Misha Japaridze  /  AP file
Financier George Soros has given more than $6.5 million to Democratic groups working to defeat President Bush.
By Tom Curry National affairs writer
updated 3/10/2004 2:00:21 PM ET 2004-03-10T19:00:21

Sen. John McCain threatened Wednesday to go to court to force the Federal Election Commission to crack down on mostly Democratic fund-raising groups called “527s,” which he said are circumventing campaign finance laws by using massive “soft money” contributions to run TV ads attacking President Bush.

One of those Democratic groups, the Media Fund, financed in part by billionaire George Soros and headed by former Clinton White House aide Harold Ickes, began airing a $5 million wave of anti-Bush television ads in 17 states Wednesday.

The six-member, bipartisan Federal Election Commission is scheduled to vote on May 13 on new regulations to restrict fund-raising by the 527 groups, which are named because they are organized under section 527 of the Internal Revenue Code.

At a hearing Wednesday of the Senate Rules Committee to debate the role of the 527 groups, McCain, a Republican from Arizona who co-authored the 2002 campaign finance reform law that bears his name, voiced anger at what he said was a clear undermining of the original 1974 campaign finance law.

In his testimony, McCain twice threatened to go to court to force the FEC to crack down on 527 groups.

With the unlimited “soft money” contributions to national political parties ostensibly banned by the 2002 Bipartisan Campaign Reform Act (BCRA, also known as the McCain-Feingold law), Democrats are counting on the 527 groups, bankrolled by Soros, Real Networks CEO Robert Glaser, labor unions, and others, to mobilize voters.

If Congress allows the 527 groups “to function outside the campaign finance law of 1974, then I think we will be opening the door to a flood of unregulated soft money and we will have a return to the bad old days,” McCain said.

“As my 15-year old son would say, ‘Duh!’ — they’re engaged in partisan political activities so therefore they should be regulated,” McCain said.

“These groups should not be permitted to shirk their obligations, including those under the campaign finance laws,” he said.

If the FEC decided the 527 groups were political committees, then instead of taking $5 million in contributions from Soros and others, they’d be limited to accepting $5,000 contributions from individuals. Corporate and labor union contributions would not be permitted.

The Arizona Republican also denounced FEC Vice Chairwoman Ellen Weintraub, a Democrat, who has voiced opposition to imposing new regulations on the 527 groups before the Nov. 2 election. Weintraub says regulators should not “rush to make hasty decisions.”

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Sen. Russ Feingold, D-Wisc., McCain’s partner in designing the campaign finance law, also testified before committee, criticizing the 527 groups and saying the FEC must not allow the law to be circumvented.

Skeptical FEC chairman
In comments to reporters after the Senate hearing, FEC Chairman Bradley Smith, who was appointed to the commission by President Clinton at the behest of Republicans, voiced skepticism about McCain’s and Feingold's view that the 527s are acting in violation of the law.

Video: GOP says anti-Bush ad violates spending law And Smith added, “even if we (the FEC) were to rope in these groups, nothing would stop George Soros from just hiring Harold Ickes and doing the exact same thing. He (Soros) would not be a political committee, he would just be a really rich guy hiring people directly to do this.”

The conventional wisdom is that Democratic presidential candidate Sen. John Kerry starts his campaign to unseat Bush at a massive financial disadvantage.

As of Jan. 31, the Bush campaign had $104 million in cash on hand, more than 50 times as much as the Kerry campaign had.

But if the 527s do their job, Kerry will be on equal footing or better with Bush on the financial playing field. The 527 groups’ Bush-bashing TV ads, as well as their voter identification and mobilization efforts, will do much of the heavy lifting for Kerry in the period between now and the Democratic National Convention, which begins on July 26.

The most prominent Democratic 527 is America Coming Together which plans to spend $95 million in the 2004 campaign.

Last year ACT raised more than $12.5 million, with $5 million of that coming from Soros, who said last year that Bush’s rhetoric reminded him of the Germans during the Hitler era. “My experiences under Nazi and Soviet rule have sensitized me,” Soros told the Washington Post.

ACT’s founders and officers include Carl Pope, the executive director of the Sierra Club, and former Clinton administration official Steve Rosenthal, who served as political director of the AFL-CIO from 1996 until 2002.

Working to beat Bush
In its campaign manifesto, ACT vows that it will inform voters about “the extremist positions of the Bush Republican agenda…. We will find the exact voters who believe in change but don’t vote, in key counties, key precincts, and key neighborhoods and we will bring the issues right to their front doors.”

ACT will work primarily through phone, mail and door-to-door voter recruitment and mobilization.

The Center for Responsive Politics and two other campaign finance watchdogs, Democracy 21 and the Campaign Legal Center, have also urged the FEC to quickly issue new rules which would crack down on the 527s.

“These 527 groups have said that their purpose is to defeat George Bush,” Center for Responsive Politics executive director Larry Noble said Tuesday. “Our answer is that they are political committees in which case they are working under the broader legal standard of ‘promoting, supporting attacking or opposing’ a candidate. Therefore the ads have to be paid for with ‘hard’ money – which is limited to $5,000 per donor per election and can not be corporate or labor union money.”

ACT’s spokesman Jim Jordan told MSNBC.com Tuesday that no new FEC restrictions are warranted.

“Congress recently engaged in a significant rewriting of the campaign finance laws,” Jordan noted, “Congress consciously decided not to impose even broader restrictions on independent political organizations. It was not the purpose of BCRA to chill public debate in issue that matter.”

According to the watchdog groups, there is a “fundamental flaw” in existing FEC regulations “that currently licenses a blatant charade. Simply put, the existing regulations completely fail to protect against the improper flow of soft money into federal elections through partisan voter mobilization activities of section 527 groups.”

“We vehemently disagree with that,” Jordan said. “We are behaving in an entirely appropriate legal and traditional manner.”

Kerry's view in 2002
The McCain-Feingold law was supposed to once and for all stop the use of multimillion dollar “soft money” contributions by wealthy individuals, corporations, and labor unions, to political campaigns.

As the Senate was voting on the McCain-Feingold law, Democratic senators voiced high hopes for a new era of reform. Congress needed to act, Democrats said, because big money was corrupting the political process.

“The American people have become almost numb to these kinds of staggering figures, and they have come to expect fund-raising records to be broken with each election cycle,” Kerry himself said on March 22, 20002 during the debate over McCain-Feingold. “And, what is far worse for our democracy is that the public also believes that this money buys access and influence that average citizens don't have....We can't go on leaving our citizens with the impression that the only kind of influence left in American politics is the kind you wield with a checkbook.”

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