Legal think tank accuses of violating campaign-finance laws

Thursday, April 27, 2000

A conservative foundation recently urged the Federal Election Commission to review its approval last fall of a Web site that provides information on federal candidates and campaigns.

The National Legal and Policy Center contends that, which also offers e-mail links and Web space to candidates, started as a nonprofit venture but has recently become a commercial one. Such activity, center officials say, should qualify under federal election laws as corporate contributions.

“I was surprised when the FEC allowed to provide candidate information when at the same time it was cracking down on other nonprofit groups for doing the same thing,” said Peter Flaherty, the center’s president. “There is no defense for this ‘bait and switch.’ It is clearly illegal for to get a favorable advisory opinion as a nonprofit, and then turn around and become a privately held, commercial operation.” started in 1996 as the Democracy Network or DNet, a Web operation operated by the League of Women Voters, the Center for Governmental Studies and a number of other political, nonprofit groups.

In October 1999, the FEC approved the site because operators offered its online services to all candidates equally. Because the site was nonprofit, the commission concluded that its political activity “is exempt from the definition of ‘expenditure’ … and is, therefore, permissible.”

But the National Legal and Policy Center, in its complaint with the FEC, alleges that the League of Women Voters and the other groups acted in bad faith in representing their site as a nonprofit.

“The League of Women Voters is not only guilty of violating the law but of hypocrisy,” Flaherty said. “The league is one of the most vocal proponents of what they call campaign-finance reform. Here they are, however, doing what is already illegal, and doing what they would further restrict anyone else from doing.”

Last February, bought DNet. Investors such as Knight-Ridder Ventures and AIG Developed Markets Private Equity Fund have injected as much as $30 million into the site.

Such an investment, the center says, makes a commercial property.

But Craig Johnson, co-founder and interim CEO of, says nothing has changed since the FEC ruled favorably for the site.

“The site allows all candidates to provide uncensored materials to all voters who wish to visit the site,” Johnson said in a statement. “The FEC concluded that Web sites such as DNet can post candidate views on issues and other information so long as that opportunity is non-partisan and offered equally to all candidates.”

Phillip Taylor, a freelance contributor, works for the Daily Press in Newport News, Va.