DISCLOSE Act Would Alter Committees’ IEs

May 6, 2010 · 9:59 AM EDT

Democrats have proposed a new campaign finance reform bill to counter a controversial Supreme Court decision that enhanced the power of outside groups to run campaign ads, but a little-publicized provision in the legislation would dramatically alter how parties interact with candidates and give the campaign committees broad flexibility in how they handle independent expenditures.

According to attorneys on both sides of the aisle, the proposed bill would likely do away with the biennial tradition of the four House and Senate campaign committees sending chosen staff members to the other side of “the wall” — where they spend millions on campaign communication, independent of coordination with the committees and candidates.

The key section of the Senate version of the DISCLOSE Act, Title 1, Sec. 104 (b), redefines the conduct test for coordination.

“The direct costs incurred by a political committee of a political party for a communication made in connection with the campaign of a candidate for Federal office shall not be subject to the limitations contained in paragraphs (2) and (3) unless the communication is controlled by, or made at the direction of, the candidate or an authorized committee of the candidate,” according to the proposed bill.

The House version, co-sponsored by Democratic Congressional Campaign Committee Chairman Chris Van Hollen (Md.), contains a similar provision.

Requiring “control or direction” by a candidate is a significantly higher standard for coordination. Under the current law, the campaign committees set up separate independent expenditure offices, and the strategists picked to run them, who have spent the past 18 months talking about races within the walls of the committee, are no longer allowed to discuss the races with their colleagues on the other side of the wall.

Instead, the new bill would do away with the status quo and allow the campaign committees to have conversations with candidates about ads and strategy as long as the candidates weren’t controlling or directing party spending, according to multiple campaign finance attorneys.

“Parties never should have been subject to the tighter coordination rules passed in 2003,” Democratic attorney Marc Elias explained about the unintended consequences of the Bipartisan Campaign Reform Act. “Ads that are sponsored by parties were never a target. This would restore the law back to prior to McCain-Feingold.”

Sen. Russ Feingold (D-Wis.) is a co-sponsor of the Senate version of the bill.

According to multiple attorneys interviewed for this story, the Federal Election Commission wrongly lumped spending by parties with spending by other outside groups, giving the campaign committees the same level of noncommunication with candidates as a random 527 group.

Even though the campaign committees are already setting up their independent expenditure efforts for the November elections, the staffers could return to the other side of the wall 30 days after the DISCLOSE Act is enacted.

Under the proposed legislation, “party communication will not be treated as a contribution unless directed or controlled by the candidate,” according to one Democratic attorney. Coordinated contribution limits are very low, relative to the overall expense of a campaign.

In 2008, the Democratic committees spent $1.7 million in coordinated money compared with $81.6 million in independent expenditures. The Republican committees spent $3.4 million in coordinated money and $31 million in independent expenditures, according to the Campaign Finance Institute.

Party strategists at the campaign committees are cautious and restrained in their excitement about the opportunity to spend tens of millions of dollars and be able to work more closely with their candidates’ campaigns.

This potentially significant development is not promoted as one of the seven “major points” on discloseact.com, a website set up by Senate co-sponsors Feingold, Charles Schumer (D-N.Y.) and Patrick Leahy (D-Vt.), but it would have a tremendous impact on the campaign committees.

While attorneys believe the provision will revert the candidate/party communication back to before BCRA, the parties are still subject to hard-dollar contribution limits.

“The DISCLOSE Act allows more freedom for parties to interact with their candidates, but it does so while leaving the current soft-money restrictions intact,” Van Hollen spokesman Doug Thornell said.

In general, the DISCLOSE Act appears to be a way to enhance the parties’ ability to compete after the Supreme Court’s Citizens United v. FEC decision.

“It’s what you do to keep the parties relevant,” one GOP attorney said about the bill. The spending provision as well as the provision to give party committees the lowest unit rate for television ads (just like candidates get) are ways to level the playing field with corporations and other outside groups.

According to one GOP attorney, opponents of the Supreme Court’s decision are realizing that they will have a difficult time challenging the constitutional right of outside groups to spend money, so this bill is a response to free up the parties to compete.