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Campaign Reform Bill Beats Odds

TIMES STAFF WRITER

The Senate, rushing to embrace the first major change in campaign finance law in 21 years, gave final approval Thursday to a bill that would force disclosure of secret donors and the expenditures of a newly popular brand of tax-exempt political committee.

The bill, approved 92 to 6 and sent to President Clinton for his expected signature, is narrow in scope and surely will not stop the flood of money into politics this election year. But the bill’s stampede through Congress was a blow to one pillar of conventional wisdom dominating campaign finance debate for years: the belief that any reform effort is doomed to fail.

The measure’s passage--over bitter objections from GOP leaders in the House and Senate--probably does not signal a sea change in congressional sentiment on broader campaign reforms that have long remained stalled. Still, the bill’s passage is a legislative breakthrough that reform advocates hope to parlay into new momentum--and possibly a new strategy--in future fights.

“To all those who believe in reform, today is only the first step, but it is a great first step,” said Sen. John McCain (R-Ariz.), who sponsored the measure and had made campaign finance reform the centerpiece of his failed run for the GOP presidential nomination earlier this year.

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The bill was approved by the House earlier this week by a similar landslide margin, 385 to 39.

To reform advocates, the bill’s success offered key lessons, demonstrating the advantage of nipping new campaign finance gimmicks in the bud and closing a loophole before too many interests become vested in using them. The tax-exempt committees targeted by the bill have become a hot new fund-raising ploy just in this election cycle, and neither party is yet heavily dependent on them.

But that’s also why reformers will have a much harder time as they renew efforts to ban “soft money"--unlimited donations from unions, corporations and individuals that long have been collected by both parties.

The tax-exempt committees--known as 527 committees after a section of the tax code--are ideological and issue-oriented groups that now are legally allowed to raise and spend money on television ads and other political activities without being subject to the contribution limits and disclosure requirements that apply to most political groups.

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To close that loophole, the bill approved by Congress would require these groups to register with the Internal Revenue Service and disclose the identities of donors who contribute $200 or more annually and any expenditures of $500 or more that aim to influence elections. The requirement will take effect as soon as the president signs the bill.

Debate over the measure demonstrated that, whatever the divisions over more ambitious campaign finance efforts--such as McCain’s signature bid to ban soft money and limit campaign spending--there is a broad bipartisan consensus that disclosure is an important tool of public accountability.

To build on that, reform advocates said, their next step may be to push for expanding the disclosure requirement to other kinds of politically active groups.

Indeed, some activists said that the scenario for the bill targeting 527 committees shows that reformers may have more luck with piecemeal changes in campaign finance law in the absence of consensus about broader changes.

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“An incremental approach to reform can succeed even as more sweeping proposals remain mired in politics,” said Cheryl Perrin, executive director of Campaign for America, a coalition of business leaders supporting campaign law reform.

Analysts said that the measure’s surprising success may also signal growing political sensitivity surrounding campaign finance issues as a result of McCain’s surprisingly strong showing in the presidential campaign.

Sen. Mitch McConnell (R-Ky.), the leading opponent of campaign finance reform, candidly acknowledged the disclosure bill’s political punch when he urged fellow Republicans to vote for it--even though he said that he believes it would be unconstitutional.

“I would say to my colleagues--particularly those up for reelection this year--[the constitutional argument] is a pretty hard argument to make, particularly in a political campaign,” said McConnell, chairman of the National Republican Senatorial Committee. “I do not think this is a spear worth falling on four months in advance of an election.”

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Still, McConnell argued that the measure cleared the Senate quickly and easily Thursday because it would have so little impact. It will not apply to the biggest sources of outside money in politics, such as labor unions and business lobbies.

“It affects very few groups,” said McConnell. “It will probably not dramatically alter the landscape.”

What’s more, even sponsors of the bill conceded that some of the donors to 527 groups likely will find new avenues for giving anonymously through other tax-exempt groups that are not as directly involved in political activities and are not covered by the disclosure requirement.

Still, the bill’s sponsors said it was important to cut off at least one of the most egregious avenues for anonymous giving.

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“In a campaign finance system that is wildly and dangerously out of control, today we are about to draw a line,” said Sen. Joseph I. Lieberman (D-Conn.).

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FUND-RAISING REFORMS

Legislators seek to reform campaign funding, but critics call it a sneak attack on law. A3

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