Press Conference in 527 Reform Act
Interview
Press Conference in 527 Reform Act
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SEN. MCCAIN: Did a great job. I'd just like to make a couple of additional comments. And in particular, I want to thank Senator Lott and Senator Schumer.
It's unfortunate that we're having to even introduce this bill today because the 527s are not in violation of BCRA, they're in violation of the 1974 law, which clearly states that any organization that engages in partisan political activity for the purposes of determining -- of affecting the outcome of an election falls under campaign finance laws. They are very clear.
What we're talking about here is a failure of the Federal Elections Commission.
I'm happy that the president of the United States wants this fixed; the Republican National Committee; Chuck Schumer in his capacity, as he just mentioned, as chairman of the Democratic Senatorial Campaign Committee. Well why is it that every federally elected official should be concerned about the 527s? We saw -- and I want to repeat again what Russ said -- $423 million were spent by 527s. As interesting, $4 million -- 10 people gave $4 million, and two donors each contributed over $20 million.
Suppose that you are a congressman or a senator. You are restricted by campaign finance contributions. Some billionaire decided he or she doesn't like you in office, and they decide to form up a 527 and contribute $10 million, $20 million and dive bomb into your state or district. That should alarm every federally elected member of Congress.
So this is a very important issue. We'll win in court. We'll win over time. But the tragedy of all this really is that the Federal Elections Commission has failed to do their duty. We are going to have to reform the commission.
A lot of -- it passed largely unnoticed that a federal judge threw out 13 of the 15 regulations that the Federal Election Commission had issued to implement BCRA. Thirteen of the 15, with the most scathing kind of denunciation. This is a corrupt organization, and I don't use the word lightly. We need to reform the Federal Election Commission. And in the meantime we will move legislatively and legally, with the support of the president of the United States, the Republican National Committee, new senators like Senator Salazar, who just went through a very bruising campaign, and I believe we will prevail sooner rather than later.
Did we expect when we passed campaign finance reform that there would be this kind of loophole exploited? I have to tell you, we were a bit naive. We were a big naive in the fact that we expected the Federal Election Commission not to continue to try to carve out loopholes and might enforce the law. We know better now. But I'd also want to point out, as Marty did, during this last campaign we saw a dramatic drop in corporate soft money, union soft money and other contributions, which I think meant that the law was working very well with the exception -- and it is a big exception -- of the 527s.
Could we respond to any questions or comments, if you don't --
Sir?
Q Can you talk about the timing legislatively as opposed to the election cycle clock that's now running on the next election, when you would need to act in order to have --
SEN. MCCAIN: This year. This year. I think clearly we would need to act this year, don't you think, Chris?
Sir?
Q In fact, is that likely in the Senate --
SEN. MCCAIN: Well, if you have a hearing on March 8th and they mark up a bill and report it out of their committee, I don't -- you know, then it's just a matter of getting it on the calendar.
Marty and Chris can talk about -- more about what the House might do. I don't --
REP. SHAYS: I didn't go over this bill particularly with the speaker, but in past discussions he was very adamant that we needed to deal with the 527 problem, and I know the White House wants to. So my anticipation is that it will be done this year and done on a bipartisan basis.
Q Do you expect Speaker Hastert to support the bill?
REP. SHAYS: I expect that we will deal with this issue. Whether it's this bill with Marty's and my name on it or another bill, I -- but I think, in effect, it will be the same.
Q Why aren't you trying to go a little further in terms of restricting 527s, sort of when they can spend money or banning them outright? This seems like a pretty minor change.
SEN. MCCAIN: Well, I don't think it's minor. It places them under the same contribution restrictions that any other organization is. And I mean, if somebody gave 10 million (dollars), they're now down to 5,000 (dollars) or 25,000 (dollars) in the case -- and once a year. So I think it's pretty Draconian.
