The United States Sentencing Commission has proposed interim sentencing guidelines for increased penalties for violations of campaign finance law, incorporating requirements from last year’s Bipartisan Campaign Reform Act (BCRA). OMB Watch filed comments in December 2002 asking that the emergency guidelines treat illegal electioneering communications more leniently than illegal campaign contributions or soft money expenditures, since “contributions of money can only be meant to influence an election.

Below is a summary of new developments concerning campaign finance issues. BCRA Rulemaking

Last week the FEC proposed new rules to define when communications with a federal candidate, a campaign, party or their agent, may turn an otherwise independent expenditure into an in-kind campaign contribution. Since corporations, including nonprofits, are prohibited from making contributions to federal candidates, the regulatory definition of “coordination” could impact any group that interacts with public officials or community leaders that are also federal candidates and communicates with the public about issues that involve them.

The “Stealth PAC” law of 2000 requires political action committees (PACs) exempt under Section 527 of the federal tax code to register with the IRS and report their contributions and expenditures. (Contributions to 527 organizations are not tax dedcutible.) The National Federation of Republican Assemblies filed a constitutional challenge to the law in federal court in Alabama soon after it passed. On August 27 Judge Richard Vollmer of the U.S. District Court for Southern Alabama upheld part of the law and overturned part as unconstitutional.