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As public advocates and political operatives ramp up for the 2004 presidential race, a fierce debate continues to rage at the Federal Elections Commission (FEC) about how to regulate nonprofits’ political activities under the new campaign finance laws [see “Nonprofits Gagged by FEC Ruling,” 2/9/04]. On Wednesday, the authors of the legislation, Senators Russ Feingold and John McCain, testified before the Senate Rules Committee how they hope the FEC will regulate two broad categories of nonprofits: those registered under section 527 of the tax law and those registered under section 501. In separate statements, McCain and Feingold argued that 527 organizations (which include political action committees and political parties that, by definition, seek to influence the election of candidates) should not be allowed to spend unregulated “soft money” on federal campaigns. They also said that 501 groups (such as issue advocacy and public education organizations) should not be limited by the same rules. The FEC is expected to issue a decision in May about 527 groups’ use of soft money, which will likely have implications for 501 groups as well.

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