McCain, House GOP strike a BCRA deal

House Republican leaders have struck a deal with Sen. John McCain (R-Ariz.) to eliminate restrictions on coordination between national parties and federal candidates, a change in the law that would be of great benefit to the winner of the 2008 GOP presidential primary, according to congressional sources.

House Republican leaders have struck a deal with Sen. John McCain (R-Ariz.) to eliminate restrictions on coordination between national parties and federal candidates, a change in the law that would be of great benefit to the winner of the 2008 GOP presidential primary, according to congressional sources.

Republican and Democratic campaign-finance experts alike believe the change would be a boon to McCain’s campaign, if he wins his party’s nomination in three years, an outcome that political handicappers are beginning to view as a real possibility.

The House voted yesterday to attach legislation eliminating the coordination restriction to a bill limiting the activities of the soft-money groups known as 527s. The groups are named after a section of the tax code and are allowed to raise and spend unlimited amounts of money on political activities. The resulting campaign-finance package narrowly passed the House yesterday evening.

Proponents of campaign-finance regulation such as McCain, Sen. Russ Feingold (D-Wis.) and their ally Fred Wertheimer of Democracy 21 consider the lack of limits on 527s a loophole, and closing it has been a top priority for them. But eliminating limits on party expenditures coordinated with candidates has been fiercely contested in the courts for nearly 15 years.

The limit on coordination between federal parties and candidates dates from the 1970s. Repealing it would allow parties to spend unlimited amounts from their coffers to pay for candidates’ campaign expenses. For example, parties could pay unlimited amounts for candidates’ staff salaries, utility bills and campaign ads. The costs, however, would have to be paid for with so-called hard money, raised by the parties in limited increments, the only funds federal parties have been allowed to raise since 2002.

Eliminating the coordination limit would be especially helpful to the Republican presidential nominee in 2008 because the Republican National Committee (RNC) has a huge fundraising advantage over its Democratic counterpart, greater than the disparity between the Republican and Democratic fundraising committees affiliated with the Senate and House.

The RNC has raised $130 million so far this election cycle and has nearly $41 million in its war chest. The Democratic National Committee (DNC) has raised $67 million since the beginning of 2005 and has only about $9 million in the bank.

“It’s obviously going to help the Republicans more — they have more money — unless the Democrats can play catch-up,” said Ken Gross, a campaign-finance expert with the law firm Skadden, Arps, Slate, Meagher & Flom.

Aides to McCain did not immediately respond to requests for comment.

Marc Elias, a campaign-finance expert at the firm Perkins Coie who also served as counsel to the presidential campaign of Sen. John Kerry’ (D-Mass.), said that Republicans have been trying for nearly 15 years to roll back the limits on coordinated expenditures and that doing so would benefit whoever turns out to be the GOP presidential nominee in 2008.

“Historically the RNC has been able to seriously outraise the DNC in hard money. You’re seeing it right now,” Elias said. “The ability to spend unlimited amounts of money on behalf of a party’s own candidate becomes an advantage to whatever party has more money.”

“The timing is certainly curious because, indeed, he has been widely reported as contemplating a presidential run,” Elias said, referring to McCain.

But legislation restricting the activities of 527s and allowing unlimited coordination between federal parties and candidates will face a steep uphill climb in the Senate. Democrats as a bloc are expected to oppose it because their party is perceived to have benefited more than the GOP from the work of 527 groups. The boost that unlimited coordination would give to the Republican presidential nominee makes it even less appealing.

House sources including Rep. Vernon Ehlers (R-Mich.), chairman of the Committee on House Administration, which has jurisdiction over campaign-finance reform, said that National Republican Congressional Committee Chairman Tom Reynolds (R-N.Y.) negotiated 527 reform with McCain.

Reynolds demurred on the question of whether he was the point man in the discussions but said he had discussed 527 regulation with McCain.

Reynolds emphasized that House legislation would not increase the aggregate limits on political giving but said that he wants to eliminate the strict caps on coordination between parties and candidates. Reynolds said that the rule separating candidates from their parties is bad policy and that McCain generally agreed with him about that and the need to close the so-called 527 loophole.

“Generally, we see a loophole with 527s,” Reynolds said about his and McCain’s views on the subject. He also noted that they agree that candidates should be able to communicate with parties and that penalties against such communication are “not in the best interest of a candidate and his party.” 

To illustrate his point, Reynolds noted that violating the current rules on coordination is a felony.

Under those rules, the House party committees can only coordinate about $80,000 in expenditures with a candidate, barely enough to pay for a short series of TV ads in many races. Meanwhile, the national party committees can only coordinate about $15 million worth of expenditures with their presidential nominees.

McCain and the other authors of the Bipartisan Campaign Reform Act of 2002 could have overturned the strict limit on coordination between parties and candidates when they crafted their legislation but decided against it.

McCain signaled his willingness to support repealing the limit on coordinated expenditures shortly before the March recess when he introduced an amendment to the lobbying reform bill then on the Senate floor. His amendment on 527 groups, introduced March 8, included an overlooked provision repealing the “limit on amounts of party expenditures on behalf of candidates in general elections.”

The provision was not included in legislation that McCain offered at the beginning of 2005 curbing the activities of 527s.

Campaign-finance legislation passed the House yesterday despite the objections of conservatives such as Rep. Mike Pence (R-Ind.), chairman of the Republican Study Committee, a conservative group. Pence said he could not support the bill because it gave McCain 100 percent of the 527 reform he wanted and gave himself only 2 percent of the campaign-finance legislation he sponsored with Rep. Albert Wynn (D-Md.).

Part of that 2 percent is the elimination of the limits on coordinated expenses, which was part of the Pence-Wynn measure.

Pence said he would oppose the overall 527 bill because he is against curbs on free speech, reciting an old saying he often heard uttered by his father, Lt. Ed Pence, a Korean combat veteran.

“I may disagree with everything you say, but I’ll fight to the death to defend your right to say it,” Pence said.