Revolving door on loopholes


Campaign finance and advertising rules have been in flux ever since enactment of the McCain-Feingold Bipartisan Campaign Reform Act (BCRA) was passed, as the FEC struggled to transform the BCRA into actual regulations and various segments have been challenged and reversed in the courts. The big loophole from 2004, 527 organizations like and Club for Growth has not only been closed, groups operating under what seemed to be the rules of the road for 527s have been getting nailed with huge fines for behaving, in fact, like political action committees (PACs). The latest is The Media Fund, which used soft money donations from unions or corporations prohibited from contributing to a PAC. In fact, that’s where 93% of its funding came from, and it’ll cost TMF 580K.

Meanwhile, a new huge loophole has been opened, thanks to this year’s Supreme Court ruling on the Wisconsin Right to Life case. Groups wishing to buy time or space to discuss political issues may do so at will whether there is an election going on or not. WRtL wanted to run ads seeking Senate support for the judicial nominations of President Bush within the pre-election black-out period, and they wanted to specifically mention Russ Feingold (D-WI). Proponents of BCRA deemed such ads to be a thinly-veiled attack on Feingold, but the Supremes held that WRtL was within its rights to discuss the issue, even though there were no judicial nominations before the Senate at that time.

RBR/TVBR observation: So 527s are out, but any group or individual with money and a bone to pick can buy time or space whenever they want, so long as they address an "issue" and do not advocate the election or defeat of any specific candidate. It remains to be seen if this will result in another opening of the campaign cash floodgates — odds are it will.