Campaign Finance Reform Bills in the 105th Congress: Comparison of H.R. 3485 (Thomas), S. 25 (McCain-Feingold), and Current Law

98-287 GOV Updated March 30, 1998 CRS Report for Congress Received through the CRS Web Campaign Finance Reform Bills in the 105th Congress: Comparison of H.R. 3485 (Thomas), S. 25 (McCain-Feingold), and Current Law Joseph E. Cantor Specialist in American National Government Government Division Summary The House plans to consider campaign reform legislation—H.R. 3485 (Thomas)—reported by the House Oversight Committee on March 18, 1998. A proposed amendment, to be offered by Mr. Thomas on March 30, would add restrictions on state party soft money spending and drop coverage of non-profit groups from the prohibition on involuntary use of funds for political purposes. The bill that has generated the most publicity in the 105th Congress is S. 25 (McCain-Feingold), as revised September 29, 1997,1 introduced in the House as H.R. 3526 (Shays-Meehan). This report summarizes and compares H.R. 3485 with amendment, S. 25 as revised (H.R. 3526), and current law. Table 1. Comparison of H.R. 3485, S. 25, and Current Law Current law No provision H.R. 3485 (Thomas), with amendment SOURCES OF FUNDS PACs Protects confidentiality of small donors or decliners to union or corporate PAC solicitations S. 25 (McCain-Feingold)/ H.R. 3526 (Shays-Meehan) No provision 1 Cloture votes on S. 25 failed in the Senate on October 7, 8, and 9, 1997. In February 1998, the bill was offered as a floor amendment to S. 1663 (Lott) and further modified by the Snowe-Jeffords amendment; a cloture vote on this new version of the McCain-Feingold bill failed in the Senate February 26, 1998. This report is based on the current version of S. 25, not the modified floor amendment of February, and the identical H.R. 3526. Congressional Research Service ˜ The Library of Congress CRS-2 Current law H.R. 3485 (Thomas), with amendment S. 25 (McCain-Feingold)/ H.R. 3526 (Shays-Meehan) Individuals To candidates: $1,000 per election To state & local parties: $5,000 per year To national party: $20,000 per year Aggregate annual limit: $25,000 Limits not indexed for inflation $2,000 per election No provision $15,000 per year $10,000 per year $60,000 per year No provision $75,000 Indexes limits to 1999 base $30,000 No provision Parties To candidates: $5,000 per election Limits not indexed for inflation No limits on candidate spending from personal funds Law bans personal use of campaign funds, as defined in FEC regulations $15,000 per election Indexes limits to 1999 base Candidates If candidate exceeds individual limit, up to $150,000, in House general election: Lifts party contribution limit for opponent, up to amount above individual limit If candidate exceeds $150,000 in House general election: Lifts party & individual contribution limits (incl. aggregate annual limit) & raises PAC limit by 10 times for all candidates, up to amount over $150,000 If candidate exceeds $150,000 in House primary election: Lifts individual contribution limit (not incl. aggregate annual limit) & raises PAC limit by 10 times for all candidates, up to amount over $150,000 No provision No provision No provision Prohibits party coordinated expenditures for Senate (or House) general election candidate who exceeds voluntary limit of $50,000 in personal & family funds Codifies regulations on permissible use of campaign funds CRS-3 Current law No limits on national party receipt of soft money State parties must follow allocation formulae in FEC regulations for determining appropriate share of hard & soft money for mixed (federalstate-local) activities No provision Disclosure by national parties since 1991 FEC regulations Contributions to party building funds are exempt from FECA definition of contribution No provision Under Beck and other court rulings, dues-paying nonmembers have right to disallow political use of their funds No provision No provision H.R. 3485 (Thomas), with amendment SOFT MONEY Party soft money Bans national parties from soliciting, receiving, directing, transferring, or spending soft money - Bans use of soft money by state parties on mixed activities, aimed at influencing federal and non-federal elections (e.g., voter registration, get-out-the-vote drives, and general political advertising) - Bans transfers of nonfederally-permissible funds between state parties No provision No provision No provision Candidate soft money raising Bans federal candidates & officials raising: soft money for federal election; money from sources beyond federal restrictions in non-federal races; & soft money for messages that identify federal candidates; exempts attendance at state/local party fundraisers in home state Non-party soft money Requires pre-authorization for unions’ political use of dues, fees, or payments from members or non-members Requires pre-authorization from corporate & national bank employees & stockholders for political use of dues, fees, or payments as condition of employment Corporate stockholders may withhold % share of stocks used for expected political spending, per annual notice S. 25 (McCain-Feingold)/ H.R. 3526 (Shays-Meehan) Bans national parties from soliciting, receiving, directing, transferring, or spending soft money - Bans state/local parties from spending soft money for: registration drives in last 120 days of federal election; voter ID, get-out-the-vote drives, & generic activity if federal candidate is on ballot; & messages that refer to federal candidate with intent of election influence - Allows soft money on solely non-federal activities No soft money to raise funds Codifies & increases disclosure requirements Removes building fund exemption for national parties Prohibits federal candidates & officials from raising soft money for any federal election activity; exempts attendance at state/local party fundraisers Requires unions to notify duespaying non-members (Beck workers) of rights to disallow political use of their funds No provision No provision CRS-4 Current law H.R. 3485 (Thomas), with amendment No union or corporate disclosure for exempt activities, except internal communications above $2,000 per election No provision No provision Denies public funding to presidential candidates who raise soft money Tax-exempt activity No provision No provision Based on court rulings, only