Campaign finance laws sidestepped Funding disclosure key to informing voters

AUGUSTA – Maine is a battleground state in the presidential campaign, and the 2nd Congressional District has been targeted by both major parties. There also are two controversial ballot questions slated for November.

Loopholes in the campaign finance laws, however, mean you may never know who spent how much to support or defeat a candidate or issue.

Some committees that support specific candidates or issues can hide the source of their contributions until after the campaigns are ended.

“These committees, the 527s and others, are really political committees that raise and spend money outside of the usual campaign finance reporting laws,” Sandy Maisel, a government professor at Colby College in Waterville, said recently. “The problem we face is that the campaign finance lawyers seem to be smarter than campaign finance reformers.”

Candidates for federal office are required to file reports regularly, sometimes even daily if they reach a certain threshold of spending or contributions, with the Federal Elections Commission, disclosing who is contributing to their campaigns. In Maine, candidates must follow similar regulations and file with the Maine Ethics Commission.

But groups created under provisions of the federal tax code and known by the section of the code under which they were formed, do not.

“The key is timeliness,” Maisel said. “It’s not that these groups do not have to report; it’s that they do not have to report in a timely manner so citizens can know who is contributing to the committee and how that money is being spent.”

A 527 committee, first used in a Maine election in 2002, is allowed to raise unlimited amounts of what is called soft money. The committees must file quarterly, which gives them an opportunity to avoid disclosing contributions an election.

The committee cannot directly urge voters to support or defeat an individual candidate, but experts say voters get the message of what the ads are trying to convey without the explicit message.

Hard money is funds that have contribution limits under election law, but soft money has no limits on contributions.

For example, wealthy businessman George Soros of New York has acknowledged giving tens of millions of dollars to several groups with the goal of defeating President Bush. There are many examples of wealthy Republican businessmen giving to soft money groups as well.

America Coming Together, formed to defeat Republicans and elect Democrats, is one of the organizations Soros is supporting with a $10 million contribution. Its only Maine office is in Lewiston, and the organization has four full-time staffers.

In addition to these 527 committees, there are the 501 committees that have even fewer disclosure requirements and need to file only once a year. Traditional 501 committees include groups such as the National Rifle Association and the Sierra Club. These groups run ads based on the narrow issues of importance to their members.

Recently, however, a new type of committee has been organized under the 501 section of the tax laws that advocates on a broad range of issues, and these committees don’t have to disclose who their donors are – only how much they have spent after the campaign is over.

The committees defeat the purpose of the campaign finance laws designed to allow voters to know who is spending money to support or defeat a candidate or issue before they cast their vote, U.S. Sen. Susan Collins said last week.

“I have called upon the FEC to act and to act immediately,” the Maine Republican said. “Unfortunately the FEC, in March, delayed a decision until August. I think it unfortunately shows the FEC does not have the willpower to act on it this year.”

Collins, along with other lawmakers and several reform groups, urged the FEC to declare that the groups are under its jurisdiction and require them to file reports on the same basis as other political committees.

“There is going to be a ton of money spent in the state of Maine,” U.S. Rep. Michael Michaud said recently. “I think the public has a right to know who is spending money in Maine. In my race last time, there was some $6 million dollars spent on both sides, and I think it will be more this time and some of it will be from these groups.”

And it is not just federal candidates who could be helped, or hurt, by the expenditures of these independent groups.

State candidates or ballot issues could be targeted as well.

“I am not sure there is anything we can do, but we are sure going to see if we can,” Jim Donnelly, chairman of Maine’s Ethics Commission, said last week. “Sunshine is what disclosure is, and if these other groups are trying to hide their spending, they are at least giving the impression there is something to hide.”

Donnelly acknowledged that even though the commission has subpoena power, it may be difficult to compel an out-of-state-based campaign group to disclose its expenditures in the state without a legal battle. He said it also could throw a monkey wrench into the Clean Elections law.

“If we can’t compel these groups to disclose, clean candidates may well be put at a disadvantage,” he said.

Under the state taxpayer-funded election system, called the Clean Elections Act, a candidate who runs under the provisions of the law gets a fixed amount of funds to run his or her campaign. If an opponent exceeds the limit set in the law, the commission can authorize additional funds partially to level the playing field.

“It is going to be very difficult for us to determine what level of matching funds a candidate should get,” Donnelly said. “This is going to be a serious issue.”

Maisel of Colby College said lawmakers at both levels of government should act to require the groups disclose in a timely manner where they get their money and how the spend it. He said while courts have struck down limits on spending, they have upheld the disclosure requirements.

“I don’t think there is any possibility it will be fixed for this election cycle,” he said.” But it’s got to be fixed.”