Witness List Set for November 18 Soft Money Hearing at FEC

The proposed "soft money" 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 termed "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.

A Notice of Proposed Rulemaking was printed in the Federal Register on July 13, 1998, inviting comments on options for regulating soft money, including whether the 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. Comment period closed October 2, after being extended from September 11. A previous hearing date of September 23 was rescheduled for November 18.

Option one in the FEC 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 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 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 public hearing on November 18 begins at 9 a.m. in the Commission’s 9^th floor meeting room, 999 E St. NW, Washington, DC.

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