This article originally provided by The State Journal

August 11, 2005

Kessler: It's Time to Crack Down on 527s

Independent political groups were a big factor during 2004 election season.

Story by Juliet A. Terry Email | Bio

MORGANTOWN -- The 2004 election season is long gone, but it left a bitter taste in Jeffrey Kessler's mouth.

Kessler, the Democrat state senator from Marshall County, still rants about those 527s, the independent political groups that dominated the airwaves most of last year. The groups are regulated by the Internal Revenue Service, but those regulations do not stretch far. They're basically political parties without candidates, and Kessler believes they need to be reined in.

As chairman of the Senate Judiciary Committee, Kessler may get the opportunity to do just that. He tried it earlier this year and convinced many senators to agree with him. Perhaps next year he'll be able to convince the House of Delegates and Gov. Joe Manchin to sign onto new regulations for 527 groups.

"We still need 527 reform. I have yet to see a 527 that is positive," Kessler said.

Kessler alluded to groups such as And For the Sake of the Kids and West Virginia Consumers for Justice, two 527s that spent millions on the 2004 race for a seat on the West Virginia Supreme Court of Appeals. The Kids, who successfully advocated the defeat of incumbent Justice Warren McGraw, largely was funded by Massey Energy CEO Don Blankenship, while the Consumers for Justice was funded predominantly by West Virginia Consumer Attorneys Inc., a private entity that did not disclose who its individual donors were.

Kessler said he has been meeting with Manchin and hopes to bring the governor on board with his push for stricter controls on the independent groups.

"If you can't track the source of their funds, then maybe we should limit the amount people can contribute to them," Kessler said. "You shouldn't be able to, under some good-sounding moniker, go out and say something negative."

With 527s already on his 2006 legislative agenda, Kessler looked at other issues that have taken up his committee's time and may return for some more attention.

In the civil justice reform arena, Kessler is nearly as cynical about some of the state's latest changes as he is about the lack of control of 527 groups.

"My auto insurance hasn't gone down. It's the same as before," Kessler said, referring to legal changes demanded by the insurance industry with the promise that automobile insurance rates would fall within 90 days of the legislation's passage.

Kessler said insurance companies were supposed to provide premium reductions accompanied with a recognition that rebates were brought about because of tort reform enacted by the Legislature. But at least one of his constituents got a different result from the 2005 civil justice law changes. According to a letter one constituent received from his insurance carrier:

"Your costs for this policy have not been reduced because of civil justice reforms enacted by the West Virginia Legislature in 2005 and signed into law by the governor."

Kessler said he doesn't mind enacting reforms if they are well reasoned and well intentioned, but "I'm concerned there's no linkage between what we're doing and promised rate reductions."

"We need to look at what effects, in real dollars, these reforms are having," he said.

Medical liability reforms enacted in 2001 and 2003 may not have reduced the cost of insurance for physicians yet, he said, but at least the "crisis mentality" has abated, and West Virginia has been more successful recruiting new physicians to the state.

"But I don't think it's been effective in the cost of insurance," he said. "I'm paying attention to what New York's (Attorney General) Eliot Spitzer has been looking into with some of the price gouging that's been going on with insurance companies."

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