Guest columnist
Democrats exploit loophole to subvert campaign-finance law

By Mike McKay
Special to The Times

	Mike McKay
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The bipartisan idea was to restrain wealthy individuals and Washington special-interest groups, with their seemingly bottomless deep pockets, from giving political parties unlimited donations to promote their candidates' campaigns or to tear down their opponents'.

But Democrats knew they would not be able to compete with Republicans in raising "hard money" — legal donations in small amounts from supporters — for the 2004 elections, so they looked for a loophole in McCain-Feingold that would keep their soft-money pipeline open and huge contributions flowing through it.

They thought they found one in the so-called "527s."

McCain-Feingold allows the creation of organizations — named "527s" after the tax code section that spawned them — that can accept soft money for voter registration, "get out the vote" drives and similar programs. These groups are not required by law to provide any information about their fund-raising activities or how they spend those dollars.

So, for the past two years, some Democrats have been setting up murky 527s and filling their coffers with millions upon millions of dollars in unlimited soft money collected from a very small number of special-interest and wealthy contributors. Media reports put the total at somewhere between $300 million to $400 million, with individuals contributing well over $1 million or more.

But instead of the voter-registration drives and similar programs that were the clear intent of McCain-Feingold, these 527s are running attack ads, putting out blatantly partisan information and waging a politically coordinated media war — all expressly forbidden under McCain-Feingold.

Incredibly, the partisan politicos and deep-pocket donors who are creating the 527s say they have no ties to the Democratic Party. But many of the groups' leaders are longtime party operatives who are using this loophole for the same old political goals.

For example, international financier George Soros, a longtime Democratic Party donor, has committed $15 million to 527s and has publicly said his goal is to defeat Bush and elect Democrats.

The Media Fund, run by Harold Ickes, former deputy chief of staff to President Clinton, is committing $40 million to TV ads against Republicans. Ads attacking Bush have already begun running in some states.

McCain-Feingold was supposed to keep this from happening. One of the law's goals was to keep these groups from spending their huge war chests on dirty, back-alley campaigns, then scurrying back into the shadows before anyone could figure out who they were and what they were up to.

Yet, that's exactly what is happening. The Media Fund and other such groups are airing ads that attack Bush, and are indistinguishable from the activities of political parties and their candidates' campaigns.

Even The New York Times is concerned that such activity goes against the spirit, if not the letter, of McCain-Feingold:

"We are now engaged in the first federal election contest under the new campaign-finance law prohibiting open-ended donations from corporations, unions and wealthy individuals in federal elections. Already, political insiders are carving a giant loophole that the Federal Election Commission must swiftly close. Otherwise, the system will be flooded again with the large and politically destructive contributions the new law was meant to stop. At issue are a handful of new committees set up by Democratic operatives and dedicated to turning President Bush out of office.... " ( "Soft money slinks back" New York Times editorial, March 11.)

The New York Times is absolutely correct. When Republicans and Democrats came together to pass the landmark McCain-Feingold legislation, their intent was clear. They sought to turn off the spigot to the unlimited, unregulated special-interest money that poisons the political environment. The Federal Election Commission (FEC) should not allow these 527s to hinder that bipartisan accomplishment.

The FEC has delayed a decision until May, but too much political damage could be done in that time. The commission must move quickly to determine the legality of Democrat 527s to protect the integrity of the 2004 campaign season. Otherwise, the public that has to endure the negativity and mud-slinging these murky groups spew over the airwaves will be the real losers in this political season.

Mike McKay, a former U.S. attorney for the western district of Washington, was state co-chairman of the Bush-Cheney campaign in 2000 and is state vice chairman of Bush-Cheney '04. He is a partner in the Seattle law firm McKay Chadwell.

Copyright © 2004 The Seattle Times Company