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Plugging Loopholes

April 12, 2002



REFORMERS in Congress were successful this year in ending unregulated amounts of "soft" money from flowing into federal campaign coffers after November's elections. But those who favor the money- in-politics status quo have been busily looking for ways to keep cash flowing from businesses, unions, and rich individuals – money most candidates heartily rely on.

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They wanted to make it easier to hide behind so-called "stealth" political action committees (PACs), which have tax-exempt status under Section 527 of the US tax code and, until 2000, weren't required by the IRS to disclose donations. The watchdog group Public Citizen found 25 of these PACs raised more than $67 million over the past 18 months for direct mail, phone banks, and issue ads.

Rep. Bill Thomas (R) of California, an opponent of campaign finance reform, tried this week to pass a revision in the disclosure rules for 527 PACs. Among other things, it would have made tracking donations more difficult and less public. In effect, an IRS disclosure rule for these PACs would have been diluted, creating a big conduit for soft money. His effort failed in the House, but was symptomatic of tactics being used by those opposing reform.

Despite the bill's failure, campaign finance-reform advocates must remain vigilant against those who would continue to allow private money to influence how Congress votes.

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