pariser, executive director of 

the 3.1-million member group. 

The presidential election loss that so devastated countless Democratic activists, Pariser said, only motivated more people to get active. An additional 250,000 people have since joined MoveOn, tens 

of thousands of them apparently in response to the president’s call 

to revamp Social Security. 

In 2004, MoveOn fielded canvassers across Florida and flooded 

the airwaves with anti-Bush TV ads. But after spending $60-million on the last election cycle, its influence could increase dramatically in 2006, an off-year election where energizing the party’s base 

is all the more important. 

‘‘MoveOn will be able to ask our members to contribute to the 

Florida governor’s race faster than any organization in the United 

States,’’ Matzzie said. ‘‘Literally millions of dollars can come into 

the Florida governor’s race overnight.’’ 

MoveOn is at the forefront of a seismic shift in politics, or at 

least Democratic politics. Only a few years ago, the party depended 

mostly on unlimited ‘‘soft money’’ donations from corporations and 

interest groups; many activists saw it disconnected from its grass 

roots base. 

Hokey as it sounds, forces like MoveOn and Howard Deaniacs 

are replacing corporate and soft money-dominated politics with 

real-people politics. 

That might sound like great news for Democrats, but many party 

insiders are groaning over MoveOn’s rising profile. After an election when most of middle America backed Bush, the thinking goes, 

do Democrats really want to emphasize the livid, lefty, antiwar 

wing of the party? 

Peter Beinart, editor of the Democratic-leaning New Republic 

magazine declared MoveOn and Moore the two greatest obstacles 

preventing Democrats from winning majorities. He said they make 

the party seem weak on national security. 

Critics see a massive left-wing Ponzi scheme: MoveOn’s e-mail 

list keeps growing, its fundraising and spending keep soaring, and 

little ultimately gets accomplished. 

‘‘MoveOn’s building up their own brand and they’re building own 

fundraising base—possibly at the expense of the Democratic 

Party,’’ said Marcus Jadotte, a senior Kerry-Edwards campaign adviser. 

‘‘Their involvement with the 2004 election was more focused on 

building affinity with activist Democrats than defeating George 

41 

Bush. They didn’t speak to the middle. They didn’t focus on enhancing the base, they focused on riling up the base.’’ 

The wild-eyed liberal tag really bugs MoveOn’s leaders. If they 

only spoke for people on the fringe, they couldn’t raise so much 

money and wean the Democrats off corporate contributions. 

‘‘MoveOn has taken only positions that have very broad appeal, 

and that’s because our goal is unifying a loyal opposition to the 

Bush administration, which we find very extremist,’’ said Wes 

Boyd, 44, one of MoveOn’s founders. ‘‘Opposition to the Iraq war is 

a very mainstream position.’’ 

MoveOn was created in the late 1990s by Boyd and Joan Blades, 

48, a couple from Berkeley, Calif., formerly best known for the flying toaster screen savers and online game ‘‘You Don’t Know Jack,’’ 

created by their company, Berkeley Systems. 

MoveOn began as a petition to leaders in Washington—as in, 

censure Clinton and move on to more pressing issues—but its email list exploded over opposition to the war in Iraq. 

Now it’s a Democratic institution whose leaders and members 

are unchastened by their loss in November. It wasn’t MoveOn’s 

‘‘liberal’’ TV ads decrying the growing federal deficit and faulty justifications for war that cost Democrats the election, they say. Those 

ads were market-tested for effectiveness at persuading voters, not 

simply preaching to the choir. 

To MoveOn, the lesson of November is not that in-your-face opposition to Bush is damaging to Democrats. Far from it. What hurts 

Democrats most, they say, is lack of coherence and reluctance to 

strong for their beliefs. 

‘‘A lot of party moderates are stuck in an old way of thinking 

about politics, which doesn’t jibe with the power hungry, no-holdsbarred style Bush has brought to Washington,’’ said Pariser, who 

before joining MoveOn had created an online petition urging restraint after the Sept. 11 attacks. 

Even some of the most passionate disciples of online organizing 

sometimes wonder about MoveOn’s strategy. Take their ads targeting Boyd, probably the most vulnerable Democrat in Florida’s 

congressional delegation. 

‘‘They’re going after a Democrat?’’ asked Joe Trippi, Dean’s 

former presidential campaign manager and a pioneer at harnessing 

the Internet for campaigns. 

‘‘I’m not so sure their members would all agree with that. * * * 

The organized party has to be closer to the grass roots, and the 

grass roots over time is going to come to understand that their 

party has to have a big tent. It’s going to be a maturing process, 

and obviously MoveOn is going to be a leader in that.’’ 

