President signs bill restricting secret political money
WASHINGTON -- President Clinton on Saturday signed the first legislation restricting campaign contributions in two decades and said it will force special interest groups "to come clean about their donors."
The president said the law closes a loophole that allowed some tax-exempt, politically motivated groups to influence elections and policy actions without disclosing where the money to pay for it came from.
Delivering a brief statement on the South Lawn of the White House, Clinton said the clearest and most serious recent example was the attempt of groups allied to the pharmaceutical industry to influence his administration's efforts to achieve "a meaningful, affordable Medicare prescription drug benefit."
He said groups, including Citizens for Better Medicare, "flooded the
airways with millions of dollars of ads" against the plan.
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The new law, he said, makes groups like this "lift the curtain" on all future spending.
Now, he said, they should voluntarily "open their books and let the American people judge" them by their donors.
The president said the bill is "a step but not a substitute for comprehensive campaign reform." He called on Congress to pass such comprehensive reform this year.
"But let me say this is a good day and this is a good law," the president said.
The secret donations were made under Section 527 of the Internal Revenue Code, reserved for groups created for political purposes, including political action committees, or PACs. The White House called the groups claiming Section 527 immunity from disclosure, "stealth PACS."
The new legislation requires section 527 groups to notify the Internal Revenue Service that they exist within 24 hours of forming. And groups that raise at least $25,000 per year would have to report contributions of $200 or more and spending of $500 or more. Reports would be due four times a year, plus immediately before an election, and the first should be available before voting this November.
Despite initial opposition from Republican leaders, the legislation was approved by big majorities in each chamber of Congress. It passed the Senate 92-6 Thursday.
Backers argued the measure was crucial to preserving one of the pillars of post-Watergate reforms: public disclosure.
But it would leave many interest groups free to continue airing commercials without naming their donors. And groups affected by the legislation may reorganize themselves under the tax laws to avoid disclosure.
The bill only requires disclosure of donations made after it becomes law.
