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There was a lot of talk on the campaign trail last year about soft money. Public disgust with flaws in the political finance system fueled Sen. John McCain’s unexpected momentum in GOP presidential primaries — and cut into support for former Vice President Al Gore. But as Senate debate begins today on S. 27, the reform bill sponsored by McCain, R-Ariz., and Sen. Russ Feingold, D-Wis., soft money is no longer the central issue for many groups lobbying Capitol Hill. Instead, their focus has turned to two provisions limiting the political activity of labor unions and corporations. For the bill’s opponents, the controversial measures make convenient targets. And as trade associations, unions, and public interest organizations from across the political spectrum step forward with concerns, the provisions have become a major barrier to building support. “A lot of folks who didn’t get involved in this issue in the past are suddenly waking up and realizing that this might affect them,” says Tim Mooney, a spokesman for Alliance for Justice, a coalition of liberal interest groups which supports S. 27. “I do think it’s important to realize that McCain-Feingold is not just a soft money ban anymore,” Mooney adds. The current version of S. 27 would make three major changes — banning soft money, further restricting the political advertising of corporations and labor unions, and adding new tests for what constitutes improper coordination with a candidate or political party. Last week, several groups supporting campaign finance reform — including Alliance for Justice, Independent Sector, and OMB Watch — met with McCain and Feingold staffers to discuss the advertising and coordination issues. Business coalitions and conservative advocacy groups were also engaged in 11th-hour lobbying of their Senate allies. “This was a throwaway vote for years. This is now finally something that is more than a concept. It’s something that could be reality,” says Geoff Ziebart, executive director of the National Association of Business Political Action Committees. NABPAC has shifted from opposing soft money restrictions to a more pragmatic position supporting key provisions of an alternate proposal sponsored by Sen. Chuck Hagel, R-Neb. Hagel’s bill would cap soft money contributions to the Democratic National Committee and the Republican National Committee, but would allow unrestricted soft money donations to state parties. The proposal would also increase the amounts that individuals and political action committees can contribute directly to candidates. Over the past two weeks, Ziebart estimates he has made his case personally with the staff of approximately 18 members and spoken with three times that many offices by phone. “We’ve taken the position as an organization that we support the Hagel bill with certain caveats,” Ziebart says. Fresh from important pro-business victories over ergonomics rules and bankruptcy reform, the U.S. Chamber of Commerce also turned its legislative attention to the campaign finance debate. The Chamber’s entire 15-member lobbying staff is working on the issue — by contacting senators to establish who is still undecided and by trying to anticipate amendments. “No one has a clear sense where this is heading,” says Political Director Bill Miller. “Ours is a flexible strategy. It’s going to be based on working amendment to amendment to be sure our views are known.” Stripping McCain-Feingold of the provisions that restrict advertising and coordination are the Chamber’s top priorities, Miller says. “We understand — and we share this position with the AFL-CIO — that the First Amendment gives citizens the right to criticize public officials,” Miller says. So far, business and labor have not coordinated lobbying efforts. Still, the rare harmony between the two groups, which engaged in fierce battle over ergonomics reform earlier this month, has already had an impact on the bill’s sponsors. Last week, Feingold committed to amend the bill’s broad prohibitions on coordination between candidates and outside groups. The limitations on outside advertising, however, remain intact. ADVERTISING RALLY The portion of the bill stiffening the regulation of political advertisements — once a separate amendment sponsored by Sens. Olympia Snowe, R-Maine, and James Jeffords, R-Vt. — has been a rallying point for groups opposed to McCain-Feingold. Corporations and unions are already prohibited under federal law from running advertisements directly urging the election or defeat of a candidate. The Snowe-Jeffords plan would ban those groups from running ads that name or show the image of a candidate within 60 days of a general election and 30 days of a primary election. The restrictions would also apply to tax-exempt, nonpartisan public charities, such as the National Audubon Society, the American Red Cross, and the Salvation Army. Other groups running ads naming or picturing a candidate in the targeted period would face rigorous disclosure requirements. Supporters say the measure is necessary to stop the proliferation of thinly veiled campaign ads masquerading as issue advertisements. But the provision has also made an easy target for the bill’s opponents. Unlike the sometimes awkward defense of large financial contributions as a form of free speech, the First Amendment concerns raised by advertising restrictions are readily apparent. Plus, the issue is salient on both sides of the political aisle — drawing opposition from business and labor interests, pro- and anti-abortion groups, the ACLU, the Christian Coalition, even the American Heart Association. To be sure, part of the outcry over the advertising provision is political expediency. “The issue advertising portion is the easiest to attack because a lot of people already think it’s unconstitutional,” says Michael Baroody, vice president for public affairs at the National Association of Manufacturers (NAM). According to the Supreme Court in Buckley v. Valeo, the seminal case on the regulation of campaign-related contributions and spending, Congress can regulate political spending only for “express advocacy” of a candidate. In Buckley, the test for express advocacy is the use of certain terms that have come to be known as magic words, such as “vote for,” “vote against,” “support,” or “defeat.” Democratic election lawyer James Portnoy, counsel at D.C.’s Covington & Burling, says the Snowe-Jeffords measure would probably not withstand Supreme Court scrutiny. The problem, Portnoy says, is that the language is over-inclusive. Not only does it capture communication that implicitly and perhaps illegally advocates the election of a candidate, but it casts a net over advertisements that many would consider legitimate. For instance, if the McCain-Feingold bill were coming up for a vote in the Senate and it fell within 60 days of an election in which McCain was a candidate, no union or corporate entity could run an advertisement naming the legislation’s sponsors. “You are preventing people from directly confronting public officials at a time when those officials are the most vulnerable,” Portnoy says. “You can’t say to people that it’s OK to enter public debate when no one is listening, but you can’t enter public debate when it’s most relevant.” Supporters of McCain-Feingold say the restriction is constitutionally sound and a necessary component of meaningful reform. “The Court did not say ‘magic words’ were a constitutional requirement. What they said was some additional clarification was required,” says Wiley, Rein & Fielding partner Trevor Potter, who served as general counsel to McCain’s presidential bid. “This is Congress taking another cut at defining political expenditures in a way that is sufficiently clear to satisfy the Supreme Court.” Potter points out that labor and corporate interests would still be permitted to run ads identifying a candidate during the pre-election period through their PACs. “The idea that something we might do on Sept. 3 would be legal, and if we did it Sept. 5 it would be regulated — that’s troubling,” NAM’s Baroody says. Reporter Tatiana Boncompagni contributed to this article.

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