Pariser contends that MoveOn’s semi-outsider status makes it 

uniquely suited to help elected leaders in the party. 

‘‘We’re acting as kind of an external whip, making sure there are 

rewards for people who are helping move the message and penalties when people go off message,’’ he said. 

‘‘We’re a team player.’’ 

As congressional Democrats become increasingly aggressive challenging Republicans and MoveOn continues revving up its base, 

though, it’s not clear yet who’s leading the team. 

(42) 

APPENDIX F 

[From Roll Call; Apr. 27, 2005] 

MOVEON WANTS SANDERS TO MOVE UP TO SENATE

As expected, a full 96 percent of MoveOn.org members believe 

the liberal organization should support Rep. Bernie Sanders (I) if 

he decides to seek the Green Mountain State’s open Senate seat 

next year. 

‘‘You’re willing to put your time and money where your mouth 

is, too—thousands of you volunteered to help with the campaign, 

and together you said you’d contribute over $135,000,’’ MoveOn.org 

Political Action Committee Executive Director Eli Pariser said in 

an e-mail to the organization’s supporters. He noted that the show 

of support was just from Vermont members. 

‘‘Since we’re in the middle of our emergency campaign on judicial 

nominations, it may be a few weeks before we’re able to raise 

money for Sanders from our whole base,’’ Pariser said. ‘‘Together, 

we’ll make sure that Vermont sends a real progressive to the Senate in 2006.’’ 

Sanders has not formally entered the race to succeed retiring 

Sen. Jim Jeffords (I) but has made no secret of his desire to ascend 

to the Senate. 

Jeffords decided to retire just last week so no one has entered 

the race yet, save Republican Greg Parke, who was already planning to challenge Jeffords next year. 

Parke was the GOP candidate against Sanders last year in the 

state’s lone House race, and he lost badly. 

(43) 

APPENDIX G 

[From Roll Call; July 11, 2005] 

GOP SEES MOVEON AS WEDGE

(By Chris Cillizza and Paul Kane) 

From top White House operative Karl Rove to two of the party 

campaign committees, Republicans have launched a full-scale attack on MoveOn.org, questioning the liberal group’s patriotism and 

worldview. 

These attacks appear to have two purposes: One is to put the 

group and its Democratic allies on the defensive over support for 

the war on terror. And the second is to drive a wedge between 

Democratic candidates and the millions of dollars that MoveOn’s 

supporters have pumped into their campaigns. 

With MoveOn fast becoming one of the Democratic Party’s most 

important fundraising sources, the second goal may end up being 

the more important one.The 2006 Pennsylvania Senate race provides a window into the developing battle over MoveOn.org. 

State Treasurer Bob Casey Jr. (D) was featured recently in a 

MoveOn e-mail designed to drive donors to support his challenge 

to Sen. Rick Santorum (R). Within the first 24 hours, the appeal 

brought in $150,000 for the Casey campaign. 

But the National Republican Senatorial Committee immediately 

went on the offensive with a release titled, ‘‘Casey Moves In With 

MoveOn,’’ alleging that the group’s e-mail on behalf of Casey shows 

how closely he is aligned with the ‘‘ultra-liberal left.’’ John 

Brabender, Santorum’s media consultant, predicted that if Casey 

continues to accept MoveOn money, he will have to answer for the 

group’s controversial policies, which include opposing military 

intervention in Afghanistan. 

‘‘You can tell a lot about a person by the company they keep,’’ 

Brabender said. A group like MoveOn ‘‘will have a lot of trouble in 

Pennsylvania, particularly in the middle part of the state. The 

group will be hung around Bobby Casey’s neck.’’ 

The rhetoric from Brabender and the NRSC is aimed at forcing 

Casey into a no-win choice: He could pass up a generous source of 

campaign cash, or he could accept MoveOn’s ample resources, yet 

face an assault over the group’s issue stances. 

Refusing MoveOn money is no small financial decision. In less than 48 hours, the group raised $800,000 for the re-election campaign of West Virginia Sen. Robert Byrd (D)—almost singlehandedly quieting rumors that the octogenarian would retire his 

seat in 2006. 

Eli Pariser, executive director of the MoveOn.org political action 

committee, called the Republican tactics ‘‘smart.’’ 

44 

‘‘This is a very pure, very stable source of funds,’’ said Pariser 

about his organization. ‘‘It is totally unlike the rubber chicken 

model of fundraising.’’ 

Leading Senate Democrats agree. ‘‘They are trying to discredit 

and smear MoveOn because it’s so successful,’’ said Minority Whip 

Dick Durbin (D–Ill.), who added that the group is ‘‘one of our most 

important’’ fundraising avenues. 

