Especially concerning nonprofits are:

1. What to do about the Court’s unhappiness with the unqualified exemption for 501(c)(3)s;

2. What to do about the Court’s objection to any requirement that "electioneering communications" be defined to include only communications placed for broadcast for a fee;

Throughout the Counsel's analysis runs a reference: PASO ("promote support attack or oppose"). This rulemaking proposal puts to the Commission, unavoidably, the question of whether it will condition exemption for various kinds of political communications on the absence of any language that could be deemed to "promote, attack, support or oppose" a federal candidate.

1. PASOs and 501(c)(3)s. Under current rules, 501(c)(3)s were entirely exempt, on the assumption that the tax code, which prohibits their intervention in political campaigns, would serve the purposes of the FECA as well in keeping them in line—i.e., apolitical. But the Shays Court was skeptical, questioning whether the FEC should leave the decisions on enforcement to the IRS. The General Counsel proposes to emphasize the FEC’s responsibility to monitor 501(c)(3) behavior, without waiting on the alertness of the IRS. But the OGC draft suggests that the exemption might be conditioned on the absence of PASO in any 501(c)(3) communications, such as grassroots lobbying communications which the Code permits them, on a limited basis, to conduct.

2. PASO and the "fee" paid for broadcasts. The Commission wishes to preserve the ability of stations to run public service advertisements featuring federal candidates. These ads are run without a fee; and the Shays Court believed that, even if unpaid, these ads constitute "electioneering communications." The Commission suggests that perhaps the PSAs could be let free, in the public interest, if any such ad is devoid of the offending PASO language.

The proposed rule can be found here

Posted by Jennifer Lowe, 03:13:57 PM



Big PhRMA Spends a Ton of $$in CA for Ballot Initiatives
The Pharmaceutical Research and Manufacturers of America (PhRMA), the D.C.-based lobbying outfit for the pharmaceutical industry, has raised more than $72 million to get its message out about two ballot initiatives in California. And that pot of money is raising the ire of the group’s opponents.

“Our perspective is, it’s an outrageous amount of money. It’s out of bounds with normal [ballot-initiative] spending,” said Kristina Wilfore, executive director of the Ballot Initiative Strategy Center in D.C, a liberal clearinghouse for ballot measures across the country. “The drug companies are making such big profits, they think they can buy this.”

The fund’s major donors include GlaxoSmithKline, Merck, Pfizer and Johnson & Johnson, among others.

According to Wilfore’s group, the coffers of the PhRMA California Initiative Fund are larger than any other single industry group that has worked on ballot initiatives in the past, although some industries have come close. Automakers ponied up $65 million in 1988 when the state was considering five auto insurance reform measures, and tribal gaming interests raised more than $63 million in 1998 over a casino amendment.

The drug companies are fighting against Proposition 79, which would help state negotiators secure cheaper prescription drug prices for uninsured residents by removing from the Medi-Cal preferred drug list the drugs from companies that wouldn’t participate in the discount program. At the same time, PhRMA and its allies are pushing for Proposition 78, a measure similar to one in Ohio that would establish a discount drug program in the state.

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Posted by Jennifer Lowe, 12:04:09 PM

Wednesday, August 03, 2005