Today is Thursday, 7th November 2024

527s – "Shadowy" Groups Hidden in Plain Sight

The Hill newspaper reported that Democrats might have changed their tune on 527 political organizations. Apparently too much money went to Republican leaning 527s last cycle for Democrats’ taste.  Let’s check the history on this. 

 

In 2002, Democrats largely supported McCain-Feingold’s prohibition on soft money in federal elections.  The reason – Republicans had a perceived edge in corporate fundraising.  Last cycle Democrats staunchly opposed efforts to reform 527 groups’ use of soft money in federal elections.  The reason – Democrat leaning 527s were out raising Republican groups by a reported 3-1 margin.  Now, Democrats are for revisiting the 527 issue.  The reason – Democrats believe that Republican groups are receiving too much money.  The largest 527 organization last cycle was the Republican Governors Association, the Democratic Governors Association was second, and the Republican State Leadership Committee pulled in fourth.

 

This isn’t being raised because of concerns about good law or public policy; it is about who has the most money and how to keep your opponent from getting it.  What are lost in eternal flip-flop over campaign finance are the facts – including the most basic facts.  The article quotes California’s U.S. Senator Diane Feinstein on hearings she intends to hold, “I’d like to know exactly what 527s are doing. My exposure to them is necessarily limited, as it is for most members.”

 

Senator Feinstein, I would like you to meet the Feinstein for Senate Committee – a 527.   Feinstein for Senate Committee, meet Senator Feinstein.

 

And look, we also have the Democratic National Committee, the California Democratic Party, and Moveon.org.  All of these groups are 527s.  Each one of them is defined in the IRS Code Section 527.  Something tells me Senator Feinstein might have had more than limited exposure to at least a few of these 527s. 

 

The fact is not all 527s are created equal. 

 

Senator Feinstein’s committee, the DNC, the California Democratic Party all report to the F.E.C. The DGA does not participate in federal elections, reports to the IRS, and has state PACs where necessary.  Of the groups listed above, only MoveOn.org is involved in federal elections and does not report to the F.E.C.  Of the top four 527 groups, the three listed in the article, RGA, DGA and RSLC, aren’t involved in federal elections AT ALL. 

 

So, before the Democrats flex their new majority muscle and change their position again, let’s take a step back and remember that inherent in any campaign finance regulation is a limitation on free speech.  The ability to speak publicly on the issues of the day is a fundamental tenet of our democratic society, and limitations on who can give what to whom and say what places severe limits on that basic right.  

 

In all honesty, 527 groups are sometimes the best place for a small donor to get the most bang for their buck.  A rush to over-regulate (never an issue for most Democrats) because of a perceived shift in the campaign finance sands is the ultimate case of bad facts making bad law.

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