Amendments that would protect nonpartisan communications by charities were recently submitted by OMB Watch to Rep. Christopher Shays (R-CT) and Marty Meehan (D-MA), co-sponsors of campaign finance reform legislation in the House of Representatives (HR 380). In separate meetings over the past few weeks both Shays and Meehan expressed general agreement with concerns raised by representatives of 501(c)(3) organizations, but said specific changes would have to be carefully reviewed to ensure that no new loopholes are created. OMB Watch has objected to overbroad language passed by the Senate (S 27) that would prohibit TV, radio, cable or satellite broadcast of messages that refer to federal candidates during an election or primary season (with a limited exception for social welfare organizations and PACs). Similar language is contained in the Shays-Meehan bill. The purpose of these provisions is to address skyrocketing spending on partisan campaign ads that focus on issues and do not directly urge voters to support or oppose candidates, escaping regulation under current law. However, the strict language also covers communications by charities that have no electoral purpose or impact, and nonpartisan voter turnout and education activities. For example, under McCain-Feingold, a charity could not announce a candidate debate on the radio through a public service announcement, or air the debate on cable access TV. The purpose of the OMB Watch amendments is "To encourage greater participation in the electoral system on a nonpartisan basis, make impartial information about candidates available to voters and avoid prohibitions on non-electoral public education and grassroots lobbying activities of charities so that all sectors have a meaningful opportunity to participate in the democratic process." Two options are presented: a general exception for organizations exempt under IRC Section 501(c)(3) and specific exemptions for nonpartisan participation, public education and grassroots lobbying activities. The House and Senate campaign finance bills differ on issue advocacy in two respects:

• McCain-Feingold bans corporations and labor unions from referring to federal candidates in all broadcast communications, while the prohibition in Shays-Meehan is limited to broadcasts that are paid advertising.
• Shays-Meehan recognizes nonpartisan voter education activities by including an exception for voter guides.

The OMB Watch amendments propose amending McCain-Feingold's issue advocacy section by limiting its application to paid advertising. This change would narrow the impact of the limitation on free speech and focus on the problem of soft money funded advertising. The amendments also extend the voter guide exception in Shays-Meehan to candidate debates and forums, voter registration and get out the vote activities. The final bill should contain both amendments. OMB Watch proposes elimination of the Wellstone amendment to McCain-Feingold, which limits the issue advocacy exception for social welfare orgnaizations and PACs to communications where the audience is not primarily made up of voters in the district of the federal candidate mentioned in the communication. This would protect genuine issue advocacy by social welfare organizations, which would be required to disclose expenditures and donors. The House is expected to vote on a campaign finance reform bill after the July 4th recess. Currently the bill is being considered in three committees: House Administration, Judiciary and Energy and Commerce. Last week Sen. John McCain (R-AZ) told reporters that the change in leadership in the Senate will not change reformers' strategy, which is to avoid a conference committee. For the full text of the OMB Watch amendments click here.