A 527 organization or 527 group is a type of American tax-exempt organization named after "Section 527" of the U.S. Internal Revenue Code. A 527 group is created primarily to influence the selection, nomination, election, appointment or defeat of candidates to federal, state or local public office.
Technically, almost all political committees, including state, local, and federal candidate committees, traditional political action committees, "Super PACs", and political parties are "527s." However, in common practice the term is usually applied only to such organizations that are not regulated under state or federal campaign finance laws because they do not "expressly advocate" for the election or defeat of a candidate or party.
When operated within the law, there are no upper limits on contributions to 527s and no restrictions on who may contribute. There are no spending limits imposed on these organizations; however, they must register with the IRS, publicly disclose their donors and file periodic reports of contributions and expenditures.[1]
Because they may not advocate for specific candidates or coordinate with the candidate’s campaign, many 527s are run by interest groups and used to raise money to spend on issue advocacy and voter mobilization outside of the restrictions on PACs. Examples of 527s include American Solutions for Winning the Future, EMILY's List, Swift Boat Veterans for Truth, Texans for Truth, The Media Fund, America Coming Together, the Progress for America Voter Fund, Secretary of State Project, United American Technologies, American Right To Life Action and the November Fund. MoveOn.org was previously a 527, until they decided to shut down their 527 group as a result of "new politics offered by Barack Obama".[2]
Legal history
The line between interest and express advocacy was the source of heated debate and litigation.
Prior to the passage of the McCain-Feingold law, also known as the Bipartisan Campaign Reform Act, it was generally accepted that 527s were not covered by campaign finance laws. McCain-Feingold specifically extended certain campaign finance limitations to 527s running ads within 60 days of a general election or 30 days of a primary election. Based on the Supreme Court's decision in McConnell v. Federal Election Commission, upholding the McCain-Feingold law, many persons urged the Federal Election Commission (FEC) to use its regulatory power to extend campaign finance laws to cover these groups. The Commission held hearings in April 2004 to determine whether or not 527s should be regulated under campaign finance rules, but concluded that the law did not cover these independent 527 organizations unless they directly advocated the election or defeat of a candidate or engaged in advertising within the 30 and 60 day windows specified by Congress in the McCain-Feingold law. Federal Election Commission rulings after the 2004 election put advertisements which questioned a candidate’s character and fitness for office off limits to 527s specifically.[3]
- On September 18, 2009, the Federal Appeals Court in Washington, D.C., ruled that these groups have a First Amendment right to raise and spend freely to influence elections so long as they do not coordinate their activities with a candidate or a party.[4][5]
- In January 2010, the Supreme Court held that the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections. While corporations or unions may not give money directly to campaigns, they may seek to persuade the voting public through independent expenditure groups.[6]
- In July 2010, the Supreme Court ruling in Speechnow.org v. Federal Election Commission created independent expenditure-only committees known as Super PACs which, like 527s, can raise unlimited amounts of money from individuals, unions, associations and corporations to influence elections. These PACs must also disclose their finances to the FEC and cannot coordinate with candidates or political parties. The difference is that they may directly advocate for or against a candidate.[7]
Current litigation
Carey et al. v. FEC – RADM James J. Carey, USN (ret), chairman of the National Defense PAC, along with the PAC and a prospective donor, brought suit after the FEC deadlocked on a 2010 Advisory Opinion Request (see AO 2010-20), in which the PAC sought permission to operate a "Super-Duper" PAC, combining an independent expenditure-only PAC and PAC that makes direct contributions to candidates as a single entity for FEC purposes.[8]
Public opinion
An October 2010 Bloomberg poll found that 47 percent of Americans say they would be less likely to support a political candidate if his campaign was supported by advertising paid for by anonymous business groups. 41 percent said that it would not matter, and 9 percent said they would be more likely to back the candidate.[9]
A February 2010 poll from the Pew Research Center found that 68 percent of Americans disapprove of the Supreme Court’s decision to allow corporations to make expenditures on behalf of candidates during elections. 17 percent approve of the expenditures, and 15 percent of respondents said they were unsure.[10]
Wyly brothers and 2000 election
The first use of a 527 Organization to channel a large sum of money into the election process has been attributed to the billionaire Wyly brothers of Texas. They "played an instrumental role" when helping their desired candidate, Texas Republican George W. Bush, via a $2.5-million advertising campaign they financed using a 527 organization.[11]
2004 election controversy
George W. Bush's was elected to a second term in the 2004 presidential election, when even more campaign donations were via a 527 organization. One organization, Swift Boat "torpedoed" Massachusetts Democratic Party (United States) John Kerry presidential campaign, 2004.[12] A reported $9.45 million came from just 3 private individuals.[13][14][15] Putting those amounts in perspective, liberal contributor George Soros contributed $23.7 million to 527s, and Peter Lewis of Progressive Insurance contributed another $23.2 million dollars to 527s in 2004. [16]
Under federal election law, coordination between an election campaign and a 527 group is not allowed. The heavy spending of key 527 groups to attack presidential candidates brought complaints to the Federal Elections Commission of illegal coordination between the groups and rival political campaigns. These formal complaints included:
- On May 5, 2004, the Republican National Committee accused MoveOn.org, The Media Fund, America Coming Together and America Votes of coordinating their efforts with the John Kerry campaign.
