CAMPAIGN FINANCE UPDATE CLEARS
CONGRESS
October 18, 2002
WASHINGTON - Senator Governmental Affairs Committee
Chairman Joe Lieberman, D-Conn., Friday
announced Senate passage of legislation to improve
disclosure of campaign contributions and expenditures by
so-called 527, tax-exempt political organizations.
The measure - which improves upon a
reform bill passed two years ago - cleared the House earlier in
the week.
"This is another step toward
fully identifying the special interests that try to influence
our elections," Lieberman said.
"We have a good compromise here that will grant
relief to those who were unfairly penalized under the old law
while still requiring maximum disclosure of campaign
contributions. I
have no doubt passage of this legislation will help hold the
line this fall, when soft money donors barred from contributing
to the national parties by the McCain-Feingold reform bill will
be looking for other outlets for their cash."
In June 2000, Congress passed the
first significant campaign finance reform measure in a quarter
century which opened to sunlight the shadowy world in which 527
groups operated. Exploiting
a loophole in federal election law, the 527 groups sought
tax-exempt status from the IRS by claiming they existed to
influence elections, but then avoided election disclosure laws
by denying to the Federal Election Commission they were trying
to influence elections. The result was a tax exemption for
groups influencing campaigns but a lack of disclosure informing
voters where the groups' money came from or went to.
The law enacted in 2000 ended this
contradiction by requiring groups to give notice of their intent
to claim tax-exempt status; to disclose information about their
large contributors and expenditures; and to file annual
informational returns along the lines of those filed by
virtually all other tax-exempt organizations.
Although the 2000 law has gone a
long way to promote clean and open elections, experts also
identified needed improvements.
Public interest groups reported that additional
information needed to be disclosed to understand 527s'
activities and that that information needed to be easily
accessible. Concerns
also were raised by state and local political organizations
about duplicative filings.
The bill passed by the Senate
addresses these shortcomings by requiring groups to:
·
Provide the dates of contributions they receive
and the expenditures they make and explaining the purpose of the
expenditure.
·
Provide updated information
on themselves if there is any material change in the basic
identifying information they filed with the IRS.
·
File disclosures
electronically, and the IRS will have to make those reports
searchable on, and downloadable from, the Internet.
The measure also grants relief from the 527 reform law to
a number of organizations that focus on state and local
elections and that are regulated by state disclosure laws.
Lieberman
Statement on Passage of 527 Bill
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