Democratic Senatorial Campaign Committee Chairman Charles 

Schumer (N.Y.) said MoveOn has grown to be so important because 

the group, through the use of e-mails, has turned grass-roots fundraising upside down. 

Long a bastion of conservatives, direct mail used to be the most costly form of fundraising, barely yielding $1 raised for every $1 

spent but generally bringing in lots of cash and spreading a sharply worded, partisan message in the missives. 

But the costs of MoveOn’s e-mails are negligible, and their haul 

is often astounding, as Byrd discovered at the end of March. 

‘‘Now MoveOn and others have caught up to [conservative direct 

mailers] and surpassed them, and they’re not happy about it,’’ 

Schumer said. 

The campaign against MoveOn moved to a new level with Rove’s 

June 22 speech in midtown Manhattan, not far from the site of the 

World Trade Center attacks. 

Rove accused MoveOn and other liberals of wanting to ‘‘offer 

therapy and understanding for our attackers.’’ Democrats pounced 

on the remarks and demanded an apology from Rove, noting that 

Durbin just the previous day had apologized for likening treatment 

of prisoners at Guantanamo Bay to those in Nazi Germany or in 

Soviet gulags. 

But rather than issuing an emotional apology—as Durbin did— 

the White House and Republicans went into full attack mode on 

MoveOn and other liberals, including Democratic National Committee Chairman Howard Dean. 

The Republican National Committee issued reams and reams of 

documentation on the positions of MoveOn and Dean regarding the 

war in Afghanistan. The White House refused to offer even a hint 

of an apology. And the NRSC sent out a fundraising e-mail 

lambasting MoveOn, beginning with: ‘‘Karl Rove was right.’’ 

And a few days later, when MoveOn’s pitch went out on Casey’s 

behalf, the NRSC again pounced on the group and attacked the 

centrist-leaning candidate for allying himself with a liberal group— 

a line of attack that the committee has used mercilessly against 

Byrd ever since the late March fundraising pitch on his behalf. 

Rep. Tom Reynolds (N.Y.), chairman of the National Republican 

Congressional Committee, said he did not necessarily view the attacks on MoveOn as part of a party-wide effort to drain Democratic 

funding sources. But, he agreed that it has become a major financial engine for Democrats. 

‘‘They certainly have more money there than Howard Dean and 

the DNC,’’ Reynolds said, adding, ‘‘Many of their investors stand 

for extremist views.’’ 

For a campaign expected to cost in the neighborhood of $20 million, Casey may not be in a position to reject MoveOn’s dollars even 

if doing so would save him some political heartburn. 

45 

Jay Reiff, campaign manager for Casey, dismissed the idea that 

his candidate would face any sort of choice. 

‘‘Bob Casey’s positions are not going to change based on who happens to endorse him,’’ said Reiff. ‘‘They endorsed him, he didn’t endorse them.’’ 

In their attacks, Republicans are treading a familiar path. 

For decades, Democratic candidates have come under fire from 

Republicans for accepting campaign contributions from trial lawyers and labor unions. 

The GOP has also targeted both camps legislatively, including 

curbs on class-action lawsuits and attempts to prevent unions from 

using compelled dues for political purposes. Both would effectively 

limit the ability of trial lawyers and unions to aid Democratic 

causes. 

While such arguments have at times caused Democratic candidates some problems, they have rarely if ever driven them to not 

accept donations from these interest groups. (Democrats have also 

attacked Republicans for taking money from social conservatives, 

big corporations and gun-rights groups, but that tactic has not usually been as central to the party’s campaign strategy.) 

Matt Keelen, a former Republican fundraising consultant who’s 

now a lobbyist with Valis and Associates, insists that MoveOn is 

a special case. 

‘‘It is going to take some time, but MoveOn is making it so easy 

with their radical, anti-American stances that, over time, people 

are going to view them as the fringe—to the left of Howard Dean,’’ 

said Keelen. 

Not so, say Durbin and other Democrats. 

‘‘The more they attack them, the more popular they are,’’ Durbin 

said of MoveOn. 

The GOP’s ability to delegitimize MoveOn, to some degree, 

hinges on how the war in Iraq plays out. In recent weeks, support 

for the war has been sinking. 

Rep. Harold Ford Jr. (D–Tenn.), who’s running for the Senate in 

a conservative state by positioning himself as a centrist, said he 

has no problem if MoveOn wants to help him raise cash. 

‘‘MoveOn.org hasn’t placed one road-side bomb in Iraq,’’ Ford 

said. ‘‘Nor did MoveOn.org fail to plan an exit strategy.’’ 

