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THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release June 5, 1997

                  TEXT OF A LETTER FROM THE PRESIDENT
           TO THE MEMBERS OF THE FEDERAL ELECTION COMMISSION

June 4, 1997

Members of the

Federal Election Commission
c/o Office of the General Counsel
999 E Street, N.W.
Washington, D.C. 20463

To the Members of the Federal Election Commission:

I am writing to you, pursuant to 11 CFR Part 200, to request that you take action under your existing statutory authority to ban "soft money" and end the system under which both political parties compete to raise unlimited sums from individuals, labor unions, and corporations.

The rules governing our system of financing Federal election campaigns are sorely out of date. Enacted more than two decades ago when election campaigns were much less expensive, the rules have been overtaken by dramatic changes in the nature and cost of campaigns and the accompanying flood of money. Today, money is raised and spent in ways that simply were not contemplated when the Congress last overhauled our campaign finance laws. We must bring the rules up to date to reflect the changes in elections and campaigning.

An important step in this process would be to change the rules governing the use and solicitation of "soft money" -- funds not subject to the contribution limitations and prohibitions of the Federal Election Campaign Act of 1971, as amended (FECA). Currently Federal Election Commission (FEC) regulations (11 CFR 106.5) allow political parties to raise and spend soft money in elections involving State and Federal candidates by providing an allocation formula between Federal and non-Federal expenses incurred by party committees. These regulations, and limited additional guidance provided through advisory opinions, are the basis upon which party committees make expenditures and raise funds with respect to Federal and State elections. The use of soft money by party committees is largely based on the direction provided in these regulations.

Whatever the merit of these regulations at the time they were adopted, it has become abundantly clear today that they are no longer adequate to the task of regulating campaigns. The role of soft money has grown dramatically in the past several elections so that by the 1996 elections the two parties raised more than $250 million, more than triple the total of 4 years before.

The current allocation system, in short, is simply outmoded. Accordingly, I propose that the FEC adopt new rules requiring that candidates for Federal office and national parties be permitted to raise and spend only "hard money" -- funds subject to the restrictions, contribution limits, and reporting requirements of FECA.

The soft money ban I seek achieves similar goals as provisions of the "Bipartisan Campaign Reform Act of 1997," introduced by Senators John McCain and Russell Feingold, and Representatives Christopher Shays and Martin Meehan. Specifically, I am requesting that the FEC consider new rulemaking to accomplish the following:

Prohibit national political parties (and their congressional campaign committees or agents) from soliciting or receiving any funds not subject to the limitations or prohibitions of FECA. (This action would preclude, for example, contributions directly from corporate or union treasuries, or contributions from individuals in excess of the amount an individual can give to a national party's Federal account.)
Prohibit any Federal officeholder or candidate (and his or her agents) from soliciting or receiving any funds not subject to the limitations or prohibitions of FECA.
Provide that any expenditure by any national, State, or local political party during a Federal election year for any activity that influences a Federal election (including any voter registration or get-out-the-vote drive, generic advertising, or any communication that refers to a Federal candidate) must be paid for from funds subject to FECA. (This would end the allocation system, currently authorized by the FEC, under which hard and soft money are mixed for campaign activities that affect both State and Federal elections.)

These steps, available to you under your existing statutory authority, will enable our election laws to catch up with the reality of the way elections are financed today, and along with new campaign finance reform legislation, will take significant strides toward restoring public confidence in the campaign finance process.

Sincerely,

WILLIAM J. CLINTON

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