Proposed Changes in Financial Disclosure Law for 527 Political Organizations

PROPOSED CHANGES IN FINANCIAL DISCLOSURE LAW FOR 527 POLITICAL ORGANIZATIONS -- (Extensions of Remarks - September 10, 2004)

Mr. LARSON of Connecticut. Mr. Speaker, today I rise to draw my colleagues' attention to a bill I have introduced to address concerns that have been expressed about political organizations referred to as "527's". This bill, H.R. 5013, would give the Department of the Treasury, the Federal Election Commission, and the American people a better understanding of 527 organizations by attempting to subject them to the same type of reporting requirements as PAC's and other political organizations.

This bill would make 527's, which is the section of the Internal Revenue Code under which they are registered, more transparent through the four main components of this bill.

First, any political organization that meets defined minimum financial requirements must disclose this information to the Department of the Treasury. Second, political organizations that raise, spend or intend to raise and spend over $25,000 file disclosure reports with the IRS monthly. Previously, organizations in this category were only required to file quarterly. Third, organizations that have less than $25,000 in receipts must file quarterly. Fourth, the Department of the Treasury and the Federal Election Commission must work together to improve the database disclosure system.

This bill will provide the American people with more information about who is donating to the political process and how that money is being spent. If we want to inspire and encourage more Americans to participate in the political process, we must make all aspects of the process accessible to them.

The guidelines in my bill will expose political organizations' donors and demonstrate they have nothing to hide. Moreover, this information will help Americans to make more informed choices.

I believe that efforts to restrict 527 organizations could raise First Amendment concerns and may merely result in their reconstitution as 501©4, 501©5 and 501©6 organizations, which have virtually no public disclosure requirements. I believe that it would be more beneficial to our political process to mandate greater transparency of 527's rather than attempting to shut them down or otherwise curtail their participation in the political process. Therefore, Mr. Speaker, I urge my colleagues to support this bill.