You want to --
SEN. FEINGOLD: And actually, all it is, is going back to the 1974 law's scheme, which is that entities can create political committees, as long as they play by the rules. This is simply putting the genie back in the bottle of the way things were supposed to work. So I don't -- the goal here isn't to prohibit groups from exercising their rights to be involved in campaigns, but it's according to the scheme of the 1974 law.
Q Is there any -- (off mike) -- that by further restricting 527s -- (off mike) -- 501(c) organizations -- (off mike)?
SEN. MCCAIN: We did not address the 501(c) issue, because the 501(c)s, by definition, are not engaged in partisan political activity in order to affect the outcome of election. As soon as they are, they fall under the '74 law. They can call themselves 501s, 999s, 205s, whatever they want to, but no matter what their label is or where they fall in the tax code, if they engage in partisan political activities, then they -- for the purposes of affecting the outcome of an election, then they fall under campaign finance laws.
The overwhelming majority of 501(c)(3)s are advocacy organizations for different causes, and that's fine. I mean, that's what our system should be all about. Organizations should form up, raise money and advocate and achieve the goals -- whatever goals they seek. But there's a dramatic difference between that and somebody who engages in the partisan political activity.
SEN. SCHUMER: Just one point with all this. What we're trying to do here is continue the same regime that has basically worked, just extend it to 527s. It's not to change 527s and make them any different than anyone else, not to allow 501s to do something that they weren't allowed before. It's worked. It has been proven to be constitutional. It makes the most sense to do it this way.
Q (Off mike) -- I know the black caucus does have a foundation, a 501(c)(3). The Hispanic Caucus has another 501(c)(3). What if they start having town hall meetings across the country? I mean, is that legal? And where do you draw the line?
SEN. MCCAIN: I think it's pretty clear. I -- (inaudible ) -- if it walks like a duck and it quacks like a duck, it's a duck. I mean, it's not hard to tell an organization that is engaged in partisan political activity for the purposes of determining -- affecting the outcome of an election. I mean, it's easy enough.
Q Can they buy ads on TV or --
SEN. MCCAIN: They can buy any ad they want to on TV if they're supporting a cause or an effort or an issue. As soon as they try to determine the outcome of an election, then they, obviously, fall under it. It's not that complicated, it really isn't.
Now, I'm glad you're asking this because a lot of the 501(c)(3)s are -- "This is the end of Western civilization. They will harm us." Not true, unless you are violating the '74 law. We're not going to -- I just got an award from the National Parks Conservancy Association. They're a wonderful group. They buy ads, they raise money in a whole lot of ways, and they're for preserving our National Parks. God bless them. I'm the chairman of the International Republican Institute. We raise money to -- and I'm a member of the advisory board, as I am on many. We raise money to spread democracy and freedom throughout the world. I'm proud of that, and I'll try to raise as much money as I can. But no one believes that we're trying to -- the International Republican Institute nor the National Parks Conservancy Association is trying to determine the outcome of an election. It's not that hard.
Yes?
Q Is clarifying the 527 regulation really going to make the FEC enforce something that they seem pretty reluctant to do? Is it adequate?
SEN. MCCAIN: Well, the law will make it clear, I mean, you know, this is one they will not be able to avoid. But you're right, there is an underlying problem with the Federal Elections Commission. I mean, it's amazing when a federal judge throws out 13 of the first 15 regulations that they issue to implement a law, I mean, I would think the shame over there would be overwhelming, but it's not because they're shameless.
REP. MEEHAN: I think we're essentially writing the regulation for the FEC because they couldn't do it properly themselves.
SEN. MCCAIN: Yeah.
REP. MEEHAN: That's basically what we're doing.
REP./SEN. : Getting rid of the wiggle room.
Q Do you perceive a belief on either side of the aisle that allowing 527s to continue as they are would advantage one party versus the other?
SEN. MCCAIN: No, let me tell you why I believe that we will get overwhelmingly support. The candidates have no control over the campaign. In other words, if -- sometimes these outside organizations hurt the candidate as well as help. One thing the candidate likes to do is have control over the message, and that's not the case with the 527s.
