OMB Watch Urges Charities to Comment on Proposed FEC Rule

The ability of nonprofits to use broadcast media for advocacy and to encourage citizen participation in public policy debates could be severely limited by proposed rules meant to regulate federal campaign finance. The Federal Election Commission (FEC) is reviewing rules that exempt unpaid broadcasts and 501(c)(3) organizations from a provision meant to limit campaign attack ads funded with soft money. The review is the result of a court case challenging a host of regulations implementing the Bipartisan Campaign Act of 2002 (BCRA). Charities and religious organizations are encouraged to file comments explaining why grassroots lobbying and genuine issue advocacy should not be regulated as federal election activity. BCRA imposed absolute bans on corporate funding, including nonprofit corporations, for broadcast messages that refer to federal candidates with 60 days of an election or 30 days of a primary. Congress gave the FEC power to create exemptions for broadcasts that are wholly unrelated to federal elections. In 2002 the FEC exempted charitable and religious organizations from the rule because, unlike other nonprofits such as 527s, these organizations are already prohibited from partisan election activity by the U.S. tax code. A federal court sent the rule back to the FEC for reconsideration to address whether it should leave enforcement to the Internal Revenue Service (IRS), and asking if this would result in exempt advertisements that "promote, support, attack and oppose" a federal candidate. On August 12 the FEC published a notice seeking public comment on its re-examination of the rule. The FEC is considering a range of options including retaining, narrowing or repealing the exemption for 501(c)(3) organizations or replacing it with a broad new exemption covering all communications that do not "promote, support, attack, or oppose" a federal candidate. The FEC, however, fails to define what it means by the "promote, support, attack, or oppose" standard. An undefined "promote, support, attack, or oppose" standard would be the wrong approach to determine when charities and religious organizations can broadcast grassroots lobbying and other messages about the issues of the day. It does not distinguish between a candidate in his or her capacity as a candidate and references to public officials acting in their official capacity. It could mean grassroots lobbying messages that ask people to call a Senator and urge him or her to change a past position on a bill are considered partisan attacks on that Senator. This approach would have a chilling effect on constitutionally protected speech, with charities wishing to avoid FEC investigations, even if they are ultimately cleared. The public would be the ultimate loser if this happens. While drawing the line between electioneering and issue advocacy may be difficult, it is not impossible. Lobbying is not campaigning. The IRS has established indicators that distinguish between electioneering and issue advocacy. For example, nonpartisan communications are those that:
  • identify specific legislation or a specific event outside the control of the organization;
  • are timed to coincide with the specific event; and
  • identify the candidate solely as a government official in a position to act on the policy or specific event.
The FEC should use IRS standards in its own enforcement program, so that there will be one set of standards for charities and religious organizations to define what is partisan and what is not. The FEC should recognize that nonpartisan nonprofits have the right to speak out on the issues of the day, any day. The right to criticize federal officeholders in television, radio, satellite and cable media should not depend on arbitrary application of the undefined "promote, attack, support or oppose" standard, or on the desire of federal officials to avoid public criticism. If the FEC is unable or unwilling to define the "promote, attack, support or oppose" standard, it should retain the exemption for 501(c)(3) organizations. It can always initiate its own enforcement proceedings, and use the IRS rules as a guide. Although it lost its appeal of the court's ruling before a three-judge panel, the FEC has asked the U. S. Court of Appeals for the District of Columbia to allow review by the entire eleven-judge panel. A majority of the judges must approve the request. On Sept. 2 the court ordered attorneys for Reps. Chris Shays (R-CT) and Martin Meehan (D-MA), plaintiffs in the suit, to file a response to the FEC's request by September 17.
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