The real impact of the new campaing finance reform law will be influenced by two factors: the Federal Election Commission’s (FEC) decisions in writing the regulations required to implement it and the lawsuits filed by Sen. Mitch McConnell (R-KY) and the National Rifle Association challenging its constitutionality. On March 27 President Bush quietly signed the Bipartisan Campaign Finance Reform Act of 2002 (BCRA), which will become effective on November 6, the day after the fall elections. The new law, which only applies to federal elections, bans contributions of soft money to political parties, limits use of broadcast media for issue advocacy and increases the amount individuals can contribute to federal candidates and political parties. Proponents predict it will reduce the influence of money in the political system and end the "shakedown" of contributors by candidates asking for soft money. Opponents say the law infringes on first amendment rights in a variety of ways, particularly by banning labor unions and corporations, including nonprofits, from mentioning federal candidates in broadcasts during the election season. For details, see the Campaign Finance Institute’s summary. The real impact of the McCain-Feingold/Shays-Meehan law will be influenced by two factors: the Federal Election Commission’s (FEC) decisions in writing the regulations required to implement it and the lawsuits filed by Sen. Mitch McConnell (R-KY) and the National Rifle Association challenging its constitutionality. FEC Rulemaking The FEC will begin the rulemaking process at its next meeting, scheduled for April 11. The law requires new regulations on the soft money ban to be completed by late June. The FEC has until December to come up with regulations in three other areas: limits on coordinated activity between candidates and independent groups, the ban on broadcast issue advocacy and the increases and changes in limits on individual campaign contributors. The new regulations on coordinated activity and broadcast communications will likely have a big impact on nonprofits. All nonprofits, including 501(c)(3) organizations, can be negatively impacted by the "issue advocacy" provision, which bans mentioning federal candidates within 30 days of a primary or 60 days of an election. Candidate debates and forums and "independent expenditures" are exempted from this restriction, but any further exemptions will need to be created by the FEC as part of new regulations under the law. (The new law permits the FEC to create further exemptions for broadcasts that are not election related. See this OMB Watch article for floor debate language describing the sponsors’ intent for further exemptions.) Nonprofits will need to weigh in during the rulemaking process to show the FEC examples of broadcasts, such as grassroots lobbying ads, that mention federal candidates, but do not imply support or opposition. Similarly, nonprofits will need to show the FEC examples of interaction between members of Congress and nonprofits that are focused on policy issues, and not on elections. Otherwise, the FEC may come up with an overbroad definition of "coordination" that would turn an organization’s activities into a prohibited campaign contribution. OMB Watch will monitor the rulemaking process and keep nonprofits updated on developments through our website and email list. The content of the new regulations will be heavily influenced by the six FEC Commissioners, who are appointed by the President and must have three Republicans and three Democrats. On Friday, March 29, President Bush named his former campaign counsel and current Republican National Committee counsel, Michael Toner, to be a Commissioner. Toner will replace Republican Darryl Wold, whose term is expiring. Since Toner’s nomination was made while Congress is in its Easter recess, the Senate’s "advise and consent" powers were circumvented, and Toner will serve until the end of the year during this crucial rulemaking period. There is concern that, although the President signed the law, his intent is to weaken it through the regulatory process. Lawsuits Challenge Constitutionality Two lawsuits seeking to overturn the new law were filed in U.S. District Court on the same day President Bush signed it. As expected, Sen. Mitch McConnell (R-KY) filed suit, naming the FEC and Federal Communications Commission (FCC) as defendants. The National Rifle Association also filed suit, against the FEC and the Attorney General. Sen. John McCain (R-AZ) said he and the other sponsors of the law will intervene in the case, and other groups are expected to become part of the case as well. Although the case will take many months, it will be decided relatively quickly because BCRA provides for it to go straight to the Supreme Court after being heard by a special three-judge panel in the District of Columbia federal court. Both opponents and supporters of campaign finance reform have already assembled strong legal teams to litigate the case. McConnell’s suit challenges many provisions of the law, but not the increase in contribution limits for individuals. The complaint claims the soft money ban, broadcast issue advocacy restrictions, contribution disclosure provisions and sections on independent and coordinated expenditures violate the first amendment’s protections of free speech and association, as well and the fifth amendment’s due process clause and the fourteenth amendment’s equal protection requirements. Read more on the specifics of the complaints in the two cases. Free Air Time Campaign Begins Now that the fight to pass the McCain-Feingold/Shays-Meehan law is over, campaign finance proponents are launching a new initiative for free air time requirements. The Free Air Time Campaign is being co-chaired by former Democratic Illinois Senator Paul Simon, and former Republican New Jersey Governor Thomas Kean. The goal is to require broadcasters to give free air time for candidate ads, debates and issue discussion. The group is being staffed by the Alliance for Better Campaigns, and is endorsed by the League of Women Voters, the National Association for the Advancement of Colored People, Consumers Union, the National Council of Churches and the Youth Vote Coalition. For more information see the Campaign and Media Legal Center website.