July 13, 2000 | Read Time: 1 minute
President Clinton has signed into law new public-disclosure requirements for certain types of tax-exempt lobbying groups, known as “527 organizations” because of the section of the Internal Revenue Code under which they are organized.
Under the law, which took effect July 1, 527 organizations must periodically disclose information about their contributions and expenses, including the names of their donors. They must also notify the Internal Revenue Service within 24 hours of being formed. Previously, 527 organizations — which are often used to buy advertisements to support or oppose issues in elections — faced few reporting requirements.
President Clinton praised the law, saying it “closes a special-interest loophole” and “will help clean up the system by forcing organizations to come clean about their donors.”
But OMB Watch, a Washington research and advocacy group, worried that the law might “create a dangerous slippery slope” that could lead to new regulations for other kinds of non-profit organizations involved in advocacy campaigns.
The advocacy group also questioned whether the law conflicts with the Constitution. In its online newsletter, the organization said the donor-disclosure requirement “is likely to raise constitutional issues concerning the right to anonymously associate with groups that are conducting issue advocacy.”
OMB Watch instead recommended applying disclosure rules similar to those that govern charitable groups. Under such a plan, 527 organizations that resembled private foundations in that they received most of their income from only one or a few donors would have to disclose the names of those donors; 527 organizations that received money from a broad base of people would not have to make such disclosures.
A copy of the law, which Congress passed as HR 4762, is available from the Library of Congress’s Web site at http://thomas.loc.gov.