SEN. FEINGOLD: You know, Craig, I would add, in my conversations it's interesting that some, you know, are saying, well, you know, the Democrats got out ahead of this thing, and so, you know, it's bad for the Democrats if you change it. And others think the Republicans, as somebody was pointing on, sort of caught on.
And basically what it is is, in the end, people realize this is an illegitimate activity that is already prohibited by law, so why even get involved in that kind of a risk of enormous abuse? I think that's sort of what we came -- the Congress came to the conclusion on soft money.
It just became such a horrendous process that both sides, one way or another, decided to stop it. That's the sense I get about this. Nobody is sure who's going to come out ahead or behind and it may change over time; it's just something that shouldn't be permitted.
SEN. SCHUMER: But one additional point: Each party has had a sour experience with these, whether it was the Republicans early on when the Democratic ones got started up or Democrats later on with the Swift Boat. And the stars are aligned much better for this legislation than for the previous bill that these four gentlemen so courageously pushed for for a very long time. I mean, when you have the president saying he's for it, when you have most of the leaders of the Congress, both parties, saying that they're for it, it's a lot easier.
That's not to say it's a done deal. The history of campaign finance reform is there's always things that get in the way. But I think it's a lot easier this time than last time. And no -- I know that some Democrats have said, hey, this is great for us, but I let it be known to my colleagues that I was going to do this and I didn't get much flack at all. A few years ago when I went on the -- (laughter) -- McCain-Feingold bill, it was a little different. (Laughter.)
REP. MEEHAN: If I could -- one of the things I think we need to watch is to make sure when this bill passes, because I believe there is a consensus, to make sure there isn't an effort by anyone on either side, in either the House or the Senate, to try to roll back any of the provisions of the campaign finance law to begin with, and I think that's something that we need to make sure doesn't happen.
SEN. MCCAIN: Two more real quick. You and you. Go ahead.
Q There's now a rash of 527s not placing ads in campaigns but trying to influence Social Security private accounts, to push these plans. Are you concerned that the money will flow to those kinds of activities if it's prohibited in campaigns?
SEN. MCCAIN: It doesn't matter.
Q You have no concern that that will increase or decrease --
SEN. MCCAIN: I think people ought to be able to spend as much money as they want to to advocate causes that they believe in.
Q But they're not the partisan plan for causes?
SEN. SCHUMER: The idea is not keeping the money out of causes; it's keeping the money out of politics, or at least soft money.
SEN. FEINGOLD: Out of campaigns.
SEN. SCHUMER: Out of campaigns.
SEN. MCCAIN: Yes, sir?
Q Given the amount of bipartisan support we have for this bill, how likely are we to see support for a bill from the FEC, which kind of --
(Laughter.)
SEN. FEINGOLD: I'll tell you, I'm heartened by Senator Lott's remarks, that are based on hard work in the committee -- not just letting us testify but he has seen and is troubled by this terrible pattern of a rogue agency. And to me, although he certainly hasn't signed on to our bill, that I know of, with regard to this, he's saying all the right things that suggest there's a much broader concern about the failures of the FEC. So I think there's a chance it can move. Not as easily as this.
SEN. MCCAIN: I would just mention that there's, like, three openings that are coming up on the FEC.
If we could get people appointed to the FEC who would enforce the laws, and those appointments are going to have to be filled in the fairly near future, then it might reduce our need to reform the entire FEC. So we need to get through this first, and then I think we would continue to push the other.
REP. SHAYS: I was in Iraq during Election Day, and I was meeting with President Al-Yawar. And he was very unhappy that his elections committee had fined him $1,500, and then he found out that they had fined all the others, for breaking the law that said you couldn't campaign on the last day of the election. And then he was tremendously proud of the fact that this commission had acted fairly and enforced the law.
It amazes me to think that the Iraqis pulled off this election with a commission that enforced their law, and we have a commission here that can't.
SEN. MCCAIN: So we will send the FEC to Iraq. (Laughter.)
Thank you very much.
END.
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