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It’s a pretty routine process: Congress passes a bill, the president signs it, and the law is sent to the appropriate federal agency. There, it is digested and defined, and then spit out into reams of regulations that explain exactly how the law will be enforced. But little was routine last week at the Federal Election Commission, which is in the process of interpreting a historic campaign finance law passed earlier this year. The FEC held two days of public hearings for the first of several rule makings to implement the Bipartisan Campaign Reform Act of 2002. The first issue is the law’s efforts to outlaw the big money donations that were flowing to the national political parties from unions, companies, and wealthy individuals. Reformers call it soft money. One of the FEC’s toughest challenges: It is being asked to issue regulations based on a law that, among other things, nullifies some of its own prior rulings. “The big picture here is that it’s the commission which interpreted the old law in a way that opened up the soft money law in the first place,” says Don Simon, a lawyer with Washington, D.C.’s Sonosky, Chambers, Sachse, Endreson & Perry who supports the law. “The commission shouldn’t interpret the new law to open up loopholes and frustrate the whole point.” But for commissioners, the FEC is doing its job, which is to administer the nation’s campaign finance laws. “We are here to enforce the law,” says Chairman David Mason, a Republican. The FEC’s task is relatively straightforward, he says, “so long as Congress is reasonably clear about what it is they want us to do. But when you get into other areas, we get allegations that Congress intended to do this and you read the law and not only is the intent not clear, it’s hard to read at all. That could be a problem.” That is why the FEC’s power to interpret the law through regulations is so important. Under the campaign finance reform law, the agency has 90 days to issue soft money regulations. Staff members have already been putting in long hours, working late weeknights and spending Saturdays and Sundays in the commission’s E Street, N.W., offices. The hearings ended a little after 1 p.m. on Wednesday, June 5. Staff members had until June 10 to finish a final draft version for the commissioners. The FEC’s regulation committee — Democratic Commissioner Karl Sandstrom, Republican Commissioner Michael Toner, and various staffers — is the conduit between commission and staff. By tradition, each commissioner represents the views of his party members in committee meetings. The regulation committee will meet today to go over the first version of the final regulations, hammering out areas of consensus or disagreement. Based on that and more informal feedback and its own legal interpretations, the staff will finish a rule for formal presentation at the FEC’s June 19 meeting. There, commissioners will debate the details, offering amendments to overhaul the staff version. A vote of four commissioners is needed to pass the new regulations. The new campaign law was a part of the effort by reformers to clean up campaign finance. The bill was going to more strictly and more clearly regulate the millions of dollars flowing into the political parties and individual campaigns every election cycle. But the discussions at last week’s public hearings made the new law sound just as murky as what existed before. LACKING DEFINITION “I think a number of terms used in the statute weren’t defined,” says Commissioner Sandstrom. “One could see how different people gave different meanings to those terms. It became abundantly clear to me that in order to ask people to comply with the law and regulations, they need to be told what those terms mean.” So the commission used the two days to hear what various groups thought those terms should mean. Supporters of the bill argued for a broad reading. Everyone else argued for a narrow interpretation. The Democrats and Republicans teamed up in their testimony, with lawyers for both sides nodding with each other and playing off each other’s answers to argue for a more limited reading of the law. The bill’s congressional sponsors, namely Sens. John McCain, R-Ariz., and Russell Feingold, D-Wis. and Reps. Christopher Shays, R-Conn., and Martin Meehan, D-Mass., wrote the commission laying out every provision they said the FEC had wrongly interpreted. But the parties, state committees, and nonprofits, many of which opposed the legislation or some portion of it, started their testimony by saying that the views of four lawmakers are not legislative intent and that their views of the law are just as valid as the drafters’. Joseph Sandler, a partner at D.C.’s Sandler, Reiff & Young and counsel for the Democratic National Committee, quoted case law to support that point. “To the extent the commission relies on post hoc declarations of the sponsors as to the intent of the law, it would indeed be on shaky ground,” he said at the hearing. SECRET AGENT Then those who testified and the commissioners got down to substantive issues. Many agree the law was clear in banning national parties from raising or spending soft money. But to prevent what supporters saw as potential loopholes, the law also regulates actions of other entities, such as state parties or outside groups funded by national parties. It’s those rules that some commissioners and organizations say are unclear. Many arguments during the two days of hearings were essentially over semantics. Commission members and witnesses went back and forth debating the meanings of various words in the law. The word agent became a focal point of discussion. Agents working on behalf of a national party would not be allowed to raise soft money. But the commission asked about who would be considered an agent. The law’s text does not specifically define the term. The law’s sponsors and other reformers argued it’s clear that the law relies on a common law definition of agent. But some commission members and many witnesses disagreed, arguing for the use of a narrower, more specific definition. The hearings also focused on how to define two key phrases — promote, support, oppose, or attack and directly or indirectly establish, finance, maintain, or control. The “promote” language would be used to judge if an ad was in fact a campaign advertisement. The commission’s rule proposes a definition under which the ad would have to “unmistakably and unambiguously” promote a candidate. Reformers say they clearly meant a more expansive definition. The “control” phrasing would be used to judge when outside groups are de facto arms of the national political parties. National parties would not be able to give any money to or to direct donations to these groups. Nonprofit groups argued for a narrow interpretation. The reformers once again favored a broad reading. Reformers emerged from the hearings disappointed, noting what they called “hostility” toward the law by some commissioners. “The commission is divided along 4-2 grounds,” says Larry Noble, former FEC general counsel who now runs the Center for Responsive Politics, which tracks campaign donations and spending. “With a few exceptions, it was clear that both the four commissioners and the party committees saw this law as a burden that needed to be dealt with.” Commissioners Sandstrom, Toner, Mason and Republican Bradley Smith are pointed to as a probable voting bloc that will shape the rules. Yet these commissioners contend that characterizing them as a coalition is too strong, saying that there will be shifting vote counts on different provisions. But commissioners also say there will not be a 3-3 deadlock, which would mean no new regulations. “I don’t think there is a substantial risk that we won’t be able to amass four votes for a final rule,” says Mason. After completing this rule the commission has six other rule makings on this law to complete, with three more public hearings scheduled. And the commission is also defending the entire law in court from constitutional challenges. Any rules the commission issues could face legal challenges of their own. Commissioners say they are not letting these issues — or the criticism the agency has received recently — to affect the rule making. “We are in a position where we are going to get criticized no matter what we do,” says Mason.

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