While the group hasn’t yet helped him, Ford said Rove’s attacks 

on MoveOn smacked of ‘‘childish instinct.’’ 

Pariser added that it will be difficult for Republicans to attack 

a candidate for taking contributions from a group ‘‘funded exclusively or largely by grass-roots people in $25 amounts.’’ 

He points out that recent issues MoveOn has highlighted—opposition to Social Security reform and support of an overhaul of the 

campaign finance system—are in tune with a large portion of the 

citizenry. 

‘‘There is no position that the organization as a whole has taken 

that is outside of the mainstream,’’ said Pariser. ‘‘None of those 

things are something that a candidate needs to fear.’’ 

(46) 

APPENDIX H 

[From USA Today; June 28, 2004] 

‘‘OUTSIDE’’ POLITICAL GROUPS FULL OF PARTY INSIDERS

(By Jim Drinkard) 

From his seventh-floor office, Jim Jordan can see the headquarters of the AFL–CIO across the street. It’s a three-minute 

stroll from his office to the headquarters of John Kerry’s presidential campaign, which Jordan ran until last November. 

The room Jordan occupies was the office for Democratic Party 

Chairman Terry McAuliffe last year while the party’s building was 

being renovated. Before that, it was used by Steve Rosenthal, organized labor’s former chief political strategist— and now Jordan’s 

colleague in an enterprise often described as a ‘‘shadow’’ Democratic Party. The shadow party’s office space is subleased from the 

AFL–CIO. 

In that office is the Thunder Road Group, a communications firm 

Jordan runs. Its primary clients are two independent political 

groups, America Coming Together and the Media Fund. 

To Republicans, Jordan epitomizes the web of links and relationships among the Kerry campaign, the Democratic Party, organized 

labor and a network of allied outside political groups. They argue 

that his presence as a strategist for groups that are spending tens 

of millions of dollars to boost Kerry is clear evidence of illegal coordination. 

The law forbids purportedly independent political groups from coordinating their plans and strategies with the party or candidates 

they support. That’s because the outside groups can raise and 

spend unlimited amounts of money, while campaigns and parties 

are strictly limited in the size of contributions they can accept from 

supporters. 

If coordination were allowed, it would mean large, unregulated 

contributions—known as ‘‘soft money’’—could be harnessed by a 

candidate as if they had been given directly to the campaign. As 

the Supreme Court wrote in a campaign-finance ruling last year, 

‘‘expenditures made after a ‘wink or nod’ often will be as useful to 

the candidate as cash.’’ 

APPEARANCE VS. PROOF

But there’s a wide gulf between the appearance of coordination 

and proving it in court, where First Amendment rights to free 

speech provide wide latitude to political activists. Besides, Jordan 

says, there are many legal ways to make sure friendly political 

47 

campaigns complement each other. ‘‘There aren’t many secrets in 

Washington,’’ he says. 

The issue of how much coordination is legal is likely to grow 

along with the proliferation of outside groups. As their numbers 

multiply, so will the amount of money flowing in to influence elections for the White House and Congress. That threatens to blow a 

hole in the campaign-finance law that bans unregulated money 

from being used by parties and candidates, the law’s supporters 

say. 

‘‘The people who are conducting these supposedly independent 

campaigns are people who have been intertwined with Democratic 

and Republican campaigns for years,’’ says Fred Wertheimer, president of the watchdog group Democracy 21. 

Democrats have attracted the most scrutiny because they have 

been the most aggressive in setting up channels for outside money 

to help Kerry or to attack President Bush. The network includes 

more than two dozen outside groups, several of them created in the 

past two years to influence the 2004 elections. 

Many of the groups have drawn their top personnel from the 

AFL–CIO and the Democratic Party. Rosenthal, the labor federation’s former political director, joined Ellen Malcolm, founder of the 

fundraising group EMILY’s List, to form America Coming Together. They get public relations help from Jordan and legal advice 

from Larry Gold, the AFL–CIO’s counsel. That advice, Gold says, 

includes an admonition to avoid any conversations with operatives 

in the party or the campaign, even if they are longtime friends. 

Harold Ickes, a top campaign and White House adviser to Bill 

Clinton, created the Media Fund to advertise on Kerry’s behalf. He 

is raising money jointly with Malcolm and Rosenthal. Ickes is a 

member of the Democratic Party’s executive committee. Ickes’ 

media consultant, Bill Knapp, left the Media Fund last month to 

go to work for Kerry. 

