White House Wrong on Campaign Finance

“That’s what you do when you don’t have any issues with which to campaign on,” moderate former Rep. Tom Davis (R.-Va.) told HUMAN EVENTS yesterday.

Davis, who chaired the National Republican Congressional Committee from 1998-2002, was referring to the Obama Administration’s last-minute, election year salvos against campaign expenditures by groups opposed to its agenda.

By now, you have probably heard President Obama, White House Counselor David Axelrod, and Press Secretary Robert Gibbs blasting away at the U.S. Chamber of Commerce and other groups now running independent expenditures on behalf of Republican candidates for the House and Senate.

“Just this week, we learned that one of the largest groups paying for these ads regularly takes money from foreign corporations,” Obama charged in a recent campaign appearance for fellow Democrats. “So groups that receive foreign money are spending huge sums to influence American elections.”

He was referring to the Chamber of Commerce, which does collect foreign dues (and this is perfectly within the law) and suggesting that its independent efforts on behalf of candidates are funded from sources abroad.

While even the New York Times and CBS-TV’s Bob Schieffer have dismissed this as moonshine, it is hard for some people to do the same when charges are coming from the most powerful American and his closest associates.

So here are some oft-asked questions and truthful answers stemming from the election-year charges that are being thrown about regarding campaign expenditures and where they are coming from.

What kinds of groups engage in independent and unlimited spending in federal campaigns and who must disclose their contributors?

527’s, so named because of their section in the U.S. Tax Code, are purely political organizations that can receive unlimited contributions and deploy unlimited expenditures.

According to former Federal Election Commission member and election law expert Hans von Spakovsky, “The FEC does not care whether you are classified as a 527 or 501 (c) (3) or (4) under the IRS tax code. Whatever you are, you have to file disclosure reports with the FEC if you engage in independent political expenditures.”

The 501(c) 4 is a non-profit organization that is usually committed to a set of issues, and may spend on education and advocacy. Such a group may spend some money on politics, so long as it is not a majority of its activity. This is the only group in which donors are non-disclosed and that is based on a decision considered a civil rights landmark, Alabama v. NAACP. In that 1958 ruling, the state sought out the membership list of the NAACP and the court ruled it could be kept private.

Is foreign money permitted in any federal U.S. campaigns?

Absolutely not. Since the Tillman Act was passed in 1907, foreign money has been banned from U.S politics. Federal law, 2 U.S.C. 441e (a), outlaws foreign nationals (including foreign corporations) from contributing directly or indirectly to federal candidates or making any independent expenditures.

Contrary to the President’s remarks about the Citizens United case during his State of the Union address about the Supreme Court’s ruling opening the door to foreign money in U.S. campaigns, the court specifically ruled in that case that its decision did not affect the ban on independent expenditures by foreign corporations. The law has been enforced by the FEC and the Justice Department, the last example being the investigation and settlement with one Johnny Chung and Chinese dollars coming into the U.S. campaigns in 1996. Oh, yes, that one involved a Democrat: Bill Clinton.

Have Democrats had the advantage over Republicans in 527 campaign spending?

Are you kidding?  In 2004, Democratic 527’s spent $231 million to only $116 million by Republican 527s. In ’06, the Democrats’ spending advantage was only $142 million to $141 million, but in ’08, Democrats rebounded and their 527s spent $279 million to $187 million by their GOP counterparts. And this does not include the unions and their expenditures, which in ’08 reached $400 million.

There was not a peep of outrage from Democrats about 527s until 2010, when Republicans suddenly got a taste for these expenditures and began to raise more on them than Democrats. Now, the President misstates the funding and reach of the same groups and Press Secretary Gibbs is denouncing such groups from the White House podium.

This is a far cry from ’03-’04, when an independent expenditure known as Americans for Jobs, Health Care, and Progressive Values directed a TV spot at then-presidential hopeful Howard Dean and featured a photograph of Osama bin Laden. As the ad was being run, Dean spokesman Tricia Enright told the New York Times: “Whoever is behind this should crawl out from underneath their rock and have the courage to say who they are.”

The group did disclose, but only after Dean had been severely wounded going into the Iowa caucuses. The spokesman for the group that wounded him was Robert Gibbs.


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