Campaign Finance Bills in the 105th Congress: Comparison of H.R. 2183 (Hutchinson-Allen), H.R. 3526 (Shays-Meehan), and Current Law

98-409 GOV Updated July 22, 1998 CRS Report for Congress Received through the CRS Web Campaign Finance Bills in the 105th Congress: Comparison of H.R. 2183 (Hutchinson-Allen), H.R. 3526 (Shays-Meehan), and Current Law Joseph E. Cantor Specialist in American National Government Government Division Summary As pledged by Speaker Gingrich, the House renewed consideration of campaign finance reform in May 1998. The principal bill is H.R. 2183, known as the freshman bipartisan bill, introduced July 17, 1997, by Messrs. Hutchinson and Allen. Selected floor amendments and substitutes will be in order. The legislation that has generated the most publicity in the 105th Congress has been the McCain-Feingold bill (S. 25), offered on March 19, 1998, as H.R. 3526 by Messrs. Shays and Meehan;1 this has also been offered as substitute amendment no. 13 to H.R. 2183 in the current debate. Table 1 highlights key differences between the two bills, and Table 2 summarizes and compares H.R. 2183, H.R. 3526, and current law. Table 1. Key Differences between Freshman and Shays-Meehan Billsa Subject Party soft money Freshman bill Ban inter-state party transfers Non-party soft money No provision Shays-Meehan Ban state party soft money spending on certain activities at some times * Codify Beck decision * Increase disclosure * No party funds to taxexempt groups 1 The McCain-Feingold legislation has been revised twice in the 105th Congress. The first revision (September 29, 1997) was the subject of three failed cloture votes in the fall of 1997, on October 7, 8, and 9. The second revision (February 1998) was in the form of a floor amendment (to S. 1663), as modified by the Snowe-Jeffords amendment. (A cloture vote on this version failed in the Senate February 26, 1998.) The Shays-Meehan bill is based on the current version of S. 25, considered by the Senate in 1997, not February’s modified floor amendment. Congressional Research Service ˜ The Library of Congress CRS-2 Subject Issue advocacy Hard (federal) money Wealthy candidates Independent expenditures Foreign nationals Fed. bldg. ban on fundraising Enforcement Freshman bill Disclosure only (of expenditures, not sources of funds) * No party coordinated expenditure limits * Double individual aggregate limit * Index contribution limits No provision Shays-Meehan Redefine express advocacy (apply all fed. limits, prohibitions & disclosure) Minor increases in limits on individual giving to parties No provision No party spending for candidate over $50,000 * Tighten definitions * Ban party independent & coordinated spending for same candidate Ban party soft money from foreign nationals Include soft money in ban No provision Increase FEC authority No provision No provision Table 2. Comparison of H.R. 2183, H.R. 3526, and Current Lawa Current law Contribution limits not inflation-indexed To state & local parties: $5,000 per year To national party: $20,000 per year Aggregate annual limit: $25,000 to parties, candidates, & PACs Contribution limits not inflation-indexed Coordinated expenditures Party spending for general election candidates limited (1998: House race=$65,100; $130,200 in 1-district state) H.R. 2183 (Hutchinson-Allen) SOURCES OF FUNDS PACs Indexes limits by CPI every presidential election year, rounded to nearest $100 Individuals No provision H.R. 3526 (Shays-Meehan) No provision $10,000 per year $25,000 per year No provision $25,000 to all party committees, plus $25,000 to candidates & PACs Indexes limits by CPI every presidential election year, rounded to nearest $100 Parties Repeals coordinated expenditure limits $30,000 No provision No provision CRS-3 Current law Contribution limits not inflation-indexed No limits on candidate spending from personal funds H.R. 2183 (Hutchinson-Allen) Indexes limits by CPI every presidential election year, rounded to nearest $100 Candidates No provision H.R. 3526 (Shays-Meehan) No provision Bans party coordinated expenditures for House general election candidates who exceed $50,000 volunt. limit on personal/family funds; fines candidates who pledge to abide & exceed Law bans personal use of No provision Codifies regulations on campaign funds, as defined in permissible use of campaign FEC regulations funds INDEPENDENT EXPENDITURES Prohibits cooperation & No provision Tightens definition of what coordination of spenders with constitutes coordination & candidates cooperation Requires filing within 24 No provision Increases frequency of hours of $1000+ in last 20 disclosure of large amounts days of election close to election Based on 1996 Colorado No provision Bans parties from making ruling, parties may make both coordinated & indepindependent expenditures for endent expenditures for a candidates (no limit) general election candidate SOFT MONEY Party soft money No limits on national party Bans national parties from Bans national parties from receipt of soft money soliciting, receiving, soliciting, receiving, directing, transferring, or directing, transferring, or spending soft money spending soft money State parties must follow No provision Bans state/local party soft allocation formulas in FEC money for federal election regulations for determining activity: registration drives in appropriate share of hard & last 120 days of fed. election; soft money for mixed voter ID, get-out-the-vote (federal-state-local) activities drives, & generic activity if federal candidate on ballot; & messages referring to fed. cand. with intent to influence election; allows soft money on solely non-federal activities Inter-state transfers Bans transfers of nonNo provision No provision federally-permissible funds between state parties No provision No provision Bans use of soft money to raise funds CRS-4 Current law Disclosure by national parties (1991 FEC regs.) Contributions