The Campaign Finance Institute styles it a “debate,” and a press conference yesterday, held as a “working paper” was released, was meant to get things going. The issue is “Nonprofits in Federal Elections.”  CFI has concluded that it is not enough to worry about “527s,” but that a more “holistic” approach is necessary in tracing the ways that money, big money, flows within networks of nonprofit organizations.  Stephen R. Weissman and Kara D. Ryan, “Non-profit Interest Groups’ Election Activities and Federal Campaign Finance Policy:  A CFI Working Paper” (2006) at 33.  501(c) organizations establish 527s, and some also maintain PACs, while some have both; and when each and every one of the activities is accounted for, the “network” established by environmentalists, gun-owners, businesses or some such interest has amassed the potential for great “influence.”

     CFI’s uneasiness about this state of affairs is all the more notable because it is not crying out against “circumvention,” as legally defined.  While it complains that existing law is wanting in different ways—in clarity and also in enforcement—it mostly concedes that the various entities are operating within the relevant legal frameworks.  Using the monies allowed to them, within the constraints of law, PACs support candidates and parties directly while (c) organizations help them more indirectly, by influencing opinion in their favor and mobilizing voters on issues.  All is in order, which is why CFI frames its inquiry as one of “policy”:  “These findings lead to a…policy question:  Does increased financial influence in elections by the group, and its donors, lead to ‘undue influence’ (or its appearance) over elected representatives.”  Id. at 11.  Later, again: “we believe it is necessary to conduct the debate and explore the policy alternatives on a terrain that goes beyond the intellectual straightjacket of legal categories established 30 years ago.”  Id. at 32. 

     In CFI’s analysis, law, shaped by various reforms over the years, has become a “straightjacket,” id. at 32, clouding the vision needed for sound “policy”-making.  For nonprofits, having escaped a first assault in 2004 when the 527 “debate” first opened, it was certain that another push to convert them into a “policy” problem would come, sooner or later.  CFI now would change the definition of the problem, laying aside the charge that nonprofits are acting, illegally, like “political committees” and picking up the theme that they are questionably associating with political committees.  Deepening the suspect association is the behavior of donors, many of whom contribute at the same time to nonprofits, candidates and parties.  Nonprofit networks are influence networks, a policy problem of appearance and maybe also, though less clearly, in fact. 

    “Influence,” at the center of its analysis, is not treated seriously by CFI, which does not bother to define how we would recognize it when it rises to the level of a problem.  It seems reasonable to ask:  when does, say, an environmental network, pressing for “influence” on clean air or climate change policies, become through this effort a “policy “ problem?  In a technique it has used before, CFI deploys raw numbers, expressing the volume of dollars spent, to carry the argument.  Numbers are spread throughout the study, a show of force intended to impress upon the reader the conclusion that this amount of money—millions and millions—must translate into a great deal of influence of the “undue” variety.  Nonprofits might well hope so but they are now on notice that success, or seeming progress in that direction, brings its own risks. 

     In terms more specifically geared to the pending Congressional action (or inaction) on 527s, the CFI study deals with the question of whether action on 527s might force these activities, now disclosed to the IRS, into the more closed world of (c) organizations.  CFI suggests that this might happen.  It implies that this would be tolerable, although it would also be, to the affected organizations, taxable.  Forcing organizations to conduct these political activities on a taxable basis is not among the policy issues selected by CFI for examination.  In fact, among its complaints about existing enforcement, CFI is unhappy that the IRS is failing to ferret out all the allegedly political and taxable activities now conducted by (c) organizations.

     CFI would have the “debate” on campaign finance reform branch out from the world of candidates and parties to that of actors outside the formally regulated process, such as nonprofits.  The era of “circumvention” would pass and a new era, of policy debate about “influence,” would take its place.  Freed from the obligation to allege or show that the law is being shirked or violated, policy-makers can call for “debate” on questions of “policy” constructed around the notion that some outside “influence” over opinion is simply more than a government should be expected to bear.

      Along these lines, the report offers a little morality tale, though the authors might not see it that way, about the experience of the National Right to Life Committee.  In 2000, the authors relate, the NRLC “ran a controversial radio ad concerning presidential candidate John McCain’s position on campaign finance reform during the…New Hampshire primary.”  But “today that ad would be subject to BCRA’s restrictions on ‘electioneering communications’.”  Id. at 19.  That McCain:  he sure showed them.  Let that stand as a warning to all others tempted to be similarly audacious:  you, too, could become a “policy” problem and will be dealt with accordingly. 

Bob Bauer