http://en.wikipedia.org/wiki/Bipartisan_Campaign_Reform_Act
Provisions of the legislation were challenged as unconstitutional by a group of plaintiffs led by then-Senate
Majority Whip Mitch McConnell, a long-time opponent of the bill. President Bush signed the law despite "reservations about the constitutionality of the broad ban on issue advertising."
[1] He appeared to expect that the Supreme Court would overturn some of its key provisions. But, in December 2003, the
Supreme Court upheld most of the legislation in
McConnell v. FEC.
Subsequently, political parties and "watchdog" organizations have filed complaints with the FEC concerning the raising and spending of soft money by so-called "
527 organizations" — organizations claiming tax-exemption as "political organizations" under Section 527 of the
Internal Revenue Code (
26 U.S.C. § 527), but not registering as "political committees" under the
Federal Election Campaign Act, which uses a different legal definition. These organizations have been established on both sides of the political aisle, and have included high profile organizations such as the
Media Fund and the
Swift Boat Veterans for Truth. 527s are financed in large part by wealthy individuals, labor unions, and businesses[
citation needed]. 527s pre-dated McCain-Feingold but grew in popularity after the law took effect. In May 2004, the FEC voted to not write new rules on the application of federal campaign finance laws to 527 organizations. Although the FEC did promulgate a new rule in the fall of 2004 requiring some 527s participating in federal campaigns to use at least 50% "hard money" (contributions regulated by the Federal Election Campaign Act) to pay their expenses, the FEC did not change its regulations on when a 527 organization must register as a federal "political committee"-prompting Representatives
Shays and
Meehan to file a federal court lawsuit against the FEC for the Commission's failure to adopt a 527 rule. In September, 2007, a Federal District Court ruled in favor of the FEC, against Congressmen Shays and Meehan.
In December 2006 the FEC entered settlements with three 527 groups the Commission found to have violated federal law by failing to register as "political committees" and abide by contribution limits, source prohibitions and disclosure requirements during the 2004 election cycle. Swift Boat Veterans for Truth was fined $299,500; the
League of Conservation Voters was fined $180,000;
MoveOn.org was fined $150,000. In February 2007, the 527 organization Progress for America Voter Fund was likewise fined $750,000 for its failure to abide by federal campaign finance laws during the 2004 election cycle.
In June 2007 the U.S. Supreme Court held, in
Federal Election Commission v. Wisconsin Right to Life, Inc., that BCRA's limitations on corporate and labor union funding of broadcast ads mentioning a candidate within 30 days of a primary or caucus or 60 days of a general election are unconstitutional as applied to ads susceptible of a reasonable interpretation other than as an appeal to vote for or against a specific candidate. Some election law experts believe the new exception will render BCRA's "electioneering communication" provisions meaningless, while others believe the new exception is quite narrow. The Federal Election Commission's interpretation and application of the new exception during the 2008 election cycle will determine the true scope and impact of the Court's decision.
In June, 2008, the section of the act known as the "millionaire's amendment" was overturned by the Supreme Court in
Davis v. Federal Election Commission [2]. This provision had attempted to "equalize" campaigns by providing that the legal limit on contributions would increase for a candidate who was substantially outspent by an opposing candidate using personal wealth.
In March 2009, the U.S. Supreme Court heard oral arguments in
Citizens United v. Federal Election Commission, regarding whether or not a heavily political documentary (about
Hillary Clinton) could be considered a political ad.
[1] In January 2010, the Supreme Court struck those sections down, saying, "If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” Specifically,
Citizens struck down campaign financing laws related to corporations and unions; law previously banned the broadcast, cable or satellite transmission of “electioneering communications” paid for by corporations in the 30 days before a presidential primary and in the 60 days before the general election. The minority said the court was making a mistake treating the voices of corporations as similar to those of people.
[2]
