To: greenspirit who wrote (20504 ) 12/19/2003 3:12:38 PM From: LindyBill Respond to of 793912 Democrats' new campaign funding groups may face regulation By Sharon Theimer, Associated Press, 12/19/2003 WASHINGTON -- Democrats who have been forming groups to avoid spending restrictions in the campaign finance law may face bad news: The government's new chief election regulator is warning that their activities could be reined in. Bradley Smith, the Republican chosen yesterday as chairman of the Federal Election Commission, said he believes a recent Supreme Court ruling may require his agency to limit the groups' activities. "If so, it's a huge issue. And it means there are a lot of groups already out there that would have accepted contributions beyond their limits," Smith said. Smith, who takes over as chairman Jan. 1, said the FEC will formally decide the issue early next year when it also considers a request from a special Republican group on whether it is free to spend unlimited amounts of money promoting President Bush in the 2004 election. Several Democrats' groups, hoping to take advantage of the exemption, are raising millions they hope to spend against Bush next year. At issue is a Supreme Court ruling last week that upheld the new campaign law banning national political parties from raising corporate, union, and unlimited donations known as soft money. The law also bans outside groups from using corporate or union money to pay for ads mentioning candidates close to elections. Democrats, however, say the new law provides for an exemption for special tax-exempt political groups, known as 527s, and they formed several of them. The goal is to use the groups to help Democrats better compete with Republicans, who enjoy a significant edge in raising small contributions allowed under the law. Smith's word of caution brought an expression of surprise from Laurence E. Gold, a lawyer representing three of the new Democratic groups. "I think it would be a dramatic change in the law that can only come from Congress to do that, and that has not occurred," Gold said. Smith said that while he has not formally made up his mind, he believes the court's ruling may require the FEC to treat the new groups like regulated political committees. That would mean the groups would be limited to accepting no more than $5,000 in donations from each individual, and would be banned from taking corporate or union money. It also would require them to disclose their finances and spending to the FEC. Smith said the court ruling seems to eliminate the "express advocacy" standard, which meant the FEC could regulate groups that spent money calling for a candidate's election or defeat. If the FEC decides that the Supreme Court ruling expands its ability to regulate and limit election activities, the new groups could be forced to return the big checks they have collected. Paul Sanford of the nonpartisan Center for Responsive Politics, a campaign watchdog organization, said he agrees with Smith that the groups could be subjected to the limits.boston.com