WASHINGTON - August 10 - Democracy 21, the Campaign Legal Center, and the Center for Responsive Politics today filed a complaint with the Federal Election Commission (FEC) charging that the pro-Republican 527 group, Swift Boat Veterans for Truth (SBVT), is illegally raising and spending soft money on ads to influence the 2004 presidential elections.

The three campaign finance groups have filed similar complaints with the FEC this year against two other 527 groups running ads to influence the presidential election, the pro-Democratic group, The Media Fund, and the pro-Republican group, Progress for America Voter Fund. Those complaints are pending at the FEC. (See www.democracy21.org for copies of all the complaints.)

"The ads being run by Swift Boat Veterans for Truth plainly are illegally financed with soft money," according to Democracy 21 President Fred Wertheimer.

"Longstanding campaign finance laws and Supreme Court decisions, including the recent McConnell decision, make clear that SBVT must register as a federal political committee and comply with federal campaign finance contribution limits. SBVT is violating both of these requirements," Wertheimer stated.

According to an IRS disclosure report as of June 30, 2004, SBVT has been funded largely by soft money contributed by Houston developer Bob Perry, described in an August 8, 2004 article in the Los Angeles Times as the most prolific political donor in Texas and a contributor to President Bush's last four campaigns.

The ad being run by SBVT unequivocally attacks the Democratic presidential nominee, Senator John Kerry. According to an August 6, 2004 article in The New York Times, the ad "attacks Senator John Kerry, accusing him of lying about his war record, including the circumstances surrounding his medals, and betraying his comrades by later opposing the war." According to The New York Times, a spokesman for SBVT said the group intends to spend $500,000 to run the advertisement attacking Senator Kerry's war record.

According to an August 6, 2004 interview on CNN, Andy Horne, a member of SBVT, when asked if the ad was produced and made to influence the presidential election in November stated, "Yes, of course."

"SBVT has one purpose, which is to defeat Senator Kerry in the 2004 presidential election. Its ad is clearly being run for that purpose," Wertheimer stated. "A political group whose major purpose is to influence a federal election and that spends more than $1,000 to influence a federal election must comply with federal limits on the contributions it receives," Wertheimer stated. "The recent Supreme Court decision in the McConnell case makes this very clear and also makes clear that the absence of express advocacy in the SBVT ad attacking Senator Kerry does not mean SBVT can ignore the federal campaign finance laws, including limits on the contributions it receives."

"The failure of the FEC to prevent 527 groups like SBVT, The Media Fund and Progress for America Voter Fund from illegally spending soft money on ads to influence the presidential election is a national scandal," Wertheimer stated. "This so-called 'enforcement' agency has abdicated its statutory responsibility to properly interpret and enforce the campaign finance laws and has ignored the Supreme Court's recent decision in the McConnell case. The rogue FEC is not merely AWOL from its job; it has been a complicit enabler of the illegal soft money activities by 527 groups which are taking place in the 2004 elections."

SBVT is a "Federal Political Committee," Acting in Violation of Law

Swift Boat Veterans for Truth was established on April 23, 2004 as a "political organization" under section 527 of the tax code. "Although it describes itself as a 'Special Purpose Political Action Committee,' SBVT has not registered as a 'political committee' with the FEC," according to the complainants. The complaint asserts that SBVT is in fact a federal political committee under the law and is in violation of the restrictions applicable to federal political committees.

According to the complaint:

[SBVT] is an entity which (1) has a "major purpose" to influence candidate elections, and in particular, federal candidate elections, and (2) has received contributions or made expenditures of more than $1,000 in a calendar year. Because SBVT meets both parts of this test, it is a federal "political committee" and is accordingly subject to the contribution limits, source prohibitions and reporting requirements that apply to all federal political committees. Because it has not complied with these rules applicable to federal political committees, it has been, and continues to be, in violation of the law.

The complaint cites a press release announcing SBVT's formation, stating that the organization "has been formed in order to bring the truth about Kerry to the American people." The press release goes on to state, according to the complaint, that it "intends to discuss Kerry's war crimes charges, Kerry's record and to request that Kerry authorize the Department of Defense to release the originals and the complete files relating to his military service and medical military records."

A recent article in the Los Angeles Times, cited in the complaint, reports that SBVT has begun airing a 60-second television ad in three presidential "battleground" states, Ohio, West Virginia and Wisconsin, "as part of a multimedia effort to discredit Kerry's wartime record, a cornerstone of the Democratic campaign."

The complaint states that the ad directly attacks Senator Kerry, and quotes Vietnam veterans who say, for example, "John Kerry is no war hero," and "John Kerry cannot be trusted."

According to its IRS filings, SBVT raised $158,750 in the quarter ending June 30, 2004, the complaint says. "Of this," according to the complaint, "$100,000 was contributed by a single donor, Bob Perry, who The New York Times identifies as 'a Houston developer and major contributor to Republican campaigns.' According to The Times, a spokesman for SBVT said the group intends to spend $500,000 to run the advertisement attacking Senator Kerry's war record."

The complaint argues that the money SBVT has spent on ads that attack and oppose a federal candidate are expenditures covered by the campaign finance laws because the so-called "express advocacy" test does not apply to section 527 groups and thus does not serve to limit the federal statutory definition of expenditures to influence a federal election made by such groups.

The complainants also note that "to the extent that SBVT is wrongly treating contributions required to be reported under FECA instead as donations to a section 527 account, the public, including complainants, and the Commission have no assurance that all contributions required to be disclosed under FECA are properly being disclosed, or that the total amount of contributions to SBVT is being disclosed."

"Like its pro-Democratic counterparts, the overriding purpose of SBVT is to influence the presidential elections," Wertheimer said. "And like its pro-Democratic counterparts, this pro-Republican 527 group meets the campaign finance law's test to identify political committees that must register with the FEC and comply with federal campaign finance limits. SBVT is acting in violation of the law and the FEC must act to stop this and the other violations of law by 527 groups."

FEC Exhorted To Stop Allowing Circumventions of Law

As in their previous filings, the complainants again took aim at the FEC and its role in subverting the nation's campaign finance laws by allowing illegal circumventions of the law, quoting the Supreme Court in McConnell which stated that FEC regulations "subverted" and "invited widespread circumvention" of the Federal Election Campaign Act.

The complainants wrote:

It is critically important that the Commission not repeat this history here. The Commission must take steps to ensure that it does not once again invite "widespread circumvention" of the law by licensing the injection of massive amounts of soft money into federal campaigns, this time through section 527 groups whose major, indeed overriding, purpose is to influence federal elections.

View the FEC complaint filed August 10, 2004 against Swift Boat Veterans for Truth

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