House Republicans plan to introduce "527" bill
June 22, 2000
Web posted at: 3:44 p.m. EDT (1944 GMT)
WASHINGTON (CNN) -- Congressional efforts to rein in tax-exempt political organizations known as "527s" are expected to get a boost Thursday when a House committee drafts a bill requiring disclosure of the groups' financial backers.
The so-called 527s, which get their name from a section of the tax code, can raise and spend unlimited amounts of money without naming their donors. The groups typically advocate specific issues, but can also support individual candidates.
The new House measure is sponsored by Rep. Amo Houghton, R-New York, chairman of the Ways and Means Oversight Subcommittee.
It expands on a bill sponsored by Sens. John McCain, R-Arizona, and Russ Feingold, D-Wisconsin, that unexpectedly passed the Senate two weeks ago.
However, a Democratic-sponsored version of the McCain-Feingold 527 bill failed along party lines in the House last week after Republican leaders promised GOP supporters of the bill that they would introduce their own version before the July 4 recess.
Opponents of the 527 measure say it should cover other nonprofit organizations, such as labor unions, that engage in issue ads. The GOP-sponsored measure would expand on that by requiring disclosure of a number of other tax-exempt organizations involved in politics, including unions, trade associations, and other special interest groups.
Under the bill, 527 groups would have to identify themselves to the IRS and list anyone who contributes $200 or more. It would also require other tax-exempt groups to disclose any contribution of $1,000 or more that is used for political purposes, and those groups would have to disclose campaign-related spending.
This year's presidential and congressional campaigns have seen widespread growth of 527s supporting both Democrats and Republicans. Much of that money is spent on television advertising targeting opposition candidates.
But supporters of the 527s defend the anonymous donations as free speech protected by the First Amendment.
The once-obscure section of the tax code was created in 1975 to establish tax rules for political organizations such as the national political parties and political action committees.
In addition to congressional efforts, the FEC is considering a proposal to make 527s and other groups register with the commission and meet its disclosure rules.
CNN Producer Ted Barrett contributed to this report.
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