The Federal Election Commission Chairman Must Go

THE FEDERAL ELECTION COMMISSION CHAIRMAN MUST GO

Mr. McCAIN. Mr. President, I was in Arizona recently, and by chance I watched C-SPAN airing the Federal Election Commission hearing on the issue of 527s. Let me assure my colleagues, it was both eye opening and appalling.

Once in a while, we have a public debate in Washington that serves as a perfect metaphor for the cynical way in which business is sometimes done here. The argument over whether and when the Federal Election Commission should regulate new soft money fundraising groups provides us with one of those moments. In it, we can see how badly our election watchdog has served the public and the urgent need to fix it.

The Chairman of the Federal Election Commission, Bradley Smith, claims apparently some moral superiority on the issue of 527s because as a Republican he stands in opposition to the Republican Party's effort to ensure 527 groups comply with the law. While some may look upon his views as principles, I can only conclude that they again illustrate the same unfitness to serve on the Federal Election Commission he has shown since he was appointed 5 years ago.

Despite claims that his contempt for the Federal elections laws was merely that of an academic commentator and that he would uphold the laws as passed by Congress if confirmed, Mr. Smith has made no secret since arriving at the FEC of his disdain for the Federal Election Campaign Act of 1974, as well as the Bipartisan Campaign Reform Act of 2002. He has done so once again in the pending rulemaking.

Even after the Supreme Court decision in McConnell v. FEC, Mr. Smith has gone out of his way to criticize the Court's decision and the law he is supposed to enforce. In one public speech he said:

Now and then the Supreme Court issues a decision that cries out to the public, "We do not know what we are doing." McConnell is such a decision.

Further evidence of Mr. Smith's predilection can be found in an article in the May 3 edition of National Review in which he writes:

Campaign reform passed Congress and was upheld by the Supreme Court because groups hostile to freedom spent hundreds of millions of dollars to create an intellectual climate in which free political participation was viewed as a threat to democracy.

This is perhaps the most inflammatory and inappropriate comment I have ever seen by an individual who is supposed to be enforcing existing law, affirmed in its constitutionality by the Supreme Court of the United States of America. To assert that proreform groups had somehow brainwashed Congress and the Supreme Court is simply pathetic and solidifies my belief that Mr. Smith cannot administer our campaign finance laws in good faith because he is incapable of putting his sworn duties above his personal opinion.

By the way, his treatment of Mr. Nobel, a witness before the FEC, was as bullying and as cowardly as I have ever seen anyone conduct themselves in our Nation's Capital and clearly was an abuse of his authority as Chairman of the Commission.

Mr. Smith's views on the constitutionality of the Nation's campaign finance laws have been repeatedly rejected by the Supreme Court. Mr. Smith was dead wrong in his views that the Federal Election Campaign Act and its restrictions on contributions were unconstitutional, and Mr. Smith was dead wrong in his views that BCRA was unconstitutional. Mr. Smith seems to be incapable of accepting the fact that the Supreme Court of the United States, not Mr. Smith, is the last word on the constitutionality of campaign laws and that it is his job as an FEC Commissioner to carry out, not thwart, the Supreme Court's mandate.

I do not deny that Mr. Smith is entitled to his personal views on the issue of regulating 527s. I am saying, however, that he is failing to fulfill his duties as the chairman of a Federal agency and one who is sworn to uphold and enforce the law. Just as we would not tolerate the appointment of a pacifist to be Chairman of the Joint Chiefs of Staff or the Director of the FBI who believes the whole Penal Code should be null and void, so we should not accept a Chairman of the FEC who opposes campaign laws upheld as constitutional by the U.S. Supreme Court.

Knowing of his opposition to the laws he was sworn to uphold, I cannot fathom why Mr. Smith would have even accepted his current position in the first place, certainly now that the Supreme Court has proven him wrong and upheld the constitutionality of a law that he stated was "clearly unconstitutional." It makes no sense. It makes no sense for him to be charged with enforcing a law he so publicly opposes on policy and legal grounds.

I know if I were in Mr. Smith's shoes, I would do the honorable thing and resign if I was so determined to carry on a crusade against Federal regulation of campaign finance. I would leave the FEC position to be filled by someone who believed in the job.

If any of my colleagues think I am exaggerating about these FEC hearings, by the way, they should get a tape from C-SPAN and look at it themselves. It was shocking.

One very troubling aspect of the hearings was the way in which some Commissioners and antireform witnesses joined in a chorus of complaint that "no one knew what Congress intended to do" when it passed FECA in 1974 and BCRA in 2002.