spending for communications that use express advocacy language (e.g., vote for, defeat) are subject to disclosure rules, source limits & prohibitions of FECA Expenditure defined in FECA as money spent to influence a federal election Prohibits cooperation and coordination of independent expenditures with candidates Based on 1996 Colorado ruling, parties may make independent expenditures for candidates (without limit) Requires prompt disclosure in last 20 days of election ISSUE ADVOCACY Requires FEC disclosure of spending and sources of funds for communications that identify federal candidates or parties within 90 days of election, over $250 threshold S. 25 (McCain-Feingold)/ H.R. 3526 (Shays-Meehan) Requires disclosure of exempt activities (incl. internal communications referring to federal candidate only), above $50,000 per year No provision Bans parties from raising money for or giving to taxexempt groups - Defines express advocacy, as communications for or against candidate by explicit language that in context can have no other reasonable meaning; paid broadcast citing a candidate within 60 days of election, or unmistakable, unambiguous election advocacy, taken as a whole, with limited reference to external events - Voter guide exemption No provision Amends definition to incl. payment for message with express advocacy, or refers to clearly identified candidate (coordinated), to influence federal election INDEPENDENT EXPENDITURES No provision Tightens definition of what constitutes coordination and cooperation No provision Prohibits parties from making both coordinated and independent expenditures for a general election candidate No provision Augments disclosure of large expenditures near election CRS-5 Current law H.R. 3485 (Thomas), with amendment S. 25 (McCain-Feingold)/ H.R. 3526 (Shays-Meehan) FOREIGN NATIONAL MONEY Federal law ban contributions - Ends green card exemption Bans direct or indirect foreign from foreign nationals or - Bans foreign national national contributions, raising such funds in independent expenditures or including soft money, in connection with U.S. elections; soft money donations connection with any election exempts permanent resident - Doubles penalties for aliens (with green cards) violations FEDERAL ELECTION COMMISSION Disclosure Optional electronic filing Requires electronic filing by Requires electronic filing by all committees above $50,000 all committees above FECper year determined level, with Internet posting within 24 hours No provision Candidates may disclose all No provision activity in 24 hours in last 90 days; prompt Internet posting Candidates must disclose in 48 Candidates must make such No provision hours $1000+ contributions in notice within 24 hours last 20 days of election Independent expenditures of FEC must receive such notices No provision $1000+ must be disclosed in within 24 hours of being made 24 hours in last 20 days Candidate disclosure on Candidate disclosure on No provision calendar year basis election cycle basis No provision Requires reports on payments No provision of $500+ by secondary payees Law requires post-election Requires aggregate totals No provision reports through election on reports Contributions of $200+ must Requires candidate reports to - Prohibits candidates from incl. name, address, show cumulative amounts depositing contributions over occupation, & employer; best received from itemized $200 without required ID efforts required to obtain contributors - Lowers itemization threshold information to $50 for contributions No provision Requires disclosure of push No provision polls within 90 days of election if results are not made public FEC may audit only if it has No provision Allows random audits of reason to believe a violation campaigns within 12 months occurred after election Enforcement Ambiguities in law may be - Allows written responses to No provision clarified through FEC advisory written requests where law is opinions, issued with majority unambiguous support of commissioners - Requires FEC to publish & index responses - Provides safe harbor protection for anyone acting in good faith, based on response FEC required to notify object Enhances notice with assertion No provision of a complaint that object of complaint has not been found guilty CRS-6 Current law H.R. 3485 (Thomas), with amendment FEC may initiate enforcement action with “reason to believe” a violation may have occurred Penalties: maximums are prescribed in election law Changes FEC criteria to “reason to investigate” standard Indexes penalties for inflation Law specifies timetable for enforcement actions FEC may refer suspected violations to Justice only if probable cause to believe a violation has occurred No provision No provision FECA bans solicitation of campaign funds, as defined, from federal govt. buildings No provision Imposes penalties on publiclyfunded presidential candidates who evade voluntary spending limits and, in general election, raise private funds Bans cash contributions over $100 Bans House franked mass mailings 90 days from election Requires disclaimers on broadcast and print ads No provision No provision MISCELLANEOUS Barriers to vote fraud: - Pilot programs on voter eligibility confirmation - Incl. citizenship & naturalization information on registration forms (unless waived by states) - Allows address checks on recent non-voters No provision Push poll sponsors must identify selves to respondents Increases fines on presidential candidates seeking to evade spending limits by raising nonpublic funds Bans receipt of such contributions No provision No provision No provision No provision No provision No provision No provision S. 25 (McCain-Feingold)/ H.R. 3526 (Shays-Meehan) Changes FEC criteria to “reason to investigate” standard - Increases knowing and willful violation penalties - Automatic late filing penalties - Equitable remedies in conciliation agreements Expedites FEC enforcement procedures late in election Allows FEC referrals at any time No provision Includes raising soft money in ban on solicitation from government buildings No provision No provision No provision Bans franked mass mailings in Member’s election year Enhances disclaimer requirements Bans false representation to raise funds Bans non-candidate committee use of candidate names Bans donations by individuals 17 years & younger