Pollster John Marttila, who does work for the Brady Campaign, 

a gun-control group, and is an adviser to the Kerry campaign, also 

made a presentation on May 20 to America Votes, a forum where 

pro-Democratic groups coordinate their campaign activities. 

Zack Exley joined the Kerry campaign last month as its director 

of online organizing after working in a similar job for the online organization MoveOn.org, which has aired millions of dollars in antiBush ads. He turned in his laptop computer when he made the 

move, but Republican Party Chairman Ed Gillespie complained 

that Exley couldn’t forget what he had learned. ‘‘It’s virtually impossible for him not to violate the law unless he has a lobotomy,’’ 

Gillespie says. 

REPUBLICANS BUILDING OWN NETWORK

The Republicans could be subject to similar complaints, particularly as they seek to form their own network of outside groups. 

Last October, Bush’s campaign manager, Ken Mehlman, gave a 

pep talk to donors of Progress for America, a Republican group 

seeking to match the Democratic efforts. Gillespie also was there. 

The group was founded by Tony Feather, political director of 

Bush’s 2000 campaign, and is closely linked to the DCI Group, a 

48 

voter-contact firm that has contracts with the Bush re-election 

campaign and the Republican Party. 

Another group, the Leadership Forum, recently recruited a stable 

of 35 well-connected Republicans to raise money to help Bush. Most 

of them are Washington lobbyists, and one—former Senate GOP 

aide David Hoppe—now runs Gillespie’s lobbying firm. 

When the Federal Election Commission decided May 13 not to 

regulate outside political groups in this election, senior Republican 

leaders sent strong signals that they expected their party to 

counter the offensive by Democratic-linked groups. 

Gillespie and Bush campaign chairman Marc Racicot issued a 

statement designating Progress for America, the Leadership Forum 

and two other groups as good places for conservative soft-money donors to send their checks. The Leadership Forum is run by Susan 

Hirschmann, a former chief of staff to House Majority Leader Tom 

DeLay of Texas. House Speaker Dennis Hastert of Illinois and 

House GOP campaign chairman Tom Reynolds issued a statement 

saying ‘‘it would not be surprising’’ if new groups sprang up. 

Regulators have long struggled with how to define illegal coordination and how to enforce prohibitions against it. In the 1980s and 

1990s, the Federal Election Commission brought few enforcement 

actions over illegal coordination and won fewer. Coordination, particularly as defined by the courts, became virtually impossible to 

prove. 

When Congress rewrote campaign-finance law in 2002, it directed the FEC to write less-permissive regulations. The result was 

a rule that covers the dissemination of any television, radio, mail 

or telephone message conveyed during a campaign season by an 

outside group—if it mentions a federal candidate, and if its content, 

timing or targeting has been shaped by inside knowledge of the 

candidate’s ‘‘projects, needs and strategies.’’ The value of a message 

coordinated in such a way becomes an illegal contribution to the 

campaign. 

The next frontier for the Democrats is setting up an independent 

arm of the national party to buy TV ads supporting Kerry and perhaps hire field organizers in key states. The party is allowed to 

spend $16.2 million to help Kerry in coordination with his campaign. But if it creates an operation that isn’t coordinated, it can 

spend as much money as it can raise; early estimates run to $25 

million or more. The Republicans are considering a similar arrangement to help Bush. 

Ellen Moran is organizing the independent effort from an office 

in the Democrats’ headquarters. Her resume includes a stint at 

EMILY’s List, which raises campaign money for Democratic women 

who support abortion rights; political work at the AFL–CIO; and 

strategy work for the Democratic Party. 

Party lawyers have built a legal firewall to avoid substantive 

contact between Moran and other party workers. Only McAuliffe, 

chief operating officer Josh Wachs and chief financial officer Brad 

Marshall are allowed access to the operation. Other workers at the 

DNC don’t even know Moran’s phone extension. Wachs says, ‘‘The 

person I talk the most to every day is Joe Sandler’’—the party’s 

lawyer. 

But if history is a guide, he doesn’t have much to worry about. 

49 

‘‘It is clearly difficult to prove coordination,’’ says Trevor Potter, 

a former Republican chairman of the FEC. ‘‘It has always been one 

of the hardest things to prove under election law.’’ 

(50) 

APPENDIX I 

[From the Los Angeles Times; Apr. 1, 2004] 

KERRY AIDED BY ‘‘ILLEGAL’’ SOFT MONEY, GOP CLAIMS

(By Lisa Getter) 

In a complaint to be filed today with the Federal Election Commission, the Bush campaign and the GOP will charge that Sen. 

John F. Kerry is benefiting from ‘‘the largest illegal infusion of soft 

money from wealthy individuals, unions, corporations and other 

special interests’’ since Watergate. 