- On August 20, 2004, John Kerry's campaign accused Swift Boat Veterans for Truth of coordinating their efforts with the George W. Bush campaign.
Several people who were involved with both organizations removed themselves to avoid the appearance of conflict. Attorney Benjamin Ginsberg pointed out that it was not uncommon or illegal for lawyers to represent campaigns or political parties while also representing 527 groups. For example, Washington attorney Joe Sandler simultaneously represented the Democratic National Committee and a 527 group airing anti-Bush ads, the MoveOn.org Voter Fund.
In 2006 and 2007 the FEC fined a number of organizations, including MoveOn and Swift Boat Veterans for Truth, for violations arising from the 2004 campaign. The FEC's rationale was that these groups had specifically advocated the election or defeat of candidates, thus making them subject to federal regulation and its limits on contributions to the organizations.[17]
Top 20 federally focused and state-focused 527 groups, 2010 election cycle
Some of these listings identify a parent organization that has created a 527 group but that also engages in many nonpolitical activities. Democratic/liberal leaning groups are highlighted in blue, Republican/conservative leaning groups are highlighted in pink.
A total of $415,784,148 was spent by these organizations alone, $201,203,605 of which was spent by Democratic/liberal groups and $214,580,543 of which was spent by Republican/conservative groups.[18][19]
Rank | Name | 2010 Fundraising | 2010 Expenditures |
---|---|---|---|
1 | Republican Governors Association | $117,129,464 | $131,823,354 |
2 | Democratic Governors Association | $55,362,218 | $64,708,253 |
3 | American Federation of State, County, Municipal Employees | $47,068,586 | $46,520,548 |
4 | Republican State Leadership Committee | $29,504,912 | $29,911,967 |
5 | American Solutions Winning the Future | $28,233,447 | $28,419,764 |
6 | Service Employees International Union | $14,923,663 | $15,534,072 |
7 | Citizens United | $9,211,311 | $9,185,145 |
8 | EMILY'S List | $9,001,964 | $10,439,329 |
9 | America Votes | $8,883,561 | $11,237,974 |
10 | Democratic Legislative Campaign Committee | $8,684,721 | $10,949,775 |
11 | College Republican National Committee | $8,389,738 | $8,621,662 |
12 | National Education Association | $7,394,838 | $7,503,113 |
13 | Citizens for Strength and Security | $7,127,814 | $7,216,173 |
14 | American Crossroads | $6,700,312 | $1,408,323 |
15 | Democratic Attorneys General Association | $6,365,202 | $7,206,207 |
16 | GOPAC | $5,600,547 | $5,210,328 |
17 | International Brotherhood of Electrical Workers | $5,354,930 | $6,685,747 |
18 | ActBlue | $4,994,165 | $4,719,415 |
19 | Laborers Union | $4,578,278 | $4,361,153 |
20 | American Federation of State, County, Municipal Employees | $4,123,743 | $4,121,846 |
Top 20 federally focused and state-focused 527 groups, 2008 election cycle
Some of these listings identify a parent organization that has created a 527 group but that also engages in many nonpolitical activities. Democratic/liberal leaning groups are highlighted in blue, Republican/conservative leaning groups are highlighted in pink.
A total of $303,309,245 was spent by these organizations alone, $178,397,267 of which was spent by Democratic/liberal groups and $117,112,322 of which was spent by Republican/conservative groups.[18][19]
Rank | Name | 2008 Fundraising | 2008 Expenditures |
---|---|---|---|
1 | Republican Governors Association | $58,942,154 | $44,625,517 |
2 | Democratic Governors Association | $35,831,960 | $26,376,784 |
3 | American Federation of State, County, Municipal Employees | $32,867,824 | $30,652,149 |
4 | Service Employees International Union | $27,432,667 | $27,839,177 |
5 | America Votes | $25,959,173 | $24,491,324 |
6 | American Solutions for Winning the Future | $22,722,547 | $22,966,088 |
7 | Republican State Leadership Committee | $19,961,136 | $20,981,193 |
8 | Change to Win | $13,917,202 | $7,799,656 |
9 | EMILY'S List | $13,659,555 | $12,910,515 |
10 | The Fund for America | $12,142,046 | $12,142,044 |
11 | Democratic Legislative Campaign Committee | $9,989,627 | $12,665,087 |
12 | GOPAC | $9,322,764 | $9,407,146 |
13 | Patriot Majority Fund | $8,266,627 | $8,108,121 |
14 | College Republican National Committee | $6,956,285 | $7,537,976 |
15 | RightChange.com | $6,736,563 | $5,578,187 |
16 | Democratic Attorneys General Association | $6,704,076 | $5,441,100 |
17 | UNITE HERE | $6,480,432 | $6,957,280 |
18 | Citizens United | $6,477,080 | $6,016,215 |
19 | All Children Matter | $6,031,500 | $3,368,861 |
20 | Progressive Majority | $5,743,779 | $7,444,825 |
Top 20 federally focused and state-focused 527 groups: 2006 election cycle
Some of these listings identify a parent organization that has created a 527 group but that also engages in many nonpolitical activities. Democratic/liberal leaning groups are highlighted in blue, Republican/conservative leaning groups are highlighted in pink.
