The Federal Election Commission moved Oct. 1 in the U.S. District Court for a stay of the court's ruling holding unlawful various FEC implementing regulations for the Bipartisan Campaign Reform Act of 2002 (BCRA). The FEC's motion is the latest development in the ongoing legal battle over campaign finance reform, aspects of which could have profound implications for nonprofits. The move comes after the congressional sponsors of BCRA, unhappy with many of the rules the FEC wrote to implement the legislation, filed a lawsuit challenging the rules. On Sept. 19, U.S. District Court judge Colleen Kollar-Kotelly ruled that FEC should rewrite 15 of the 19 challenged regulations because they are not consistent with the intent of BCRA. The judge's 157-page opinion devotes most of its attention to rules relating to coordination between campaigns and independent groups and to solicitation of soft money by national political parties and federal candidates. In requesting the stay, the FEC is seeking a clear statement that the rules under review will remain in effect pending appeal and that the agency is not required to initiate rulemaking proceedings under the Sept. 19 order. The FEC noted that the Court's order remanded the rules without vacating them. The plaintiffs in the lawsuit challenging the rules will file a response by close of business Oct. 5. The ruling on electioneering communications could have the most impact on nonprofits. The opinion found the exemption for 501(c)(3) organizations was not adequately justified, questioning assumptions about IRS enforcement of the prohibition on partisan activities. The court also overturned the exemption for unpaid broadcasts without addressing any of the substantive issues that had been raised, including the absence of threat of corruption when no money is involved. Finally, the court overturned the exemption for Internet communications from the definition of coordinated public communications. As with unpaid advertising, the court did not consider the low cost and wide availability of Internet communications in making its ruling. For more background on these exemptions and their implications for nonprofits, see the Sept. 30, 2002 OMB Watcher article summarizing the theme.