THE WHITE HOUSE
Office of the Press Secretary
PRESIDENT CLINTON SIGNS CAMPAIGN FINANCE DISCLOSURE LEGISLATION AND CALLS ON 527 GROUPS TO VOLUNTARILY OPEN THEIR BOOKS NOW July 1, 2000
Today, the President will sign legislation to establish reporting and disclosure requirements for section 527 organizations, the so-called "stealth PACs," representing the first new restriction to the nation's campaign finance law since 1979. A reform that Vice-President Gore has championed, the disclosure requirements stop special interests from using 527 status to hide their political spending behind a tax-exempt front group. The President will denounce the way these abuses have already distorted politics in favor of the special interests, as they have in the Medicare prescription drug debate, where the Citizens for Better Medicare (CBM) alone has already raised and spent $65 million fighting a meaningful, affordable Medicare prescription drug benefit. Because today's actions only apply to future contributions and spending while continuing to protect anonymous funds already in the coffers, the President will also call on Citizens for Better Medicare and other 527's who have avoided disclosure to voluntarily open their books now. The President will also urge Congress to follow-through on this modest but important first step and enact comprehensive campaign finance reform this year.
CLOSING THE SECTION 527 LOOPHOLE. Until now, many groups benefiting from the tax-exempt status that section 527 of the Internal Revenue Code confers have evaded federal election laws and masked their funding sources, even while acting directly to influence politics and elections. Today, the President will sign into law a bill that brings these activities out into the open by requiring these groups to disclose their unnamed donors and expenditures. Section 527 organizations -- by definition -- attempt to influence the outcome of our political elections in a number of ways, including targeting districts with key elections. Yet the lack of strong disclosure laws leaves voters no way of knowing who is trying to influence them from behind innocent-sounding and often misleading names. Because of the leadership shown by Vice-President Gore, and Sens. McCain, Lieberman, and Feingold, along with Reps. Doggett, Moore, Rangel, Houghton, Castle, Meehan, Shays and Hansen, the President has the landmark opportunity today to end this growing abuse.
CASE STUDY--THE PRESCRIPTION DRUG DEBATE. The prescription drug debate is an unfortunate example of current 527 abuses. Citizens for Better Medicare claims to be a broad, bipartisan group with thousands of members dedicated to keeping politics out of our medicine cabinets. However, the executive director admits that the majority of their funding comes from the pharmaceutical industry. Meanwhile, the group has reportedly used the 527 loophole to dedicate $65 million for television, radio, and newspapers ads designed to lobby Congress and manipulate public opinion in order to defeat the Administration's efforts to provide seniors with a meaningful and affordable prescription drug benefit option. This new law will require groups like the Citizens for Better Medicare to reveal the names of drug companies who underwrite their funding. Unfortunately, that may not be enough -- the new law does not require 527's to disclose the sources of the millions already received. Because of the importance of the prescription drug debate to the American people, the President will reiterate his call on the Citizens for Better Medicare to comply with the intent of the legislation and reveal the sources of all the funding it has raised to date next week, as the nation celebrates Independence Day.
URGING CONGRESS TO FINISH THE JOB BY PASSING COMPREHENSIVE REFORM. By cracking down on this one political fundraising practice, today's actions highlight the urgent need for more comprehensive campaign finance reform. This bill represents a step in the right direction -- it closes some loopholes and ends some abuses. However, it will not address the growing threats to the health of our election system posed by other practices. That is why the President is renewing his call to Congress to enact comprehensive, meaningful campaign finance reform this year by passing the Shays-Meehan bill in the House, and McCain-Feingold in the Senate. Quick Congressional action on these comprehensive bipartisan proposals would be a major step in strengthening our democracy and restoring the public's faith in the integrity of our elections.