A total of $171,045,165 was spent by these organizations alone, $121,665,587 of which was spent by Democratic/liberal groups and $49,379,578 of which was spent by Republican/conservative groups.[20][21]
Rank |
Name | 2006 Fundraising | 2006 Expenditures |
---|---|---|---|
1 | Republican Governors Association | $28,798,367 | $15,993,537 |
2 | Service Employees International Union | $25,053,546 | $28,212,510 |
3 | Democratic Governors Association | $18,526,787 | $8,508,850 |
4 | America Votes | $14,391,893 | $14,106,236 |
5 | EMILY's List | $11,776,201 | $11,128,005 |
6 | Republican State Leadership Committee | $11,340,863 | $10,132,510 |
7 | American Federation of State, County, and Municipal Employees | $9,599,404 | $8,336,574 |
8 | Club for Growth | $7,217,080 | $8,157,383 |
9 | Change to Win | $7,061,423 | $2,592,376 |
10 | Progress for America | $6,175,025 | $13,000,574 |
11 | International Brotherhood of Electrical Workers | $5,538,113 | $5,529,067 |
12 | September Fund | $5,230,500 | $4,950,861 |
13 | Economic Freedom Fund | $5,050,450 | $4,835,805 |
14 | America Coming Together | $4,494,107 | $6,998,238 |
15 | Democratic Legislative Campaign Committee | $4,365,495 | $3,928,487 |
16 | Democratic Attorneys General Association | $4,083,576 | $2,630,350 |
17 | College Republican National Committee | $3,720,110 | $10,260,343 |
18 | Laborers' International Union of North America | $3,688,250 | $3,762,110 |
19 | Progressive Majority | $3,262,427 | $4,845,486 |
20 | Bluegrass Freedom Fund | $3,150,125 | $3,135,863 |
As of June 30, 2008. Source:[20] Source:[21] |
Top 20 federally focused and state-focused 527 groups: 2004 election cycle
Some of these listings identify a parent organization that has created a 527 group but that also engages in many nonpolitical activities. Democratic/liberal leaning groups are highlighted in blue, Republican/conservative leaning groups are highlighted in pink.
A total of $439,709,105 was spent by these organizations alone, $307,324,096 of which was spent by Democratic/liberal groups and $132,385,009 of which was spent by Republican/conservative groups.[18][19]
Rank | Name | 2004 Fundraising | 2004 Expenditures |
---|---|---|---|
1 | America Coming Together | $79,795,487 | $78,040,480 |
2 | Joint Victory Campaign 2004* | $71,811,666 | $72,588,053 |
3 | Media Fund | $59,414,183 | $57,694,580 |
4 | Service Employees International Union | $48,385,367 | $47,695,646 |
5 | Progress For America | $44,929,174 | $35,631,378 |
6 | Republican Governors Association | $33,848,421 | $34,301,889 |
7 | Democratic Governors Association | $24,172,761 | $24,125,938 |
8 | American Federation of State, County, and Municipal Employees | $22,227,050 | $22,332,587 |
9 | Swift Vets and POWs for Truth | $17,008,090 | $22,565,360 |
10 | MoveOn.org | $12,956,215 | $21,565,803 |
11 | College Republican National Committee | $12,780,126 | $17,260,655 |
12 | New Democrat Network | $12,726,158 | $12,524,063 |
13 | Citizens for a Strong Senate | $10,853,730 | $10,228,515 |
14 | Republican State Leadership Committee | $10,762,907 | $10,682,312 |
15 | Club for Growth | $10,645,976 | $11,943,415 |
16 | Sierra Club | $8,727,127 | $6,261,811 |
17 | EMILY's List | $7,739,946 | $8,100,752 |
18 | Voices for Working Families | $7,466,056 | $7,202,695 |
19 | AFL-CIO | $6,583,572 | $6,473,110 |
20 | League of Conservation Voters | $6,049,500 | $5,078,116 |
As of June 30, 2008.[18][19] |
*Joint Victory Campaign 2004 is a joint fund-raising committee run by America Coming Together and the Media Fund. Money raised by JVC is divided between these two beneficiaries. Combining receipts for these three groups would result in double-counting.