One witness testified that it took Congress 7 years to figure out what to do about soft money. I am somewhat amazed by such a statement because anyone who was in Washington during those 7 years knows that the main component of our bill-from the very beginning-was a ban on soft money. You can't get much more definitive than a ban. What did take 7 years was convincing our opponents to allow a vote on the measure, and when we finally got our vote, we had clear majorities in both Houses.

Some of the lawyers who testified that no one knows what Congress intended to do in these bills were the very same lawyers who spent years urging Members to vote against BCRA, and argued its unconstitutionality before the Supreme Court. Give me a break. As witnesses to Congressional intent, they have zero credibility. Let me be clear on this: Senator FEINGOLD and I repeatedly told the FEC exactly what we intended to accomplish with our legislation, and the legislative history of FECA from 1974 is equally as clear. The only confusion in this area has been with the FEC itself and those Commissioners who just simply didn't like the actions taken by Congress.

The Commission's hearings centered on the issue of regulation of so-called "527 groups" that are raising and spending millions of dollars in soft money in the current presidential election. These groups readily admit that their intended purpose is to influence the outcome of Federal elections. FECA has long required these groups to register as Federal political committees and comply with Federal campaign finance limits. Unfortunately, because the FEC has misinterpreted and undermined the law, we find ourselves in this unenforced regulatory limbo today. The 1974 law requires that any group with a "major purpose" of influencing a Federal election, and which spends more than $1,000 doing so, must use the same limited hard money contributions as the political parties and the candidates themselves. In recent years though, the FEC slouched into the feckless and unjustified position of not enforcing the law in the case of groups which avoided the "magic words" of "express advocacy" but were set up and operated to influence Federal elections. Then, in McConnell, the Supreme Court itself made clear what many of us already knew-that the Constitution did not require an "express advocacy" standard, and that such a standard is "functionally meaningless." That's the words of The United States Supreme Court.

But here we are, with these groups openly flouting the law and openly spending soft money for the express purpose of influencing the presidential election while the FEC sits on its hands once again. Like the emperor with no clothes, those Commissioners just do not know what to do now that the Supreme Court has removed their "express advocacy is required by the Constitution" rationale for failing to regulate political activity by the 527 political organizations. As a result, these organizations remain busy soliciting and spending millions for the avowed purpose of influencing Federal elections.

That the FEC's lack of action undermines the law isn't just my opinion. The Supreme Court confirmed this in its recent decision upholding the soft money ban. In McConnell v. FEC, the Supreme Court stated, in no uncertain terms, how we ended up in the soft money crisis to begin with. The Justices placed the blame squarely at the doors of the FEC, concluding that the agency had eroded the prohibitions on union and corporate spending, and the limits on individual contributions through years of bad rulings and rulemakings, including its formulas for allocation of party expenses between Federal and non-Federal accounts. Regarding the allocation regulations for parties, the Supreme Court stated in McConnell that the FEC had "subverted" the law, issued regulations that "permitted more than Congress . . . had ever intended", and "invited widespread circumvention of FECA's limits on contributions." That is a damning indictment of the behavior and performance of the Federal Elections Commission.

Based on the recent hearings, it seems entirely possible that the FEC will once again abdicate its statutory responsibilities and refuse to end this new soft money scheme-or at least put off any action until the Presidential election is over. In fact, FFC Vice-chair Ellen Weintraub recently opposed a rulemaking on 527 activity saying that:

At this stage in the election cycle, it is unprecedented for the FEC to contemplate changes to the very definitions of terms as fundamental as "expenditure" and "political committee" . . . sowing uncertainty during an election year.

Ms. Weintraub further stated:

I will not be rushed to make hasty decisions, with far-reaching implications, at the behest of those who see in our hurried action their short-term political gain.

Ms. Weintraub has no business looking at the election calendar. That is none of her business. What is her business is to enforce existing law according to the law in the U.S. Supreme Court upholding its constitutionality. It should not matter to Ms. Weintraub whether we are in an even numbered year, an odd numbered year, fall, spring, winter, or summer. This is an incredible statement as to how politics affects a Federal commission that is supposed to rule on laws, not on political campaigns.

Of course, it is not that complicated. All the FEC needs to do now is simply enforce existing Federal law as written by Congress in 1974 and interpreted by the Supreme Court in a number of cases, including the McConnell case. It defies the whole purpose of the FEC, to say it should not properly enforce the law in the middle of an election year because such enforcement might affect that election. We want the law enforced. I have never heard of a regulatory agency that has any reference whatsoever to political campaigns.

The fact the FEC has neglected to properly enforce the law correctly in the past is not a reason or justification for the Commission to continue failing to properly enforce the law, now that the Supreme Court has made clear the FEC was wrong. If the FEC fails to act now, the FEC will simply be treading the same destructive path it has followed for a generation.