The GOP alleged Wednesday that Kerry, the presumptive Democratic presidential nominee, was part of an ‘‘unprecedented illegal 

conspiracy’’ to coordinate ads with well-funded liberal groups in 

violation of campaign finance laws—a claim Kerry’s campaign denied. 

At issue is the role of several well-funded liberal groups whose 

stated goal is to raise $300 million to help oust President Bush in 

November. Known as 527s because of the tax code that governs 

them, organizations such as the Media Fund and MoveOn.org have 

been spending millions of dollars on anti-Bush TV ads in key battleground states. 

In an unusual move, the Bush campaign’s national counsel, Ben 

Ginsberg, will ask the FEC to immediately dismiss the complaint 

without hearing its merits, so Republicans can then seek relief in 

federal court. 

The Kerry campaign called the complaint frivolous. ‘‘John Kerry 

and his campaign have nothing to do with these ads or the groups 

that run them,’’ said Michael Meehan, Kerry’s senior campaign advisor. 

FEC commissioners say they are banned from speaking about enforcement actions, so it is unclear what the panel will do. The FEC 

usually takes at least several months to decide complaints, which 

Republicans contend is too long to have any meaningful effect on 

this year’s presidential election. 

The FEC is already in the middle of a lengthy process to impose 

new rules that may affect how the 527s raise and spend their 

money. 

The complaint names six 527s—the Media Fund, America Coming Together, America Votes, Voices for Working Families, 

MoveOn.org and Partnership for America’s Families, as well as 

some of their wealthy donors. Among the donors are philanthropist 

George Soros, who has contributed $5 million; Hollywood producer 

Steven Bing, who has given $2 million; and Cleveland insurance 

billionaire Peter Lewis, who has donated $3 million. 

51 

Campaign finance reform laws have banned such large donations, which are known as soft money, to political parties. But the 

527s are not governed by the same restrictions; the GOP says they 

should be. In their complaint, Republicans contend that because 

the 527s appear to be working with the Kerry campaign, the donations to them are tantamount to illegal soft money contributions to 

Kerry. 

The Bush campaign has a $108-million cash advantage over 

Kerry in collecting so-called hard dollars, according to the latest financial disclosures. But Republicans worry that the influx of advertising money from the 527s may close that gap in a hurry. 

From March 3 through Saturday, the Media Fund spent an estimated $7.3 million and MoveOn.org an additional $3 million on TV 

ads attacking Bush, according to TNSMI/Campaign Media Analysis 

Group, an independent monitor based in Virginia. Its figures are 

derived from analysis of ads on broadcast television in 100 major 

markets and on several national cable outlets. 

Kerry, during that same period, spent about $3 million, according 

to the ad monitor. That brought the anti-Bush spending to within 

range of the Bush campaign, which spent an estimated $16.9 million. 

The spending patterns show the high stakes involved in the FEC 

dispute. ‘‘Simply put, the Kerry campaign and the Democratic 

Party have been unable to fundraise to a level of hard dollars that 

they think is necessary for their campaign efforts,’’ the complaint 

states. ‘‘Instead, they have chosen to rely on an illegal conspiracy 

of donors and shadowy groups to defeat President Bush.’’ 

‘‘These are vintage Republican intimidation tactics,’’ said Sarah 

Leonard, a spokeswoman for America Coming Together, the Media 

Fund and America Votes. ‘‘As usual, this has nothing to do with 

the law, this has nothing to do with the facts, and everything to 

do with political desperation.’’ 

Wes Boyd, president of the MoveOn.org Voter Fund, said the 

complaint was without merit. ‘‘We do not coordinate with the Kerry 

campaign. These charges are baseless and irresponsible,’’ he said. 

Ginsberg contends that the groups are illegally coordinating with 

Kerry because some of the people working with the 527s have links 

to the Democratic National Committee or the candidate’s campaign. 

Among those he mentions: Harold Ickes, who runs the Media 

Fund, also serves on the DNC’s executive committee; Jim Jordan, 

who also works at the Media Fund, was Kerry’s campaign manager 

until November; Minyon Moore, a member of America Coming 

Together’s executive committee, is also a Kerry campaign consultant; and Bill Richardson, an officer in Voices for Working Families, 

is chairman of the Democratic National Convention. 

As proof of coordination, Ginsberg also cited an ad produced by 

the Media Fund on Kerry’s economic policies that arrived at television stations before the candidate had made his plan public. The 

Media Fund said the ad was based on information that had already 

been made public. 

