STEVE INSKEEP, host:
No matter who controls the Senate in January, the flow of campaign money continues. For the past few elections, so-called independent groups have been able to raise unlimited amounts for ads and mailings and consultants. Yesterday the federal agency that regulates political money took a step to change that, though it's hard to say how big the change will be.
Here's NPR's Peter Overby.
PETER OVERBY: This all goes back to the presidential campaign of 2004 and the ads by Swift Boat Veterans for Truth.
(Soundbite of a political ad)
Unidentified Man #1: He dishonored this country, he most certainly did.
Unidentified Man #2: I served with John Kerry. John Kerry cannot be trusted.
Unidentified Man #3: Swift Boat Veterans for Truth is responsible for the content of this advertisement.
OVERBY: The ads hit Democrat Kerry's campaign so hard they became a verb: Kerry was swiftboated. And in a way, so was the nation's campaign finance law. Like many other independent groups, Swift Boat Veterans was registered with the Internal Revenue Service as a political organization, a Section 527 organization in Washington-ese. The 527s told the Federal Election Commission that they weren't expressly supporting or opposing any candidate so they could ignore the usual contribution limit of $5,000 per donor. Swift Boat Veterans raised $1.7 million in seed money from three Texas millionaires; that's the money that paid for the first ads.
But now, by a six to nothing vote, the Election Commission has said the Swift Boat Veterans should have played by its rules. The commission is fining the group just under $300,000. The commission also fines the League of Conservation Voters $180,000 and Moveon.org $122,000 for running similar 527 organizations. All three groups issued statements that they simply decided it was smarter to settle than to fight, and none of their 527s is still active.
John O'Neill, a leader of the Swift Boat Veterans, says the group has money leftover from the campaign and it wants to give it all to a foundation that's helping disabled Iraqi war vets. He says paying the fine makes sense.
Mr. JOHN O'NEILL (Swift Boat Veterans for Truth): As opposed to simply engaging in a legal contest that would go on several years, and probably would inevitably go to Supreme Court and would eat up almost all the funds we have.
OVERBY: The settlements also clear the way for the FEC to claim a new legal standard for 2008. Election Commissioner Robert Lenhard says that if independent political groups want to get involved in presidential politics, they better pay attention.
Mr. ROBERT LENHARD (Commissioner, Federal Election Commission): They are prohibited from raising money for these activities from corporations for unions. They are prohibited from raising money from individuals in excess of $5,000 in a year. And they are obligated to file reports that disclose how they raise and spend those funds.
OVERBY: But not everyone in campaign law thinks it's so obvious. Democratic lawyer Bob Bauer points out that the FEC never issued regulations that lay out the boundaries of what's allowed, and he doubts these enforcement cases would deter much of the outside money in politics.
Mr. BOB BAUER (Attorney): There will always be controversies over groups like this, and that's one of the reasons why I believe the groups will always outlast these controversies. And they'll re-organize themselves in some new form because the kind of activity we're talking about here is, at bottom, constitutionally protected and very difficult to limit.
OVERBY: Conversely, at The Campaign Legal Center, lawyer Paul Ryan called the FEC action too little too late. This center co-authored the complaints against Swift Boat Veterans and several other 527s.
Mr. PAUL RYAN (Attorney, The Campaign Legal Center): The biggest fine handed down today against Swift Boat Veterans was for less than $300,000, and this is for a group that raised over $25 million. I think many political operatives will see this type of fine as no more than the cost of doing business.
OVERBY: As some operatives privately say, they're perfectly willing to do.
Peter Overby, NPR News, Washington.
INSKEEP: It's MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.
