A special three-judge district court, which heard arguments earlier this month, is expected to rule sometime in January on the constitutionality of the Bipartisan Campaign Reform Act of 2002 (BCRA). The court ordered that all documents in this controversial case be made public, unless there were specific objections. Since then, the court has heard from more than two-dozen organizations and individuals asking that their information be kept secret. Among those groups objecting to disclosure have been units of the Democratic and Republican parties, the National Rifle Association, and the National Right to Life Committee. The most recent to ask that the information be kept secret is the federal government.
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FEC Approves New Rule on Coordinated Communications 12/09/2002
On December 5 the Federal Election Commission (FEC) approved new regulations that define when communications with a federal candidate, a campaign, party or their agent, may turn an otherwise independent expenditure into a prohibited in-kind campaign contribution. The rule implements the Bipartisan Campaign Reform Act of 2002, which required the FEC to write tougher regulations in this area. The regulations will take effect 30 days after publication in the Federal Register. The new rules use a three-part test to determine when an expense is considered “coordinated”. It must be for a public communication paid for by someone other than a candidate or campaign and meet specific standards relating to both content and conduct between the candidate and group or person paying for it. Read More

Stealth PAC Amendments Become Law 10/28/2002
Congress approved a compromise bill just before its fall recess exempting state and local PACs from reporting requirements under the Stealth PAC law of 2000 and requiring data from reports to be made available on the Internet in a searchable format. President Bush signed the bill into law a week later. Read More

Campaign Finance Reform Update 10/15/2002
Below is a summary of new developments concerning campaign finance issues. Read More

House Defeats Church Electioneering Bill 10/02/2002
The House of Representatives defeated H.R. 2357, which would have allowed religious organizations to endorse candidates and spend tax deductible funds on partisan election activities, by a wide margin on Oct. 2. The final vote- 178 YEA - 239 NAY - 15 Not Voting- reflected concerns about separation of church and state and campaign finance reform.

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FEC Exempts Unpaid Broadcasts, Charities from New Rules 09/30/2002
The Federal Election Commission (FEC) approved final regulations on September 26 implementing a ban on broadcasts by corporations (including nonprofits) and labor unions that refer to federal candidates within 60 days of an election or 30 days of a primary. The FEC used its authority under the Bipartisan Campaign Reform Act of 2002 (BCRA), which directed the ban, to carve out two important exceptions: free air time and broadcasts by charitable, educational and religious groups that are exempt under Section 501(c)(3) of the tax code.
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FEC Proposes New Definition of ?Coordination? With Candidates 09/16/2002
Last week the FEC proposed new rules to define when communications with a federal candidate, a campaign, party or their agent, may turn an otherwise independent expenditure into an in-kind campaign contribution. Since corporations, including nonprofits, are prohibited from making contributions to federal candidates, the regulatory definition of “coordination” could impact any group that interacts with public officials or community leaders that are also federal candidates and communicates with the public about issues that involve them.
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OMB Watch Urges FEC to Protect Nonpartisan Issue Advocacy 09/04/2002
As the FEC considers new rules implementing restrictions on electioneering broadcasts disguised as issue ads, OMB Watch filed comments and presented testimony urging them to create exemptions that protect lobbying and policy advocacy. See our comments to the FEC and a summary of the hearing.

FEC Holds Hearings on Broadcast Regulations 09/03/2002
Last week the Federal Election Commission (FEC) held public hearings on its proposed regulations implementing the ban on broadcasts that refer to federal candidates within 60 days of an election or 30 days of a primary. The Bipartisan Campaign Reform Act of 2002 creates the new restriction on broadcasts by corporations, including nonprofits, and labor unions, but gives the FEC authority to create exemptions for broadcasts that are not related to elections. The hearing focused on how broad or narrow these exemptions should be.
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Federal Judge Holds Parts of Stealth PAC Law Unconstitutional 09/03/2002
The “Stealth PAC” law of 2000 requires political action committees (PACs) exempt under Section 527 of the federal tax code to register with the IRS and report their contributions and expenditures. (Contributions to 527 organizations are not tax dedcutible.) The National Federation of Republican Assemblies filed a constitutional challenge to the law in federal court in Alabama soon after it passed. On August 27 Judge Richard Vollmer of the U.S. District Court for Southern Alabama upheld part of the law and overturned part as unconstitutional. Read More

Church Electioneering Bill Introduced in Senate 08/19/2002
Sen. Bob Smith (R-NH) has introduced a Senate version of the "Houses of Worship Political Speech Protection Act" (S. 2886) which is sponsored in the House by Rep. Walter Jones (R-NC) (H.R. 2357). This legislation would allow churches to engage in express electoral advocacy, which is currently prohibited for all 501(c)(3) charities, including churches. Read More

FEC Releases Draft Rules on "Issue Advocacy" 08/05/2002
The second set of proposed regulations implementing this year's new campaign finance reform law will focus on "electioneering communications," also known as sham issue ads. At its August 1 meeting, the Federal Election Commission (FEC) released draft rules, which will be published in the Federal Register on August 7. Final regulations are scheduled to be ready by late September, and will become effective the day after this fall's elections. (The "electioneering communications" rules will not apply to the 2002 elections.) The FEC is required to complete all rulemaking proceedings before the end of the year.

The public comment period is extremely short, allowing nonprofits and other affected parties to comment by August 29, unless they wish to testify at the public hearing. In that case comments and the request to testify must be submitted by August 21. The hearing will beheld August 28-29 at the FEC offices in Washington.
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FEC To Publish Proposed Issue Advocacy Rule in August 07/26/2002
The Federal Election Commission (FEC) announced that it will be not be ready to consider proposed regulations on issue advocacy on July 25, as had been planned, delaying action until August 1. The Notice of Proposed Rulemaking will be published in August 8 and public comments are due August 21. A hearing will be held on August 28 and 29 at the FEC’s office in Washington. A proceeding to define illegal coordination between campaigns and donors and advocacy groups will not begin until mid-September. The Bipartisan Campaign Reform Act of 2002 (BCRA) requires that all rulemakings be completed by the end of the year.

The issue advocacy rulemaking will set regulations implementing BCRA’s ban on broadcasts by corporations and nonprofits that mention federal candidates within 60 days of an election or 30 days of a primary, and the exceptions for independent expenditures and candidate debates. The law also gives the FEC power to create additional exceptions for communications, such as grassroots lobbying messages, that are unrelated to federal elections. (Click here for more details)
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Church Electioneering Bill Gains Sponsors, IRS Issues Guidance for Religious Organizations 07/22/2002
Two bills that would allow religious congregations to endorse or oppose candidates for office and spend church funds on electioneering gained new sponsors last week, as its sponsors criticized the IRS for publishing a Tax Guide for Churches and Religious Organizations, Publication 1828, in early July. Read More