For more information see our analysis of the Supreme Court decision's impact on nonprofit advocacy, and issues created by Shays v. FEC. The recent Supreme Court decision upholding the Bipartisan Campaign Reform Act of 2002 (BCRA) has the potential to dramatically expand the scope of regulation of federal election activity. The decision did not, however, address the act's applicability to 501(c)(3) charity organizations, which the Federal Elections Commission has already exempted from all BCRA requirements. A suit filed by BCRA co-sponsors Reps. Chris Shays and Marty Meehan to overturn the FEC exemption will now quickly move forward. BCRA prohibits corporations (including nonprofits) and labor unions from paying for broadcasts that refer to a federal candidate (e.g., an image of the federal candidate) within 60 days of a general election or 30 days of a primary. These broadcasts, dubbed “electioneering communication," impose criminal penalties for rule violators. BCRA provides exemptions for news broadcasts as well as candidate debates and forums. The act also allows the FEC to create further exemptions for broadcasts that refer to federal candidates if they are wholly unrelated to an election. In October 2002, the FEC published final rules implementing the electioneering communications provisions of the law, incorporating two provisions advocated by OMB Watch. First, that the rules applied only to paid broadcast advertising. Second, that 501(c)(3) organizations-- already prohibited by IRS rules from engaging in electioneering-- would be exempt from the rules. BCRA co-sponsors Shays and Meehan filed suit in the federal district court in the District of Columbia to overturn the FEC rules. The judge delayed action until the Supreme Court issued its decision in McConnell v. FEC. On January 7 the Court ordered that briefs be filed by February 27, and responses no later than March 31. A quick decision in expected. If the Shays-Meehan lawsuit is successful in its efforts to overturn the exemption for 501(c)(3) organizations and unpaid broadcasts, charities would have to immediately change the way grassroots lobbying and public education campaigns are conducted during a federal election season. A lobby campaign that has a paid broadcast ad that refers to a federal candidate during the restricted period (30 days before a primary and 60 days before a general election) would face criminal penalties. If Shays-Meehan won the lawsuit it would:

• Further complicate rules for grassroots lobbying and public education;
• Chill nonprofit lobbying for fear of criminal penalties;
• Require nonprofits to raise funds for separate segregated funds (SSF) to pay for grassroots lobbying broadcasts to avoid the penalties;
• Increase administrative burden from disclosure requirements; and
• Open up the door to donor disclosure for 501(c)(3)s since contributors to the SSF would be disclosed.

Nonprofits need to be aware that some reformers are calling for an extension of the electioneering communications rule to non-broadcast communications, which could conceivably include email correspondence, web site announcements, phone banking, direct mailings and canvassing. The Shays-Meehan suit raises fundamental questions about advocacy rights for charities. Will criticism of a member of Congress or the President broadcasted 60 days before a general election or 30 days before a primary be a felony? Will charities be able to broadcast an incumbent candidate’s stance on an issue during the restricted time period? If not, then will be there be less accountability in the legislature?