'Stealth' ads revive efforts to change election-finance laws

You're a political candidate catching a quick bite before the first event of the day, and you notice a campaign-style ad on TV with your picture in it. It could be praising you. It could be trashing you. The point is, you likely have no idea where it came from or who is funding it. Nor does the public.

Sen. John McCain of Arizona was blindsided by such an ad campaign in the Republican presidential primary. House Rep. Marge Roukema, a 10-term GOP incumbent, was nearly defeated in last week's New Jersey primary after a similar mystery campaign.

In both cases, the ads highlight the latest legal loophole in campaign-finance law - one being increasingly put to use in Election 2000. Using a provision of the US tax code, individuals and groups are spending unlimited amounts of money, without disclosing the names of their cash cows.

Concern over this phenomenon - which critics decry as worse than the much-maligned soft-money donations to political parties - has unexpectedly revived a debate in Congress over campaign finance.

Although the House and Senate came down on opposite sides of a reform measure in separate votes last week, the rise of these "stealth" political action committees appears to have led some lawmakers to put aside partisan fighting that has stymied election-reform efforts for years.

Indeed, the House on Friday turned back a bill to require disclosure by stealth groups only after the Republican leadership promised to revisit the issue before the July 4 recess.

Thursday's Senate vote in favor of tightening regulations on stealth groups came as something of a surprise, particularly to GOP leaders who opposed the move. The vote marked the first victory for a campaign-finance overhaul measure in the Senate since 1993.

In the 1996 election cycle, big campaign contributions flowed as soft- money donations to the state or national parties, which then used the funds for "issue" ads or get-out-the-vote drives that would help their own candidates. While donors can contribute unlimited amounts of money, the parties must identify who they are.

That was then, this is now

But Campaign 2000 could signal a shift to groups organized under Section 527 of the US tax code, which are not required to disclose donors or the size of their tax-exempt gifts.

"The 1996 federal election is most commonly seen as the election that brought soft money to the public consciousness and to the policy agenda," says Francis Hill, visiting professor at the University of Pennsylvania Law School. "The 2000 federal election may be equally important in campaign-finance history for the flowering of the new Section 527 organizations."

An 'emerging abuse'

Washington-based Common Cause, a public-interest group, dubs the 527 loophole "the boldest, brashest way to evade federal campaign laws today."

"This is the emerging abuse, and if it is allowed to continue, it will make soft money look quaint by comparison," says Common Cause president Scott Harshbarger.

What troubles many lawmakers is that well-financed 527 groups could hijack the 2000 campaign and further undermine public trust in the political process.

"Money politics and secrecy is a dangerous mixture. The least we can do is address the secrecy ingredient in this potion," Sen. Russell Feingold (D) of Wisconsin said on the floor of the Senate. "There is no justification whatsoever for allowing these groups to operate under the radar. None."

For Senators Feingold and McCain, who have sponsored legislation to ban soft money altogether, the 527 provision targeted a smaller - but flagrant - problem. They hoped a win could open the door to more sweeping reforms in the future.

The new 527 groups escape control both from political parties and the Federal Election Commission. They run across the political spectrum, from peace and environmental groups to corporations and GOP consultants. Some recent examples:

*Republicans for Clean Air funded a $2.5 million ad campaign in key presidential primary states to attack McCain's environmental record. The group, whose identity came out in press reports, was funded by prominent Bush supporters.

*The Club for Growth, loosely affiliated with the libertarian Cato Institute, is targeting moderate GOP incumbents who have "veered away from the limited government agenda that got them elected to the majority in Congress."

*The Republican Majority Issues Conference, directed by fund-raisers associated with House majority whip Tom DeLay, is reportedly amassing a $15 million war chest to run issue ads this year.

*Shape the Debate, run by consultants associated with former California Gov. Pete Wilson, are running an ad campaign that charges Vice President Al Gore with "hypocrisy."

Stephen Moore, president of the Club for Growth, insists that efforts to curb such groups are simply out to protect incumbents. "I'm skeptical of campaign-finance reform when the real agenda is incumbency protection. The 527s can be a way of attacking the incumbency-protection machine.

"Forcing disclosure of 527s would have a chilling effect..., and would shut a lot of folk out of the political process," he says.

(c) Copyright 2000. The Christian Science Publishing Society