501(c)(3). 501(c)(4). 527. You might have heard some of these numbers in passing and not known to what they refer. They are provisions in the tax code that allow organizations to incorporate as not-for-profits and raise unlimited money from donors who can hide their identity, for a while.
In the 2004 election, the most infamous 527 committee -- Swift Boat Veterans for Justice -- ran ads questioning John Kerry's military record. The ads may have decided the election. The Center for Public Integrity, in its
The Buying of the President 2008
, questions the hidden role these "soft" political dollars play.
Sen. John McCain (R., Ariz.), the leading Republican nominee for the presidency, worked across the aisle with Sen. Russ Feingold (D., Wis.) to pass legislation making it harder to use soft money to influence campaigns by limiting donations to political parties. It became law in 2002. It immediately landed McCain in hot water with some conservatives, who said it impinged on freedom of speech. The Supreme Court overturned portions of the law last summer, ruling that the free-speech rights of a not-for-profit group, Wisconsin Right to Life, had been unconstitutionally restrained.
The law failed to take soft money out of the equation. Independent groups have proliferated and will probably play an important role in this presidential election.
Take MoveOn.org, for example. The group's members support Sen. Barack Obama (D., Ill.) and recently asked members to vote on possible ads to air on his behalf. Obama also had help from the Services Employee International Union, an influential union that primarily represents health-care industry workers. Another group of aligned independents, Vote Hope and PowerPac.org, organized for him in California.
included voter registration drives and political advertising in the state to the tune of at least $4 million.
Obama has spoken strongly against the influence of these organizations. He criticized former candidate John Edwards for accepting help from a union 527 before the Iowa caucus:
"John said yesterday he didn't believe in these 527s. You can't say yesterday you don't believe in it, and today three-quarters of a million dollars is being spent for you."
Obama has since done little to stop the flow of money from outside organizations to help him, which appears to contradict his strong statements on the matter.
His primary opponent, Sen. Hillary Clinton (D., N.Y.), also has a 527 helping her efforts. The group calls itself the American Leadership Project, which was started by veterans hailing from the Clinton administration. The group helped Clinton in Texas, and press reports say it's also running advertising in Indiana, which has its primary Tuesday. The group introduced a hard-hitting ad in the state, prompting
from Obama's campaign, which has filed a complaint with the Federal Elections Commission (FEC) about the group coordinating with the Clinton campaign. Clinton, like Obama, has gotten money from unions, including more than $4 million from AFSCME, which represents teachers.
Clinton has supported public financing for campaigns, which suggests she supports a ban on independent groups like the one helping her. Her campaign did not comment on the group's activity for this report. In fact, the law forbids such groups to coordinate with the campaign.
There have been no reports of independent groups helping McCain. But I see a dynamic developing in the campaign that has parallels to the 2004 election. The CPI included in its most recent report an incident from that campaign. Ben Ginsberg, a lawyer for the Bush campaign, also represented the "Swift Boat" group. Ginsberg wound up resigning from his post.
The "Swift Boat" group viciously attacked Kerry's patriotism and service -- the Bush campaign could not safely have done this.
Obama's detractors have already released several such ads this year.McCain has come came out against these ads, which were funded by state Republican parties. He has asked the local GOP parties not to run the ads, and he has called for a clean campaign.
Will the ads continue to come out or will they stop? The media has lauded McCain's response to these ads. But future ads must be scrutinized because of the likely benefit to his campaign. McCain is the nominal Republican contender for the most powerful position in the world. If he can't control the soft money coming from conservative groups, what would that mean for the presidency?
Of course, the FEC should be exercising oversight on money in the election, but recent events have weakened the commission. The FEC board has not had a new member approved by the Senate since 2003. Four vacancies have brought oversight to a halt. Bill Buzenberg, executive director of CPI, said:
"We have the perfect storm. We have the first multi-billion-dollar election setting new records in funds raised, matched with the least amount of oversight ever. Worse, it could be years before the oversight problem gets resolved as billions of dollars flow unchecked into independent organizations."
Massie Ritsch, communications director at the Center for Responsive Politics, concurred: "In the most celebrated democracy in the world, in the most expensive election ever, it's embarrassing and alarming that we might not have a referee on duty to ensure that everyone plays by the rules."
Buzenberg concluded by questioning our democracy and our election process: "We like to tout our democracy, yet we are falling behind other democracies around the world. We require a federal standard for elections."