News Releases, Media Advisories

For Immediate Release:                                  Contact:  Ron Harris
July 10, 1998                                                     Sharon Snyder
                                                                  Ian Stirton
                                                                  Kelly Huff

 

 

FEC SEEKS COMMENTS ON ‘SOFT MONEY’ PROPOSED RULEMAKING

 

WASHINGTON – The Federal Election Commission is seeking public comment on proposed rules relating to the receipt and use of prohibited and excessive contributions, also known as "soft money," by national, state, and local party committees.

The proposed rulemaking emanated from separate petitions filed in 1997 by the President of the United States and five Members of Congress, the former urging the Commission to ban soft money and the latter asking the FEC to "modify its rules to help end or at least significantly lessen the influence of soft money."

Contributions permissible under the Federal Election Campaign Act (FECA) are referred to as "hard money" contributions. Contributions that are not permissible – individual contributions in excess of the statutory dollar limits, all corporate and labor organization contributions, and contributions from federal contractors – are referred to as soft money. These funds are to be used exclusively for state and local campaign activity or other party committee activities that do not influence federal elections.

The notice of proposed rulemaking invites comment on options for regulating soft money, including whether or not new rules are necessary, whether the Commission has the authority to promulgate rules in this area, and whether the proposed rules contained in the notice are within the scope of that authority.

Option one in the proposal would be to make no changes to current rules. National parties would continue to be prohibited from receiving and using soft money in connection with federal elections, but soft money for non-federal election related purposes would be permitted. Non-federal accounts would be permitted for these non-federal election purposes, along with the building fund accounts specifically authorized by the FECA.

The second option is to make revisions to the current rules, consisting of a core proposal and three variations on that. The core proposal would prohibit the receipt and use of soft money by the national party committees, and would eliminate all national party non-federal accounts except building fund accounts.

 

Variations to the core proposal include:

Modify the core proposal to allow national party committees to raise soft money for the limited purpose of making direct or earmarked contributions to state and local candidates.

Modify the core proposal to ensure that hard money transferred from a national to a state or local party committee is spent using the rules applicable to the national party committees, rather than the state or local party committee’s more favorable allocation ratios (a mix of hard and soft money).

Modify the core proposal to require state and local party committees to finance their mixed activities entirely with hard dollars.

 

The proposed rulemaking states, "The objective of the proposed rules is to ensure that soft money is not used to influence federal elections. In order to achieve this result, the core proposal virtually eliminates the soft money available to the national party committees to subsidize activities that influence federal elections. Both the first and second options recognize the limited scope of the FECA, and acknowledge that national party committees have other purposes besides the election of federal candidates.

"The major difference between the two options is whether most national party committees’ federal and non-federal activities are inextricably intertwined, or, as the current rules suggest, can be separated in a way that will ensure that soft money is not used to influence federal elections," the proposal continues.

The notice stipulates that the proposal does not represent a final decision by the Commission. The Commission will consider the proposal again after a comment period and public hearing. That comment period extends to September 11, 1998. A public hearing is presently scheduled for September 23.

All comments should be addressed to Susan E. Propper, Assistant General Counsel, 999 E St., NW, Washington, DC 20463. Faxed comments should be sent to 202-219-3923, with printed copy follow-up. Electronic mail comments should be sent to softmoneynpr@fec.gov.

Full text of the soft money rulemaking proposal is slated to be published in the Federal Register on Monday, July 13.

 

 

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