The Senate has passed a bill requiring certain tax-exempt groups that raise and spend money on political activities to reveal their donors and their expenditures, the New York Times reported June 29.
President Clinton said he would sign the bill into law, making it the first important change in U.S. campaign finance law since 1979.
Supporters hailed the law as a major victory over the congressional Republican leaders who had tried to block it, but acknowledged that the measure may have come too late to have much effect on the current campaigns.
The groups in question – those formed under section 527 of the Internal Revenue Code – may avoid the new disclosure requirements by reorganizing as for-profits and losing their tax exemptions, or as other kinds of nonprofits.
Some donors may also rush big contributions to the groups before the new law takes effect.
Texas Governor George W. Bush issued a statement applauding the bill’s passage. During the primary season, however, one of Bush’s longtime supporters set up a Section 527 group that spent $2.5 million on issue advertisements criticizing Senator John McCain’s environmental record.
McCain championed the Senate bill, and promised to continue his opposition to eliminate the unlimited donations called soft money.
A wide variety of political players have created Section 527 committees, including liberal interest groups, wealthy individuals and a conservative group aligned with House Majority Whip Tom DeLay.
The groups use donations for polling, advertising, telephone banks and direct-mail appeals, but are not subject to federal filing or reporting rules as long as they don’t campaign for a specific candidate.
The bill approved by Congress requires the committees that raise more than $25,000 a year to file tax returns and comply with federal campaign law. Section 527 groups will have to disclose donors who gave more than $200 and report any expenditures of more than $500.
The information will be made public and posted on the Internet.
For full text, go to the New York Times.