McCain Goes to Battle

Senator tackles campaign-finance reform

Sen. John McCain (R-Ariz.) is gearing up for another battle over campaign- finance reform and counting on a powerful new ally: President George W. Bush.

More than two months after the presidential election and two weeks away from Bush's second inauguration, only a handful in Washington are contemplating this issue. But the determined McCain is one of the few, and he plans to hold Bush to a campaign promise—phoned to him from Air Force One on Aug. 26—to assist in shutting a loophole in the law (which McCain himself helped author in 2002) that facilitated the funneling of hundreds of millions of dollars into the 2004 campaign. The president's call was a dramatic gesture touted only moments later during a press conference by Bush Press Secretary Scott McClellan. Bush owed McCain for an enthusiastic endorsement of his reelection from the floor of the Republican Convention.

Now that GOP term limits have forced him to relinquish chairmanship of the Senate Commerce Committee, McCain will have plenty of time to focus on the campaign-finance-reform battle. The river of cash flowing through the current law's loophole helped fund a new type of political advertising that came to characterize the 2004 presidential campaign; viewers were treated to massive negative TV ads funded by nonprofit activist groups like the anti-Bush and the anti-Kerry Swift Boat Veterans for Truth.

The nonprofit groups, dubbed “527s” after the section of the tax code governing their operation, became a prime alternative for unions, interest groups and wealthy individuals who in previous elections donated unlimited amounts of cash directly to the Republican and Democratic parties. Those enormous “soft-money” contributions were outlawed in 2002. The 527 groups are not permitted to coordinate their ad spending with the political parties, but there is rarely any doubt where their sympathies lie.

McCain and three other co-authors of the 2002 campaign law—Sen. Russ Feingold, (D-Wis.) and Reps. Christopher Shays (R-Conn.) and Marty Meehan, (D-Mass.)—promise to soon introduce a bill that will eliminate 527 cash and impose other reforms. Sen. Trent Lott (R-Miss.), also says he will back McCain.

Meanwhile, what remains of the Bush-Cheney campaign is also waging a court battle to force a reluctant Federal Election Commission to restrict campaign ads by 527s. If the court action doesn't work, President Bush “would be willing to pursue legislative action and work with Sen. McCain on that,” McClellan told reporters aboard Air Force One.

Money raised by 527s helped spending on political TV ads reach a record-breaking $1.6 billion in 2004, despite predictions that campaign reform would cut into the cash available for TV buys. According to the Campaign Legal Center, $336 million was raised by 527 groups, 44% from 25 wealthy individuals including financier and Bush opponent George Soros. The Republican Party led an initial fight to outlaw 527s when Democrat-leaning groups gained an early lead in exploiting the loophole. But GOP allies embraced them after the FEC delayed a final ruling on their operation until after the 2004 election.

McCain also hopes to restructure the FEC by replacing the current panel of six members (three GOP, three Democrat) with five independent commissioners.