Ginsberg also cited a MoveOn.org party in San Francisco that 

was attended by Kerry’s wife, Teresa Heinz Kerry. The candidate 

52 

called the party as she was speaking. The account, Ginsberg said, 

was posted on Kerry’s campaign website. 

But Bob Bauer, a lawyer for America Coming Together, said 

Ginsberg was misinterpreting the law. He said there was nothing 

in the laws that barred Kerry from socializing with any members 

of the 527s. The question is whether Kerry and his campaign are 

coordinating their strategy with the independent groups, Bauer 

said. 

‘‘Coordination occurs when a candidate provides material information to an organization, the effect of which is to shape the organization’s creation, product or distribution of advertising,’’ he said. 

Bauer dismissed Ginsberg’s contention that a federal ‘‘former employee rule’’ banned Jordan from doing anything for a 527 unless 

he ‘‘put his brain on hold and ran the Xerox machine.’’ 

The 527s say that although some of their staff and volunteers 

have links to the Democratic Party and the Kerry campaign, that 

is not proof of coordination. 

(53) 

MINORITY VIEWS 

The House Administration Committee ordered H.R. 513 reported 

without recommendation on a 5–3 vote. In our view, H.R. 513 is 

a poorly considered response to a problem that is inadequately 

identified. It is so broad in its application that it stands to severely 

hamper voter registration and get-out-the-vote activities of civic 

minded non-partisan organizations. It casts such a wide net that 

it will ensnare groups whose activities Congress should be promoting, not impeding. By failing to distinguish between groups 

whose activities are designed to influence the election of clearly 

identified Federal candidates and those whose sole purpose is to 

enhance participation, H.R. 513 imposes too high a price on election activity. This is particularly true in light of the fact that the 

candidate advertising that the bill seeks to curb will continue. The 

only difference will be that the organizations that place the ads will 

transform themselves into organizations which will be less transparent and accountable than the committees that they supplant. 

Voter participation in 2004 was at its highest level since 1968. H.R. 

513 stands to reverse that gain in voter participation, and for that 

reason and others we outline in these views, we cannot support it. 

PREFACE

Congress in the last five years has increased the regulation of 

independent political committees organized under section 527 of 

the Internal Revenue Code. In 2000, Congress passed legislation 

requiring that all 527s that expect to have gross receipts of over 

$25,000 during a taxable year, register with the Internal Revenue 

Service (IRS) within 24 hours of their formation, unless they are 

already reporting to the Federal Election Commission (FEC). These 

organizations are consequently subject to extensive public disclosure and review requirements. If such an organization seeks to directly influence Federal elections, it is subject to all the limitations 

of the Federal Election Campaign Act (FECA). 

In 2002, Congress passed the Bipartisan Campaign Reform Act 

(BCRA), which was intended to sever the connection between Federal officeholders and the raising of unlimited and unregulated political contributions, often referred to as ‘‘soft money’’. Under 

BCRA, federal officeholders may no longer solicit or participate in 

the spending of soft money. BCRA has been successful in achieving 

this end. The link has been broken between Federal candidates and 

the parties they control, and the perceived influence of soft money 

on the creation and application of Federal policy. 

After BCRA was challenged, the Supreme Court upheld the main 

provisions of the law, clearly demonstrating that it is constitutionally permissible to regulate or limit the money which Federal 

office holders, Federal candidates, and their national political parVerDate Aug 04 2004 21:16 Jul 26, 2005 Jkt 039006 PO 00000 Frm 00053 Fmt 6604 Sfmt 6604 E:\HR\OC\HR181.XXX HR181
54 

ties raise. The Court was hesitant to endorse the imposition of the 

same restrictions on independent political organizations. 

The Court addressed independent groups’ ability to exercise their 

rights under BCRA in 2003 by holding that: 

* * * BCRA imposes numerous restrictions on the fundraising abilities of political parties, of which the softmoney ban is only the most prominent. Interest groups, 

however, remain free to raise soft money to fund voter registration, GOTV {Get-Out-The-Vote} activities, mailings, 

and broadcast advertising (other than electioneering communications). McConnell v. Federal Election Commission, 

540 U.S. at 80, {bracketed words added}. 

The Court even weighed in on those who state that these independent groups are stronger than the parties: 

* * * Interest groups do not select slates of candidates 

for elections. Interest groups do not determine who will 

serve on legislative committees, elect congressional leadership, or organize legislative caucuses. Political parties 

have influence and power in the legislature that vastly exceeds that of any interest group. Id., at 81. 

To prevent the circumvention of existing law, in January of this 

year, the FEC implemented new rules to ensure that organizations 

that raise and spend money expressly to influence federal elections 

will be required to register and file reports with the Commission. 

