FEC Ruling Curbs Use of ‘Soft Money’

The Federal Election Commission decided Wednesday that certain independent groups that aim to influence the 2004 election -- including some formed to oppose President Bush -- must have tighter controls on the money they raise and spend.

But the practical effect of the ruling remained uncertain and is expected to depend on future decisions by the FEC.

Republicans cheered the decision. But the regulators stopped short of steps that might have severely curtailed some prominent Democratic-leaning groups that hope to spend tens of millions of dollars to defeat Bush.

The FEC’s 4-2 decision means that political groups known as 527s may have to limit the campaign activities they pay for with “soft money” -- unlimited contributions from corporations, unions and wealthy individuals.

Activities that fall under the scope of the regulation would be television advertisements that “promote, attack, support or oppose” a federal candidate.

The 527 groups -- named for a section of the tax code -- that have drawn notice recently are America Coming Together, the Media Fund and Partnership for America’s Families. All are devoted to ousting Bush.

Some veteran Democratic operatives affiliated with the groups expressed confidence they would still be able to fulfill their original purpose: providing a vehicle for Democrats to put large contributions to work to help defeat Bush.

The Republican National Committee, however, hailed the decision as a milestone in its efforts to protect Bush from what it said would be attacks by shadow Democratic groups formed to skirt the 2002 campaign finance reform law. That law prohibited national political parties from raising and spending soft money.

“The Federal Election Commission should be commended for its campaign finance ruling to uphold the new law of the land,” RNC Chairman Ed Gillespie said. “Today’s ruling effectively shuts down illicit 527 groups that operate in the shadows by using unregulated soft money to influence federal elections.”

But a prominent advocate of the campaign finance reform said the ruling was limited. “It’s just postponed the biggest soft money issues until the next round,” said Fred Wertheimer, of the Washington group Democracy 21.

The ruling was an advisory opinion sought by a Republican-allied group, Americans for a Better Country.

It was approved by three Democratic-appointed commissioners and one Republican appointee. Two GOP appointees dissented, including FEC Chairman Bradley A. Smith, who said he opposed further political finance regulation.

The majority on the commission said the ruling would not deter legitimate political activity.

“I think there’s still a lot of room out there for people to operate,” FEC commissioner Ellen Weintraub, a Democratic appointee, told Associated Press.

“You can’t stop the flow of money.”