to party building funds are exempt from contribution definition No provision Per Beck & other rulings, dues-paying non-union members have right to deny political use of their funds No union or corporate disclosure for exempt activities, except for express advocacy internal communications above $2,000 per election No provision FECA NOT APPLICABLE * Full coverage (disclosure, source limits, prohibitions) Based on court rulings, only spending on communications that use express advocacy language (e.g., “vote for” or “defeat”) are subject fully to FECA H.R. 2183 (Hutchinson-Allen) No provision No provision Candidate soft money raising Bans fed. candidates or officials raising: soft money for fed. elections; money from sources beyond fed. restrictions in nonfed. races; & soft money for messages referring to fed. candidates Exempts federal officials’ own non-federal races Exempts attendance at state party events in home state Non-party soft money No provision No provision Tax-exempt activity No provision ISSUE ADVOCACY No provision H.R. 3526 (Shays-Meehan) Codifies & increases disclosure requirements Removes building fund exemption for national parties Prohibits federal candidates & officials from raising soft money for federal election activity (see above) Exempts federal officials’ own non-federal races Exempts attendance at state party events Requires union adequate notice to dues-paying nonmembers of rights to deny political use of funds Requires disclosure of all exempt activities (but incl. only those internal communications that refer to fed. candidates), once over $50,000 aggregate per year Bans party fundraising or giving to tax-exempt groups Expands express advocacy definition (hence triggers full FECA coverage) as communication 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 unambiguous advocacy, taken as whole with limited reference to external events CRS-5 Current law * Disclosure rules None Expenditure defined in FECA as money spent to influence a federal election H.R. 2183 (Hutchinson-Allen) Requires disclosure of expenditures on radio or TV communications referring to House/Senate candidates (by name, representation, or likeness), once over $25,000 for 1, or $100,000 for all, candidates per year Exempts corporate/union member communications & nonpartisan voter drives No provision H.R. 3526 (Shays-Meehan) Requires full disclosure of spending & receipts, as FECA-covered activity Exempts nonpartisan voter guides Amends definition to incl. payment for message with express advocacy, or that refers to clearly identified candidate, is coordinated, & seeks fed. election influence FOREIGN NATIONAL MONEY Bans contributions & No provision Bans direct or indirect foreign fundraising from foreign national contributions, nationals in connection with including soft money, in U.S. elections; exempts connection with any election permanent resident aliens (leaves green card exemption (with green cards) in law) FEDERAL ELECTION COMMISSION Disclosure Optional electronic filing Requires electronic filing by Requires electronic filing by all committees above $50,000 all committees over FEC-set in receipts & expenditures per level, with 24-hour Internet year, using FEC-provided free posting software Timing of candidate reports Require monthly reports in No provision In election year: quarterly, election year, but in lieu of pre-primary, pre- & postNov. & Dec. reports, require general election pre- & post-general & yearend reports Timing of non-candidate Require monthly, preNo provision reports primary, & pre- & postIn election year, either: (1) general election reports in quarterly, pre-primary, & pre- election year, but in lieu of & post-general election; or Nov. & Dec. reports, require (2) monthly, with pre- & post- pre- & post-general & yeargeneral & year-end reports in end reports lieu of Nov. & Dec. Itemization requirements Excludes best efforts - Bans candidate deposit of Contributions of over $200 exemption regarding over $200 contributions must incl. name, address, identification of occupation & without required ID occupation, & employer, employer, for contributions - Lowers itemization unless best efforts are made aggregating over $200 per threshold to $50 for to obtain information year contributions CRS-6 Current law FEC may audit only if it has reason to believe a violation occurred FEC may initiate enforcement action with “reason to believe” a violation may have occurred Penalties: maximums are prescribed in election law Law specifies timetable for enforcement actions FEC may refer suspected violations to Justice Dept. only if probable cause to believe a violation has occurred Bans solicitation of campaign funds, as defined, from federal govt. buildings Bans House franked mass mailings 90 days from election Requires disclaimers on broadcast & print ads No provision a H.R. 2183 (Hutchinson-Allen) Enforcement No provision No provision No provision No provision No provision MISCELLANEOUS No provision No provision No provision No provision No provision No provision No provision No provision Abbreviations used in these tables: CPI = Consumer Price Index FEC = Federal Election Commission FECA = Federal Election Campaign Act ID = identification PAC = Political Action Committee H.R. 3526 (Shays-Meehan) Allows random audits of campaigns within 12 months after election Changes FEC criterion to “reason to investigate” standard - Increases penalties for violations - Allows automatic late filing penalties - Allows equitable remedies in conciliation agreements Expedites FEC enforcement procedures late in election Allows FEC referrals at any time Includes raising soft money in ban on solicitation from government buildings Bans franked mass mailings in Member’s election year Enhances disclaimer requirements Bans false representation to raise funds Bans non-candidate comm. use of candidate names Bans donations by those 17 years & younger