For those who’d like to impress friends with their knowledge of campaign finance, but can’t tell a 501(c)4 from a 501 (c)3, Robert Bauer’s site, www.softmoneyhardlaw.com provides the latest news on how money is flowing. His language can be dense and technical, but on the whole he explains the issues clearly, including what the 527 debate is all about.
Named after their tax-designation, 527 organizations are groups operating independently of any candidates or political parties. This year, many 527s have been raising and spending large sums of money in support of candidates. Federal campaign finance rules say 527s can’t have any contact with the candidates, but also that their spending is unlimited (the lack of limits means they deal in “soft money”). As a professor at the journalism school first noticed, 527s operate as “shadow parties” to the national parties. The Media Fund, which is campaigning against President Bush, is a 527.
The President and his campaign were worried about the growth of liberal 527s, so they took the issue to the Federal Elections Commission. The 527s, they say, are acting outside of recent campaign finance legislation. The FEC has heard testimony from just about everyone in the country and is drafting rules on the groups.
One of the rules under consideration is designating a 527 as a “political committee,” subject to spending limits, if its major purpose is supporting a candidate. It doesn’t sound too controversial, but Bauer points out that the term “major purpose” is vague. He also shows something more unnerving: this new rule can give incumbents a definite spending advantage. In his post, 527 Rules and the Incumbent Effect: Looking at a Recent Example, he shows how a candidate in office can use taxpayer money to make claims, but outside groups cannot spend money to refute those claims. Why? If a group buys an ad criticizing the claims, then it will appear to be criticizing the candidate. And, if it’s criticizing a candidate, then it must be supporting the candidate’s opponent. If it’s supporting the candidate’s opponent, it’s a political committee subject to regulation. Got that? Bauer explains it better here(you may have to scroll down).