See also
- 501(c)(3)
- 501(c)(4)
- Campaign finance in the United States
- Campaign finance reform
- Issue versus express advocacy
- Opposition research
- Political action committee
References
- ^ The Center for Public Integrity, 527 Frequently Asked Questions http://projects.publicintegrity.org/527/default.aspx?act=faq#5
- ^ MoveOn To Close Its 527 In Response To Obama's Candidacy, talkingpointsmemo.com
- ^ Luo, Michael (2008-06-12). "Ready to Attack Obama, if Some Money Arrives". New York Times. http://www.nytimes.com/2008/06/21/us/politics/21ads.html?hp=&pagewanted=all.
- ^ EMILY’s List v. FEC, 581 F.3d 1 (D.C. Cir. 2009).
- ^ Court Backs Outside Groups' Political Spending http://www.nytimes.com/2009/09/19/us/politics/19donate.html
- ^ "Citizens United v. Federal Election Commission". SCOTUSblog. http://www.scotusblog.com/case-files/cases/citizens-united-v-federal-election-commission/. Retrieved April 1, 2012.
- ^ "Super PACs". OpenSecrets. http://www.opensecrets.org/pacs/superpacs.php?cycle=2010. Retrieved April 1, 2012.
- ^ Marston, Chris (April 27, 2011). "Former FEC Chair Smith joins litigation team to create "Super-Duper" PACs". Republican National Lawyers Association. http://rnla.org/Blogs/blogs/public/archive/2011/04/27/former-fec-chair-smith-joins-litigation-team-to-create-quot-super-duper-quot-pacs.aspx. Retrieved April 1, 2012.
- ^ Bloomberg national poll, conducted Oct 7-10 2010, http://media.bloomberg.com/bb/avfile/rUtERn9eLmGU
- ^ Midterm Election Challenges for Both Parties http://people-press.org/2010/02/12/midterm-election-challenges-for-both-parties/
- ^ Stein, Sam (May 25, 2011). "McCain Fundraiser Once Part Of 527 Attack Ad Against Him". Huffington Post. http://www.huffingtonpost.com/2008/06/17/mccain-fundraiser-once-pa_n_107614.html. Retrieved April 1, 2012.
- ^ Baram, Marcus (May 25, 2011). "Wyly Brothers Gave Millions To Over 200 Republican Candidates". Huffington Post. http://www.huffingtonpost.com/2010/07/29/wyly-brothers-republican-campaign-donations_n_664550.html. Retrieved April 1, 2012.
- ^ "Swift Vets Top Contributors, 2004 Cycle". opensecrets. http://www.opensecrets.org/527s/527cmtedetail.asp?cycle=2004&format=&ein=201041228&tname=Swift%20Vets%20&%20POWs%20for%20Truth. Retrieved 2007-04-01.
- ^ Frank, John (2004-10-05). "ELECTION 2004 / 2 Texans dig deep for boat vet ads / Pair from Dallas kick in $3 million for group's coffers". Houston Chronicle. pp. A8. http://www.chron.com/CDA/archives/archive.mpl?id=2004_3806652. Retrieved 2012-02-12.
- ^ "Bob Perry - The Man Behind Swift Boat Veterans for Truth". fact sheet. Texans for Public Justice (self-published). http://www.tpj.org/page_view.jsp?pageid=667&pubid=422. Retrieved 2007-04-01.
- ^ "Top Individual Contributors to Federally Focused 527 Organizations, 2004 Election Cycle". OpenSecrets. http://www.opensecrets.org/527s/527indivs.php?cycle=2004. Retrieved April 1, 2012.
- ^ "FEC Collects $630,000 in Civil Penalties from Three 527 Organizations". Federal Election Commission. December 13, 2006. http://www.fec.gov/press/press2006/20061213murs.html. Retrieved April 1, 2012.
- ^ a b c d Top 50 Federally Focused Organizations, opensecrets.org
- ^ a b c d State-Focused 527 Committees Only, opensecrets.org
- ^ a b Top 50 Federally Focused Organizations, opensecrets.org
- ^ a b State-Focused 527 Committees Only, opensecrets.org
External links
- 527s: Advocacy Group Spending in the 2010 Elections from OpenSecrets.org
- Silent Partners (527 Organizations) from Center for Public Integrity, publicintegrity.org
- Tax Information for Political Organizations from the Internal Revenue Service, irs.gov
- "RNC opens assault on anti-Bush groups", CNN.com, May 6, 2004
- "Kerry files FEC complaint against swift boat group", CNN.com, August 21, 2004
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