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Inside Politics

FEC turns back spending limits by independent groups

Observers predict rise in negative ads

From Robert Yoon
CNN Political Unit

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Federal Election Commission
America Votes 2004

WASHINGTON (CNN) -- The Federal Election Commission Thursday rejected a proposal to rein in the unlimited fundraising and spending power of independent political groups attempting to influence the outcome of this year's presidential race.

The decision allows so-called 527 groups, named after a section in federal tax law, to continue legally pouring millions of dollars into television ads and partisan get-out-the-vote efforts using unregulated "soft money."

Congress banned the use of soft money by political parties and certain political groups in 2002, but that law did not address activity by 527s.

As a result, a number of high-profile Democratic groups have emerged this year attacking President Bush and drawing cries of foul from GOP officials as well as from the Bush campaign.

"We obviously feel both pleased and vindicated," said Sarah Leonard, a spokeswoman for the Media Fund and America Coming Together, two of the Democratic groups at the heart of the 527 controversy.

"We've maintained for many months that the proposal under consideration, a fundamental reordering of politics and a significant impingement on political speech, was too complicated and important to be jammed through the commission," she said.

Although Republican officials had called on the FEC to impose strict regulations on 527s, the commission's refusal to do so effectively clears the way for Republican groups to raise and spend soft money for the same kind of political activity that Democratic groups have been engaged in for months. (RNC opens assault on anti-Bush groups)

"A lot of donors who were holding back are now going to feel free to give," said David Keating, executive director of the Club for Growth, a conservative anti-tax organization and one of few Republican-friendly 527s that has been active this campaign.

"This clarity is going to be really helpful to Republican donors. Basically we can say, 'Come on in, the water's fine. Everybody into the pool. Let's go and really get our message out there.' "

Bush-Cheney campaign chairman Marc Racicot and Republican National Committee Chairman Ed Gillespie called the FEC decision "irresponsible" in a joint statement.

"The 2004 elections will now be a free-for-all. Thanks to the deliberate inaction by the Federal Election Commission, the battle of the 527's is likely to escalate to a full-scale, two-sided war," they said.

Republican FEC commissioner Michael Toner, who authored the failed proposal, agrees that the panel's decision will lead to a proliferation of negative attack ads from both sides.

The November race "will be like the wild West," said Toner. "Both Republicans and Democrats will take advantage of the new legal landscape. We're going to see 527s spend unlimited amounts of money on attack ads and partisan activity. That's the bottom line."

Democratic 527 groups such as the Media Fund, ACT, and the MoveOn.Org Voter Fund have helped Kerry overcome the Bush campaign's considerable financial advantage.

According to estimates by TNS Media Intelligence/Campaign Media Analysis Group, CNN's consultant on ad spending, the Kerry campaign and Democratic groups have spent a combined total of at least $63 million on television ads, compared to at least $56 million by the Bush campaign.

Democratic sources put Bush's total ad spending at closer to $70 million, while Kerry's ad spending without the Democratic groups is at least $26 million.

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