Additionally, these organizations must pay for activity that is intended to influence federal elections with money under the limitations and prohibitions of the BCRA. Under the new regulations, 

funds received in response to a communication that indicates any 

portion of the funds will be used to support or oppose the election 

of a clearly identified federal candidate, will be considered contributions to the person making the communication. The consequence of this is that any organization whose major purpose of 

which is to influence federal elections will be subject to all the requirements of FECA once it receives over $1,000 during a calendar 

year. 

Under the new rule, organizations that have established political 

committee status will be required to fund their activities in federal 

elections with specific percentages of hard and soft dollars. For example, voter drives that refer to both federal and nonfederal candidates must be paid with at least 50% hard dollars. In contrast, 

public communications that refer only to federal candidates must 

be paid for with 100% hard dollars. Under the FECA, hard dollars 

must comply with the source prohibitions, and therefore donations 

to them would be limited to $5,000 per individual. Congress should 

carefully measure the effectiveness of these regulations before 

rushing through a bill which is unlikely to achieve its sponsors’ objectives, but is likely to result in unintended and undesirable consequences. 

Some have accused these independent groups as being mere 

‘‘fronts’’ for a party. This was the impression given during the June 

29th, 2005 mark-up of H.R. 513, when several former political 

party employee pictures were displayed without any prior notice to 

55 

the minority side, in what Roll Call newspaper termed ‘‘mug-shot’’ 

style on the Committee’s large screen monitors. If the independent 

groups for whom they subsequently worked are shown to be anything other than independent, these groups will face substantial 

penalties from either or both the Internal Revenue Service or the 

FEC. If anyone has hard evidence that office holders have had direct coordination with 527 groups, it should be presented to the appropriate authorities. The majority party should not impugn the integrity and honesty of individuals based on raw unfounded speculation. 

PRINCIPAL FLAWS

RESTRICTS UNIONS AND INDEPENDENT GROUPS FROM ACTIVITIES

WHILE ALLOWING CORPORATIONS AND TRADE ASSOCIATIONS TO

CONTINUE UNREGULATED SPENDING

H.R. 513 imposes further regulation of unions and independent 

527s, and provides an unfair advantage to corporations and trade 

associations. This is done by allowing corporations and trade associations to continue spending unlimited and undisclosed amounts of 

money for political purposes, skewing the playing field in favor of 

corporations and trade associations, while labor organizations and 

membership groups will be forced to do most of their political 

spending as federal political committees, subject to contribution 

limitations and source restrictions. 

TURNS BACK HIGHEST VOTER PARTICIPATION GAINS OVER LAST 35

YEARS

H.R. 513 would restrict many 527 organizations that played a 

critical role in increasing civic participation by registering, educating, and mobilizing millions of voters for the 2004 November 

general election. Voter turnout reached unprecedented highs as 

nearly 126 million voters participated in the 2004 elections. An estimated 15 million additional voters participated in the 2004 election over the November, 2000 election. Many were previously unregistered or disengaged, and they have now reengaged in the political process. Congress should be encouraging and supporting this 

kind of increase in voter participation, rather than obstructing it. 

VIOLATES 1ST AMENDMENT AND FORCES GROUPS TO MORPH INTO LESS

ACCOUNTABLE FORMS

H.R. 513 is unduly vague and stands to chill speech not directed 

at any election. Speech criticizing an officeholder’s position on an 

issue a year before an election may trigger regulation. Once regulation is triggered, an organization will have all its activities limited 

by the prohibitions and limitations that are intended only to apply 

to political committees seeking to influence federal elections. It is 

unclear how an organization will be able to free itself from these 

limitations on its speech. 

One choice may be for such an organization to forego 527 status 

from the start. If operating as a 527 organization limits an organization’s ability to publicly debate issues of importance, then an organization simply may choose a different operating structure and 

avoid regulation altogether. H.R. 513 will then have accomplished 

56 

nothing other than to ensnare the unwary, while driving the election activity which it intends to regulate into unregulated channels. 

CONCLUSION

We have attached letters from concerned groups on the impact 

this legislation may have on their civic activities. We have also included several charts which show the increase in voter turnout between 1996–2004, an increase attributable in large measure to the 

efforts of 527 organizations in registering and mobilizing voters. 

Because we are doubtful that H.R. 513 has any chance to achieve 

its objectives, and because we believe that it will have a negative 

impact on voter participation, we opposed the bill in committee and 

expect to oppose it on the Floor. 

JUANITA MILLENDER-MCDONALD. 

ROBERT A. BRADY. 

ZOE LOFGREN. 

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