We know systemic campaign finance abuses have usually begun when one political party decides to push the envelope and the FEC declines to act, leading the other party to adopt the same illegal tactics. In 1988, one party invented the use of soft money to promote their Presidential campaign, evading campaign finance rules. The Commission let them get away with this. This is well documented. The other party followed.

In 1996, the soft money scheme was raised to an art form and the Commission did nothing. You have to ask whether the Commission has learned anything about the consequences of its failure to properly enforce the law. History proves it is imperative that the Commission act now. If it does not, we can rest assured both parties will soon be trying to out-raise each other in this venue, and a whole new soft money scheme will have blossomed.

By the way, the reality is if these soft money 527s are allowed to stand-they are now, we know, largely funded by Democrats. Who in the world doesn't understand if you allow this to stand, then the Republicans will do the same thing, and understandably so? Just as in 1988 one party was allowed to do it, so the other party was able to as well.

Much of the controversy at the Commission has been ginned up by an artfully crafted misinformation campaign designed to persuade the nonprofit community-the 501©s-that any FEC action to rein in 527s would have the unintended consequence of limiting their own advocacy efforts. It is true certain campaign finance rules for spending by nonprofits are different than they are for political groups like 527s. There is no immediate campaign finance regulatory problem with the 501© groups. I repeat, there is no immediate campaign finance regulatory problem with the 501© groups as there is with the 527 groups, and no need-no need to address 501© groups in this rulemaking.

Some have suggested the agency do what Congress did when it passed BCRA: Issue a ruling but make the change effective after the election.

What these critics fail to recognize, however, is that Congress was creating an entirely new set of election rules in BCRA. All that is required here is for the FEC to properly enforce law that has been on the books for 30 years, and to abandon its wrong interpretations of the law as made clear in the McConnell decision. To issue new regulations now and make them effective after the 2004 election would be for the FEC to say that "we know the law has been wrongly interpreted for years but we are going to allow that to continue for the rest of this year, and then next year, we will start interpreting that law correctly." This is simply not rational and it is an abdication of their responsibilities.

Finally, it is essential that the FEC act quickly to fix its absurd allocation rules, which govern the mix of soft and hard money a political committee can spend when it is supporting both State and Federal candidates. It is clear that a number of the current crop of 527s exist only to defeat President Bush. But through the absurd FEC allocation formulas, if these same entities also claim to be working in state elections, they could use soft money for 98 percent of their expenditures-a complete end-run around the soft money ban in Federal races.

Despite all the evidence, I am still hopeful the Commissioners will summon the political will to do the right thing now. There are some commissioners who want to do the right thing. I want them to step forward and do it. But even if they do, the agency's structural problems will be the same as they ever were. By unfortunate custom, three Republicans and three Democrats are chosen by their party leadership, usually with the express purpose of protecting their party's interests, rather than enforcing the law. It takes four votes for the Commission to take action-a requirement that has been a recipe for deadlock and bipartisan collusion and gave birth to the soft money problem we're trying to put behind us.

Last month I testified before the Senate Rules Committee on the issue of 527s. During my testimony I stated that one of the problems the FEC faces today is that some Commissioners, and in particular Chairman Smith, refuse to accept the Supreme Court's conclusions in the area of campaign financing. A decision by the FEC to abdicate its responsibility at this politically inconvenient moment will only provide further evidence that it is time to start over. If the Commission has become too hopelessly politicized to do its job, then we must replace it with an agency that will.

The FEC's current difficulty in dealing with an issue as straightforward as these 527 organizations spending soft money to influence the 2004 Federal elections, and the 3-3 ties at the Commission when it recently considered an advisory opinion on this issue, are only the most recent examples of the need for fundamental FEC reform. With my fellow BCRA sponsors, I have introduced legislation that would scrap the FEC and start over, using a new organizational structure and administrative law judges to avoid deadlocks and take some of the politics out of the process. Whether we adopt this or some other basic reform, it is time for a watchdog with some bite.

I thank the President for his patience as I ran over the previously agreed-to time.

This is a very serious issue. We are not going to give up on it. We didn't work for 7 years to get campaign finance reform done and upheld by the U.S. Supreme Court to have a group of six people down there who are so politicized that they refuse to enforce a law which was passed by this Congress in overwhelming numbers, finally, and upheld by the U.S. Supreme Court.

I want to tell them and all of those other people I watched on C-SPAN who are trying to undermine this law that we will not let you get away with it. American politics and the political process is too sacred for me to allow these stooges of special interests around this town to prevail and prevent us from restoring faith and confidence in the American people and their electoral system.

Again, I appreciate the patience of the Presiding Officer.
I yield the floor.