SCHUMER COSPONSORS AMENDMENT TO CLOSE CAMPAIGN FINANCE DISCLOSURE LOOPHOLE

US Senator Charles E. Schumer made the following statement on the floor of the Senate today regarding an amendment to require Section 527 organizations to disclose the contributions they receive:

"I thank you, Mr. President. And I want to thank the Senator from Wisconsin for yielding his time and for his leadership on this issue. I also want to praise my friend from Arizona who has throughout been courageous on this issue as on many others, as well as the Senator from Connecticut whose proposal it is and who has stood as a beacon in terms of reform.

"Mr. President, if you wanted to design a corrupting statute that would blow over our body politic, you would come up with a statute like 527. Although it was inadvertently drafted and never intended for this purpose, its effect eats at the very core of our republic. Imagine if somebody came to you and said, 'Let's make political contributions unlimited and secret.' Most people, if they were given that case, would say, 'What? We cannot do that. That would be the most pernicious violation of the kinds of things we stand for in this democracy that one could imagine.' And yet that is where we stand today.

"If this statute is not changed, anyone, anyone, can give unlimited amounts of money and never identify themselves. Organized crime could contribute to one of these funds, put ads on the air, and dramatically influence elections. Drug dealers, criminals could set up funds and affect candidacies. Foreign governments, people from afar, could do this. And there would be no way to track them down or find it out.

"If the American people knew with some degree of precision what is happening with these accounts, these 527 accounts, they would be shocked. Again, if you were to choose a way of corrupting this democracy, you would design a system like these accounts.

"Today is the 211^th Anniversary of the Bill of Rights. It is the most far-sighted document dedicated to freedom and humanity that has been created. We should consecrate that birthday by cleaning up one part of the campaign finance system that would offend the founding fathers. When we see what these accounts do, imagine Jefferson or Hamilton or Madison looking down and saying, "These accounts are being defended in the name of a constitution and free speech?"

"Just when you think that our campaign system couldn't possibly get any worse, along comes the discovery of this new loophole, Section 527. Section 527 is the largest, most disturbing, and most pernicious loophole in a system rife with backdoor ways to influence government through hidden money. And mark my words, my colleagues, if we don't close this loophole, or at least expose it to the sunlight of disclosure, the 527 accounts will dominate our elections. The so-called hard money will become unimportant, even the disclosed soft money will become unimportant and all kinds of people who none of us would want to see contributing to campaigns and influencing elections, will come above ground. And the effects on our democracy will be profound, and profoundly disturbing.

"The upshot of the crazy system we have, done sort of by accident almost, is that any group can spend any amount on ads that anyone can see are designed to sway elections all without disclosure of any kind.

"You know, my colleagues, the Judiciary Committee, we have spent months examining whether the Chinese Government improperly funneled money into the 1996 elections. Many of my colleagues on the other side are saying this was improper. Well, if they had used one of these accounts, they never would have known about it and it would have been perfectly legal. The 527 loophole is an open invitation to foreign governments, or anyone else, to secretly pump as much money as they want into this election. To me, it would be contradictory, no, hypocritical, for those who correctly inveigh against the abuses of the 1996 election not to support the amendment offered by the Senator from Arizona because if you want to stop foreign government influence and you want to have contributions be open and not secret, you must close this loophole.

"Mr. President, the amendment offered yesterday would end the system of secret expenditures, hidden identities and sullied elections. It would prevent not only foreign governments but organized crime, money launderers, drug lords from contributing. After the election is over, the sad fact of the matter is we won't even know if the Chinese Government sought to influence our elections through 527 accounts, unless this amendment passes. Because there is no disclosure at all. All we want to do is let the people see what groups are out there, who is paying the tab, and how the contributions are being spent.

"The Supreme Court on this anniversary of the Bill of Rights has said the right to vote is the most important right we have because in a democracy the right to vote guarantees all other rights. That basic freedom is tarnished when we prevent the American people from seeing who is trying to influence their vote and how. One of our great Supreme Court Justices, Justice Brandeis wrote famously that "sunlight is the best disinfectant." The bottom line is simple: do we want to disinfect the system which has become worse and worse and worse each year or do we want to under some kind of contrived argument keep the present system going for someone's own advantage?

"Finally, Mr. President, I want to stress this amendment is not an attempt to advance the fortune of one party or another. It is far more important than that. This is not a liberal or conservative amendment. All groups have availed themselves of this type of loophole. All groups must be stopped. This is basic information that the people of America have a right to know and we have a duty to see that they get it."

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