House caps contributions to groups

The '527' groups use voter mobilization to influence federal elections.
WASHINGTON (AP) -- The House voted Wednesday to limit the multimillion-dollar donations to nonprofit groups that changed the face of American politics in the 2004 presidential election.
Majority Republicans said they were closing what they contended was a gaping loophole. Democrats portrayed the vote as an effort to undercut their supporters.
Republican support carried the day in the 218-209 vote to cap contributions to "527" political groups. The outcome was a sharp turnaround from 2002, when Republicans resisted the successful Democratic-led legislation to limit campaign spending.
The flow of unregulated contributions "still dominates the political landscape," said Rep. David Dreier, R-Calif. Urging constraints on the nonprofit groups that overwhelmingly favored Democratic causes in 2004, he said, "Now it's going to 527s instead of the political parties."
Protest by Dems
Democrats protested that Republicans were interested mainly in protecting their fund-raising edge. "Today the Republicans are doing what they so often do. They are trying to gag their opponents and further empower their supporters," said Democratic Whip Steny Hoyer of Maryland.
The "527" refers to a section of the tax law. These groups are tax-exempt organizations that use voter mobilization and issue advertisements to influence federal elections.
They blossomed after a campaign finance law in 2002 banned federal candidates and the national parties from accepting unlimited donations from individuals, unions and corporations.
The legislation would require such to abide by the contribution limits imposed on other political committees.
Donors could contribute only $25,000 a year for partisan voter mobilization activities and $5,000 a year for direct expenditures on federal elections.
During the 2003-04 election cycle, businessman George Soros gave more than $23 million to Democratic-aligned 527 groups such as Media Fund and America Coming Together. Houston homebuilder Bob Perry contributed more than $8 million specifically to help the Swift Boat Veterans for Truth group that questioned the Vietnam War record of Massachusetts Sen. John Kerry, the Democratic presidential nominee.
These 527 groups raised more than $400 million in 2003-04, with organizations supporting Kerry or opposing President Bush bringing in $266 million, according to the Political Money Line campaign finance tracking service.
Democrats claim the main GOP objective is to undercut groups that are antagonistic to Republican causes. They say constricting 527s would shift political contributions to other business and social welfare organizations, categorized as 501(c) groups; these groups have some restrictions on political activities but, unlike 527s, do not have to identify donors.
The limits would "hamstring independent groups while they keep open the flow to trade organizations that can spend unlimited amounts of money," said Rep. Juanita Millender-McDonald, D-Calif. "They are restricting unions and these independent groups. That is just mean-spirited."
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