Federal Judge Rejects Campaign Finance Law Plea

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The New York Sun

A federal judge in Washington has rejected a plea by an anti-tax group, the Club for Growth, to end a government-backed lawsuit charging the organization with campaign finance law violations.

Judge Ricardo Urbina ruled Monday that the Federal Election Commission acted illegally when it filed the suit in September because the board authorized the litigation before completing a conciliation process required by law. However, the judge said the commission cured its mistake by reauthorizing the suit in December.

“Obviously, we’re disappointed with the decision,” the executive director of the Club for Growth, David Keating, said. “Essentially, what the judge was saying is the case was improperly filed but we’re going to let them proceed anyway.”

Mr. Keating said the group would seek permission to appeal the decision.

The suit claims that the group, which operates a political action committee and a so-called 527 committee, violated federal law in 2000 by using the less-regulated 527 committee to run broadcast ads expressly advocating the election or defeat of candidates. The 527 status is useful to political groups because donors can make gifts of any amount.

According to the suit, the commission conducted a review of the Club for Growth’s fund-raising literature and concluded that the group had operated illegally because a “major purpose” of the organization was to elect candidates.

“The problem is no one knows what any of this means or what you’re allowed to do and what you’re not allowed to do,” Mr. Keating said. “All this stuff makes mud look clear by comparison.”

Several other 527 groups, which get that designation from the tax code section under which they were organized, seem to have existed solely to influence the outcome of the 2004 presidential election. They have not been charged by the commission with violating the “major purpose” test, but President Bush has said that such groups should be outlawed.

“Some of the doctrines the commission is pushing, I think, are very bad,” a former Republican chairman of the panel, Bradley Smith, told The New York Sun yesterday. “You’ve got a Republican Party headed by Ken Mehlman that is on the warpath to shut down these groups,” Mr. Smith said. “Of course, the first target is a conservative group. … Republicans just have to wake up and smell the coffee.”

A spokesman for the commission, Ian Stirton, said the agency’s policy precludes comment on pending litigation.

The ruling, which did not address the merits of the suit, was first reported by a Capitol Hill newspaper, Roll Call.

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