SADDAM HUSSEIN, SICILIAN MAFIA: CAMPAIGN DONORS? '527s' Give them a way into American election campaigns. Larry Makinson is executive director of the Center for Responsive Politics, a non-partisan, non-profit campaign finance watchdog group based in Washington, D.C. Editor's Note: In the face of escalating public outrage over the use of so-called "527 committees" to avoid federal campaign finance laws, the House of Representatives is reluctantly considering legislation to require these committes to disclose their donors and expenditures. The Senate already has passed such a bill. The following is the statement of Larry Makinson, Executive Director of the Center for Responsive Politics, made on June 20, 2000 to the Subcommittee on Oversight of the House Committee on Ways and Means, which took testimony that day on the disclosure of political activities of tax-exempt organizations. Mr. Chairman, and members of the committee, my name is Larry Makinson. I am executive director of the Center for Responsive Politics, a non-partisan non-profit research organization that monitors and analyzes campaign contributions in federal elections. I appreciate the opportunity to address the committee today, and I'd like to address my remarks particularly to those organizations operating under section 527 of the Internal Revenue code. A little background first. The Center for Responsive Politics was founded in 1983 by two U.S. Senators -- Hugh Scott, Republican of Pennsylvania, and Frank Church, Democrat of Idaho. It was founded with the idea of looking at Congress and finding ways to make it more responsive to the public. As part of that mandate, the Center first examined the relationship between money and politics quite early in its history. Our first report on the subject reviewed contribution patterns in the 1984 presidential elections. Since 1989, and proceeding right up to the present, we have systematically monitored all itemized contributions to federal candidates and parties, both from PACs [political action committees] and from individuals. We break them down by industry and interest group, and we publish our findings so that anyone can see them. We used to do this in a 1,300 page book called "Open Secrets" and published by Congressional Quarterly. Nowadays we publish it solely on the Web, on our opensecrets.org website. Mr. Chairman, members of the committee, your contributions -- contributions to your reelection committees -- are an open book. As you well know, all contributions over $200 have to be itemized and reported to the Federal Election Commission. The FEC both gathers and reports that information, and any interested citizen can now look it up on the Internet. Using that information, we at the Center compile, and publish on the Web, full campaign finance profiles for every member of Congress, all candidates for Congress, and the leading contenders for President. What we have on each one of you... Here's what we have on each one of you -- and all your opponents in the 2000 elections, as well. A summary of how much money you've taken in this election cycle, how much you've spent, how much cash you have left in the bank, and how much of your money has come from PACs versus individuals, versus money from your own pocket. We also break down the contributions geographically. Anyone can look up your profile and find out how much of your money was collected in-state versus out-of-state. They can look up the five biggest metro areas contributing to your campaign, as well as your top 10 zip codes. They can also get a breakdown of your contributions by industry and interest group. We do this both in a broad sense, through a chart that divides all your contributions into one of 13 broad sectors -- such as Health or Transportation -- and on a more detailed level by looking at the top 20 industries and interest groups giving to your campaign. This would show how much you got from, say, securities firms, insurance companies, public employee unions, or airlines. They can also see your leading contributors, standardized and grouped by organization. We even monitor how good a job each candidate does in fully identifying the occupation and employers of their donors, as required by federal law. That's disclosure. With that information, any citizen who wants to find out who's paying for your election can do so, easily and quickly. Contrast that level of disclosure with the information available today on so-called "527 organizations" -- groups like "Republicans for Clean Air," which spent an estimated $2.5 million on negative ads in New York, Ohio and California in the days leading to Super Tuesday, ads that helped bring to an end the presidential campaign of John McCain. When those ads first came out, nobody knew who "Republicans for Clean Air" was. In fact as later came out, there was no organization. There was only a Texas billionaire named Sam Wyly, and his brother. And if Wyly hadn't stood up and said it was his dollars that were fueling those ads, we'd still be scratching our heads wondering where they came from. Under the terms of Section 527, Wyly didn't have to disclose a thing. Saddam Hussein or Sicilian Mafia: "527s" let them play in our politics. Nor does anyone else. Unlimited sums can also come from corporations, labor unions, ideological and single-issue groups of all political stripes -- even foreign companies, governments, despots, or for that matter the Sicilian Mafia, if they had the inclination. The fact is, if Saddam Hussein wanted to plunk $100 million into a barrage of TV ads the final week before we pick our next president, he could do it. He could also fly under the radar with direct mail pieces, or pre-recorded phone messages, to every mailbox and telephone in America. So could the American Trial Lawyers Association, the Teamsters Union, Philip Morris, the National Rifle Association, the Sierra Club, or Microsoft -- all without anybody knowing where the money came from, or how much was even spent. This has all come about through a combination of reasons -- the federal court ruling that opened up the phenomenon of so-called "issue ads," the move by the IRS to clamp down on political activities by tax-exempt organizations, and a growing desire -- in an age when disclosure of contributions is improving all the time -- for some donors to evade public detection. They have found the ultimate loophole in these 527 committees, which are seen as 100% political by the IRS, and 100% non-political by the FEC. This legal alchemy has effectively rendered their finances 100% invisible. I know there's been much discussion lately about expanding this legislation to include not simply 527's, but to require disclosure of other tax-exempt organizations attempting to influence elections as well. The one thing I would point out, however, is that there's a difference -- a crucial difference -- between 527s and all the other tax-exempt groups. As "Republicans for Clean Air" has all too clearly demonstrated, a 527 needn't be an organization at all. All it is is a bank account. A secret bank account, whose donors can come from absolutely anywhere in the world. Mr. Chairman, we spend hundreds of billions of dollars a year protecting our national security, yet with this loophole we have invited anyone in to potentially disrupt our elections. For the cost of a few Scud missiles, any foreign government, corporation, or cartel could pour millions of dollars into influencing our elections. They could do it legally and completely anonymously. That's as much a danger to this republic as any brushfire war halfway around the world. I'm glad it's getting attention here in Congress, and I hope you'll shut this loophole down as quickly as possible. There should be no place in our American elections for secret bank accounts or phantom organizations with names that sound all-American, but identities that could be anything but. Thank you, and I'd be happy to answer any questions you may have. http://tompaine.com/print.php3?id=1085 <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! These are sordid matters and 'conspiracy theory'�with its many half-truths, mis- directions and outright frauds�is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://home.ease.lsoft.com/archives/CTRL.html <A HREF="http://home.ease.lsoft.com/archives/ctrl.html">Archives of [EMAIL PROTECTED]</A> http:[EMAIL PROTECTED]/ <A HREF="http:[EMAIL PROTECTED]/">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
