A new 527 group called The Real Truth About Obama, Inc. (RTAO) has filed a lawsuit in the U.S. District Court in Richmond, VA, against the Federal Election Commission (FEC) and the U.S. Department of Justice (DOJ). RTAO plans to run issue ads examining the Democratic presidential candidate's position on abortion and other policy issues. RTAO argues it is not a political action committee (PAC) because it will not advocate for Obama's defeat or election. The group seeks to prevent the enforcement of several FEC regulations regarding when a group must register as a PAC, as well as the enforcement of federal reporting requirements for political organizations, including 527 groups.

So-called 527 organizations are those organized to influence elections, but to avoid regulation by the FEC, they must steer clear of directly advocating for the election or defeat of a federal candidate. 527 groups across the ideological spectrum are often forced to walk a fine line, however, as the FEC and the courts will sometimes find that ads or other materials go beyond pure issue advocacy. Should an organization cross this line, the FEC will often attempt to treat the group like a PAC, which is subject to spending limits and other rules.

According to a press release from the James Madison Center for Free Speech, "RTAO was formed to tell the American people the real truth about Senator Obama's public policy positions. Its first project is about Obama's radical pro-abortion views and voting record. However, RTAO fears that it will be deemed a federal PAC, if it does the project, because of the FEC's enforcement actions arising out of the 2004 election where various issue-advocacy 527s, such as the Swift Boat Veterans for Truth, were fined for failure to register as a federal PAC, even though they only engaged in issue advocacy."

The group's lead attorney, James Bopp, Jr., won the 2007 Wisconsin Right to Life (WRTL) case against the FEC. In the WRTL decision, the U.S. Supreme Court ruled that the federal electioneering communications ban is unconstitutional when applied to genuine issue ads. RTAO argues that, due to the central holding of the WRTL decision, 527s should not have to disclose their activities, including independent expenditures and election-related communications.

RTAO's abortion information project includes a website, www.TheRealTruthAboutObama.com, and a radio ad called "Change."

The lawsuit challenges the FEC's definition of express advocacy: any communication that "can have no other reasonable meaning than to urge the election or defeat of one or more clearly identified candidate(s)." In WRTL, the Court stated that an ad can be considered an electioneering communication when it is "susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate," therefore protecting messages put out by political groups that engage in issue advocacy.

However, according to RTAO, the regulation put in place after the WRTL decision is unconstitutionally vague and overbroad. RTAO is challenging this new regulation, which the group charges could restrict messages if they contain "indicia of express advocacy," such as references to political parties, and could exclude some "express advocacy."

"[T]he FEC continues to enforce its vague and overbroad rule defining 'express advocacy,' even where the communication does not contain such explicit words," said RTAO. "If an ad is deemed to contain express advocacy, it becomes an 'independent expenditure,' which is forbidden to corporations, such as RTAO, must be reported to the FEC, must contain a disclaimer, and can trigger PAC status." The group's "Change" ad does not have any words of express advocacy, such as "vote for" or "defeat," but RTAO is arguing that under FEC definitions, the ad could be considered an independent expenditure, rather than the issue advocacy the group claims the piece represents.

RTAO's website is not operational due to the FEC's enforcement policies that prevent RTAO from raising money for the project. The FEC has adopted rules indicating that groups that become involved in federal elections could be viewed as regulated "political committees." The lawsuit challenges this "contribution" solicitation provision the FEC adopted in 2004, which says that groups can be regulated if they solicit money based on an appeal to support or oppose a candidate. RTAO also disputes the FEC's enforcement policy for imposing PAC status, including the determination of a group's major purpose.

The FEC continues to determine PAC status on a case-by-case basis, based on a wide range of factors. After the enforcement actions against 527 groups active during the 2004 presidential campaign, the group feels it will be subject to an FEC and DOJ investigation. In the preliminary injunction request, the RTAO details reasons why it is not a PAC. "[I]ts Articles establish that its major purpose is issue advocacy, not the regulable campaign activities that could make its major purpose the nomination or election of candidates."

RTAO's lawsuit also named DOJ, citing a letter from a DOJ official to Democracy 21 President Fred Wertheimer that said DOJ would "vigorously pursue instances where individuals knowingly and intentionally violate clear commands" of the Federal Election Campaign Act. According to the lawsuit, "RTAO's chill is heightened by the DOJ's recent declaration."

A Sept. 10 hearing date has been set, and the case has been assigned to U.S. District Judge James Spencer, who has previously issued rulings striking down campaign finance regulations on constitutional grounds. A motion filed by FEC lawyers suggests that the plaintiff engaged in "forum shopping" by filing the case in a court that has been sympathetic to its argument in the past.

In addition, on Aug. 14, the Campaign Legal Center and Democracy 21 filed an amicus brief with the District Court opposing RTAO's request for a preliminary injunction. The amicus argues that the FEC regulations are constitutional and that the FEC "correctly applied the "major purpose" test to determine whether certain 527 organizations were "political committees."

In a press release, Bopp said, "The U.S. Supreme Court has recently reaffirmed the constitutional protection for issue advocacy. The FEC, however, refuses to change its regulations and enforcement policy to conform with that mandate. Instead, the FEC plans to use its complicated PAC enforcement policy, developed in 2004, to punish groups for engaging in issue advocacy. This is unconstitutional, and we hope the federal courts will put an end to it."