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Parties' Suit Over Issue Ads Shapes Up As A Key Test Of Campaign Finance Rules

By Karen Foerstel, CQ Staff Writer

The Republican National Committee (RNC) and the Ohio Democratic Party have teamed up to fight a court battle some say could undo the entire campaign finance system.

The two parties have formed an unusual alliance against the Federal Election Commission in an effort to scrap restrictions on how they can pay for issue advertising. They have filed suit against the FEC and on June 9 asked a U.S. District Court to impose an injunction on the spending restrictions. A decision is expected in the next few weeks.

"Government control over money is control over free speech," Robert F. Bauer, a lawyer for the Ohio Democrats, told District Judge William Bryant. "[The FEC] is not supposed to maraud across the political landscape."

At question is how much money political parties can spend on issue ads -- the kind that talk about almost anything political but cannot expressly say "vote for" or "vote against" a candidate. Currently, national parties can spend no more than 40 percent of unregulated "soft money" contributions on such ads. Limits on state parties vary depending on the ratio of federal to non-federal candidates. (CQ Weekly, p. 1112)

But there are no limits on the amount of money outside special interest groups can spend on issue ads. According to the Annenberg Public Policy Center of the University of Pennsylvania, third-party groups during the 1995-96 election cycle spent an estimated $57 million to $72 million on issue ads with no regulations or requirements to report how they paid for the ads. The RNC and Ohio Democrats argued that they are being treated unfairly and denied their First Amendment free speech rights.

"Political parties are in serious danger. We are being shunted to the political margins," Bauer argued. "Political parties are struggling to compete, and they cannot compete . . . under a restrictive regime."

But the FEC and several political watchdog groups argued that without the spending restrictions, big money corporations and individuals will end up running the political system.

"What [the parties] are asking for is for this court to turn back the clock . . . to when corporations, unions, foreign entities could make undisclosed contributions in return for favors," FEC lawyer Stephen Hershkowitz told the court. "We're not talking about whether or not they can speak; we're talking about which money they can use."

Hershkowitz also said that if the judge ruled in favor of the parties and lifted the restrictions, that would logically lead to an end to requirements for reporting who paid for the ads.

FEC's Allies

Among those backing the FEC are Common Cause, the reform advocacy group; and two research organizations dedicated to improving the democratic process, the Brennan Center for Justice and Democracy 21. They jointly filed a friend-of-the-court brief in the case in May.

The groups call issue ads "thinly disguised commercials" for party nominees and say if the spending restrictions are lifted, there will not only be an onslaught of such ads in this election cycle but an eventual collapse of the entire campaign finance system.

"They're trying to basically take apart the campaign finance laws," said Donald J. Simon, general counsel and executive vice president of Common Cause, in an interview. "We made a decision as a nation almost a century ago to keep corporate money out of federal elections and to limit the size of contributions because of the corrupting influence. Candidates become beholden to donors of large sums of money."

Simon said if political parties are free to spend unlimited amounts of soft money on issue ads, there will be little incentive to raise "hard money," the regulated contributions that are subject to limits and disclosure.

Steve Weissman, legislative representative of Public Citizen's Congress Watch, said his group favors getting rid of soft money entirely and placing restrictions on issue ads run by political and outside groups. Weissman warned of irreparable harm to the democratic system if the court rules in favor of the RNC and Ohio Democratic Party.

"It would be delivering national party policy to the hands of people who are giving large chunks of money. It's saying we don't want to just raise so-called small amounts," Weissman said. "It would be a backward step in favor of evading the campaign finance laws."

Weissman said even with the current restrictions on buying issue ads, the political parties have been able to spend millions of dollars airing the commercials. According to the Annenberg Public Policy Center, the Republican Party spent about $34 million on issue ads during the last election cycle, and Democrats spent about $44 million.

But the RNC and Ohio Democrats dismiss the argument that lifting ad restrictions will cause a deluge of soft money contributions that will corrupt the political system. They contend that ending the restrictions will have no impact on their solicitation of soft money.

"The FEC argument is that it will open the floodgates," said RNC lawyer Bobby Burchfield. "The regulation doesn't have anything to do with raising or accepting soft money."

The political parties acknowledge that if the restrictions are lifted, they are ready to air more issue ads.

"We intend to use non-federal money for ads," said RNC spokesman Mike Collins.

Neither Collins nor David Leland, chairman of the Ohio Democratic Party, would predict the immediate impact of an injunction or say how many new issue ads they would air.

"We have a lot of different things we're kicking around with what we want to do in the '98 campaign," Leland said.

© 1998 Congressional Quarterly Inc. All Rights Reserved.
Congressional Quarterly This Week

June 16, 1998

House-Passed Bankruptcy Rewrite Demands More From Debtors
Mixed Signals In The Debate Over Encryption Technology
House Measure Boosts Penalties For Internet Predators
Parties' Suit Over Issue Ads Shapes Up As A Key Test Of Campaign Finance Rules
Missouri Democrat's Senate Drive Is Clouded By Desegregation Case
Senate's Product Liability Deal Has Strong Prospects For Avoiding Clinton Veto

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