House Backs Limits on Donations to ‘527’ Committees

Times Staff Writer

The Republican-controlled House on Wednesday narrowly approved amending the 2002 campaign finance law to close a “loophole” that has benefited Democrats in the two federal elections since then.

The bill for the first time would impose limits on individual contributions, which have reached into the millions of dollars, to committees that work on behalf of political candidates but independently of the candidates and their campaigns. The vote was 218 to 209, with seven Democrats voting yes and 18 Republicans opposed.

The bill faces an uncertain fate in the Senate, where Democratic leaders have expressed skepticism. Republicans’ united support would provide 55 of the chamber’s 100 votes, but they would need 60 to break a filibuster.


The issue raised an unusual spectacle in the House, with the Democrats who spearheaded the 2002 campaign measure voting against the additional limits and the Republicans who resisted the 2002 law voting to toughen it.

Rep. Christopher Shays (R-Conn.) called the debate “surreal.” Shays and Rep. Martin T. Meehan (D-Mass.), the chief House sponsors of the 2002 overhaul, were also the authors of the bill passed Wednesday.

The 2002 measure, commonly known for its Senate sponsors, John McCain (R-Ariz.) and Russell D. Feingold (D-Wis.), ruled out “soft money” -- unregulated and unlimited contributions to political parties. But the McCain-Feingold law left individuals free to make unlimited contributions to private political groups organized under Section 527 of the Internal Revenue Code.

The so-called 527 committees, in turn, could campaign on behalf of presidential and congressional candidates, so long as the committees did not coordinate their activities with the candidates or their campaigns.

The new measure would limit individual contributions to 527 committees to $25,000 a year for partisan voter-turnout efforts and $5,000 for expenditures on behalf of federal election campaigns.

In the two years leading up to President Bush’s reelection in 2004, businessman George Soros alone contributed more than $23 million to 527 groups supporting Democratic candidates. Houston homebuilder Bob J. Perry gave more than $8 million to 527 group Swift Boat Veterans for Truth, which campaigned against Democratic presidential candidate John F. Kerry.

House Rules Committee Chairman David Dreier (R-San Dimas), arguing to close what he called the “biggest remaining loophole” in campaign finance, said, “Soft money still dominates the political process.” The McCain-Feingold law, he said, merely shifted the recipients of these unlimited contributions from party organizations to 527 committees.

Democrats accused Republicans, who mostly opposed McCain-Feingold, of changing their stripes because they found that the 2002 law gave Democrats a fundraising edge. “I suspect this is a last-ditch effort by Republicans to keep their grip on power,” said Rep. Zoe Lofgren (D-San Jose).

House Californians voted along party lines except for Rep. Diane Watson (D-Los Angeles), who did not vote.

A leader of House conservatives, Rep. Mike Pence (R-Ind.), who voted against the bill, has argued that limits on contributions to 527 committees would leave a political vacuum that would be filled by other, unregulated groups.

For example, nonprofit organizations governed by Section 501(c)(4) of the tax code spent heavily against the prospective reelection of Rep. Tom DeLay (R-Texas). The former majority leader announced this week that he would soon retire from Congress, precluding a nasty campaign.

The conservative Republicans who voted against Wednesday’s bill said they opposed it for the same reason they had opposed McCainFeingold, because it restricted political speech.

J. William Lauderback, executive vice president of the American Conservative Union, said of the bill, “It makes you scratch your head and ask, ‘This is coming from the Republican leadership?’ ”