527

Democrats & Soft Money


The Democratic Party prides itself on having made the landmark 2002 McCain-Feingold campaign finance reform bill the law of the land.
As the party’s presidential hopefuls were vowing to kick special interests out of the White House,
a Federal Election Commission (FEC) shifted media attention to the loopholes in the campaign
finance law that Democrats have capitalized upon to finance that mission. Democrats have a long way
to go to catch up with President Bush’s campaign fund-raising advantage. While Senator John Kerry,
the Democratic front-runner, has raised $7 million so far this year,
Bush has raised $12.9 million in the month of January alone for his re-election bid.

Democrats are hoping to bridge that gap with a new breed of political committees, such as the anti-Bush America Coming Together. The committees have successfully captured the pocketbooks of wealthy and small contributors, the airwaves, and now, the attention of FEC.
The FEC ruling, as the Los Angeles Times wrote:

“…ruled that groups registered as federal political committees — so-called ‘527 committees,’
named after the IRS [Internal Revenue Service] section under which they fall — must use contributions
subject to the federal limits on giving to individual candidates to finance ads that ‘promote, support, attack or oppose’ a federal candidate. Such funds are called hard money. But it left open,
and will have to address, the much wider use of soft money for ads that purport to be only about
issues such as healthcare reform and for partisan voter mobilization. It was a well-funded 527
committee called Republicans for Clean Air that helped derail Sen. John McCain’s presidential
candidacy in 2000. With conventional soft money gone, the 527s have become much more important.”

While Republican 527s do exist, the Republican Party would not mind seeing all 527s gone for good. The Republicans already have an edge over the Democrats in raising the up to $2,000 allowed in “hard money”
individual donations. The 527s have been bashing Bush and his party, while promoting Democratic
causes and candidates in state and federal elections. While the FEC ruling has put some restrictions on
the work of 527s, it has not shut them down. The decision, as the New York Times points out,
left a loop-hole which allows the use of
soft-money in ad campaigns
on the federal level:

“…An advertisement promoting or supporting a federal candidate can no longer be paid for with
soft money. But if it contains references to a federal and a state candidate, it can be financed
through a mixture of soft money with hard money, which is regulated and collected in smaller amounts.”

The final battle maybe ahead in Spring, when FEC will revisit the issue, but meanwhile both sides
are claiming victory. In an interview with the Washington Times, Republican National
Committee (RNC) Chairman Ed Gillespie said that:

“Today’s ruling effectively shuts down illicit 527 groups that operate in the shadows by
using unregulated soft money to influence federal elections.”

Democrats refused to see the ruling as a defeat, pointing out that the restrictions are
not tantamount to the termination of 527s’s work. In a press release, Wes Boyd, President of
a 527 MoveOn.org Voter Fund,
which claims a 2.3 million membership, stated that:

“The ruling makes clear that the MoveOn.org Voter Fund is operating within the intended meaning of
the McCain-Feingold campaign finance law, and that we can continue our activities and ads that focus
on the policies and performance of George W. Bush.”

MoveOn.org site asks its visitors to join a petition drive, advocating that “Congress must censure
President Bush for misleading the country about Iraq’s weapons of mass destruction.” In his
statement, Boyd blasted the Republican Party for attempting to use FEC to “silence” the
administration’s critics as the party filled its coffers with special interest money.
The billionaire George Soros and his business partner Peter Lewis have pledged $5 billion dollars in matching funds for MoveOn.orgs’s grass-roots
fundraising campaign.

No matter what the future of 527s is, as Time magazine points out:

“Either way Kerry is going to be outspent. In a world where soft money is technically banned,
the Republicans have the advantage…That is why, as Howard Dean’s campaign sputters to what looks
like its end, the Kerry campaign and the Democratic Party are devising a way to capture the
Internet-driven fund-raising potential that Dean unearthed.

‘One of the keys to victory for us,’ says Florida Democratic fund raiser Mitchell Berger,
‘will be to take those $100 middle-class donors and convince them that their $100 really means
something.’ But even though it has vastly expanded its donor list, the D.N.C. still managed to
raise less than half of what its Republican counterpart did.”

The Bush White House is not yearning to make campaign finance an election attack issue. Republican candidates outspend Democrats 2:1 and the Bush administration’s cozy relationship
with Enron, Halliburton, and company— are reasons enough to downplay the issue. But Kerry has
special interest skeletons of his own to hide and campaigning along the “Bush’s special interest groups
are bigger and more evil than mine” line is not a winning strategy. In the end, the Democrats would
be better off to take the moral high ground and stick not only to the letter, but the spirit,
of campaign finance reform.