House Turns Down Donor Disclosure Bill

A day after the Senate surprisingly voted to require disclosure of secret donors and expenditures by tax-exempt political committees, the House voted down a similar amendment Friday.

Before the 216-to-202, largely party-line vote, however, the GOP leadership pledged to fully address the issue in a hearing and another vote before the chamber’s July recess.

Reform advocates said that the day’s developments represent an important step forward for campaign finance reform because the House leadership, which opposes the disclosure measure, was forced to put the issue on its agenda.

Sen. John McCain (R-Ariz.), who led the Senate effort, remained optimistic that Congress will send a disclosure measure to President Clinton for his signature. “He thinks it’s difficult but doable,” said McCain spokeswoman Nancy Ives.

But Rep. Lloyd Doggett (D-Texas), who has been pushing the issue in the House, said that he remains skeptical because Republican House leaders want to maintain the status of so-called 527 committees, many of which are supporting GOP control.

House Majority Whip Tom DeLay (R-Texas), who has raised funds for one of the newly popular committees, opposes the mandatory disclosure of donors because he believes it is unconstitutional, a DeLay spokesman said.

The mixed day for campaign finance reform illustrates how difficult it is to pass even narrow measures in a Congress whose members benefit from the status quo.

“There’s no question that there’s a capacity in Congress to obfuscate any [campaign finance reform] measure,” said Scott Harshbarger, president of Common Cause, a Washington-based watchdog group. “Historically, there has been a desire to give cover to people who don’t want to support reform.”

However, Harshbarger stressed the significance of both the Senate action and the commitment of the House leadership to take up the issue, which reformers see as a particularly egregious example of a campaign finance system that has been corrupted by secret money and huge unregulated donations.

“It’s going to be very difficult for people to run and hide on this one,” he said.

In fact, lawmakers who voted against the measure Friday were scurrying to put their names on other initiatives that differ in their requirements for public disclosure by unregulated groups that spend money to influence federal elections.

Doggett, sponsor of Friday’s effort, hopes to put his amendment up for another vote next week. But the shape of a measure that would get the GOP leadership’s approval for a vote is not yet clear.

“The only silver lining that I see is that this was not on the agenda at all in the House, and the majority leader [Republican Dick Armey of Texas] felt it was necessary to promise a vote before the July recess,” Doggett said. “That is progress, but it is not the progress I wanted. Every day we don’t act, these organizations are collecting more money that is so dirty they’re afraid to reveal its sources.”

The 527 groups have flourished as this year’s most popular vehicles for getting around the spirit, if not the letter, of federal campaign laws. Election law requires public disclosure of the names and professions of contributors of more than $200 to a federal candidate or political committee. In addition, the parties and political action committees that directly support and oppose candidates must report how they spend their money.

However, groups can claim tax-exempt status under Section 527 of the federal tax code if they are “organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for . . . influencing or attempting to influence the selection, nomination, election or appointment of an individual to a federal, state or local public office or office in a political organization.”

Some groups also argue that they do not have to disclose their donors or their expenditures under federal election law because they do not expressly advocate the election or defeat of a particular candidate.

Opponents fear that such secrecy enables the groups to serve as conduits for money from corporations and individuals--American or foreign--who might not want to be viewed as politically active or identified with a particular issue or candidate. The secrecy also can leave voters in the dark about the forces behind television ads and other efforts to influence their ballot-box decisions.

The proliferation of these groups, which some observers estimate could spend hundreds of millions of dollars to influence the November elections, has alarmed some federal officials.

“It’s the most serious challenge [the Federal Election Commission] has faced since its inception,” said Commissioner Karl Sandstrom, a Democrat. Unless the practice is halted, he said, the use of secret funds by both parties will become the norm.

The groups range from those focused on maintaining a GOP majority in the House to organizations working to elect candidates for their positions on environmental protection, prescription drug prices and other issues. Their activities include broadcasting and publishing ads that criticize and praise candidates and political parties, mailing information to voters and get-out the-vote efforts.

The GOP leadership’s resistance to efforts to force public disclosure by the groups is a difficult dance because Republicans have long advocated the disclosure of campaign contributors.

DeLay spokesman Tony Rudy said that his boss opposes mandatory disclosure of donors of independent groups as a threat to free speech. A backer of an unpopular cause--such as gay marriage--should be able to donate money to support it without fear that his “small business will be threatened with a small boycott just because [his name] ends up on some list.”

James Bopp, an attorney who represents more than half a dozen 527 organizations, said he is confident that any measure forcing these groups to disclose their donors will face a court challenge.

“It’s flat unconstitutional to require donor disclosure for organizations that only engage in issue advocacy and voter education,” Bopp said. “The reason for that is that violating the privacy of donors . . . chills and inhibits people from associating with the organizations.”

David Mason, a Republican FEC commissioner, agreed that legislation to force public disclosure of donors to 527 groups could face a constitutional challenge. He cited a 1957 Supreme Court case that supported the National Assn. for the Advancement of Colored People’s right to keep its members and donors anonymous.

“The more groups that are required to disclose and the more that they’re required to disclose, the riskier it is from the constitutional perspective,” he said.