527 organization

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A 527 organization or 527 group is a type of U.S. tax-exempt organization organized under Section 527 of the U.S. Internal Revenue Code (26 U.S.C. § 527). 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.

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 expressly advocate for specific candidates or coordinate with any candidate’s campaign, many 527s are used to raise money to spend on issue advocacy and voter mobilization. Examples of 527s include Swift Boat Veterans for Truth, Texans for Truth, The Media Fund, America Coming Together, the Progress for America Voter Fund, and the Secretary of State Project.[2]

Legal history[edit]

527s are the result of a distinction made by the Supreme Court in Buckley v. Valeo. In that decision, the Court attempted to draw a limit on the extent to which campaign finance laws could regulate speech about politics. The Court's answer was that campaign finance laws could only reach party and candidate committees, organizations with the major purpose of electing candidates, or speech that "expressly advocated" the election or defeat of candidates. Determining whether or not a group had the major purpose of electing candidates depended, in turn, on whether "express advocacy" was their primary activity. In footnote 6 of the Buckley opinion, the Court limited "express advocacy" to words and phrases such as "Smith for Congress," "elect," "defeat," or other specific calls for action to vote for or against a candidate. Thus, organizations could run ads discussing candidates and issues without being subject to campaign finance restrictions, so long as they avoided such express advocacy.

The McCain-Feingold law, also known as the Bipartisan Campaign Reform Act, extended certain campaign finance limitations to broadcast ads run within 60 days of a general election or 30 days of a primary election if they mentioned a candidate, regardless of whether or not they contained "express advocacy." The Supreme Court upheld the constitutionality of this provision in McConnell v. Federal Election Commission. Based on that decision 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 broadcast advertising mentioning within the 30 and 60 day windows specified by Congress in the McCain-Feingold law. Nevertheless, Federal Election Commission rulings after the 2004 election attempted to extend the reach of the law to 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 or coordinate their activity with campaigns, they may seek to persuade the voting public through independent expenditure groups.[6]
  • In July 2010, the U.S. District Court of Appeals for the D.C. Circuit ruling in Speechnow.org v. Federal Election Commission struck down fundraising limits on independent expenditure-only committees, (commonly known as Super PACs) which, like 527s, can raise unlimited amounts of money from individuals, unions, associations and corporations to influence elections. Speechnow.org v. Federal Election Commission, 599 F.3d 686, (U.S.C.A. D.C. 2010). 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] The Speechnow.org and Citizens United decisions made 527s much less valuable as a medium of political communication, and their use declined substantially in the elections of 2010 and 2012[citation needed].

In 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 both an independent expenditure PAC and a traditional PAC that could make contributions to candidates and was subject to fundraising restrictions. [8] Carey's victory in the court now allows organizations to operate both traditional and "Super" PACs.

Public opinion[edit]

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]

2004 election controversy[edit]

Although 527 organizations were in common use by the 1990s, in the wake of the Bipartisan Campaign Reform Act, which limited the ability of political parties to raise money, 527s rose to much greater prominence and visibility. Swift Boat was one such group, which ran controversial and highly effective ads critical of Massachusetts Democratic Party (United States) John Kerry presidential campaign, 2004.[11] A reported $9.45 million came from just 3 private individuals.[12][13][14] On the liberal side, contributor George Soros contributed $23.7 million to 527s, and Peter Lewis of Progressive Insurance contributed another $23.2 million to 527s in 2004. [15] Prominent 527s that supported Democrats included Americans Coming Together, MoveOn.org, and the Media Fund.

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:

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.[16]

Top 20 federally focused and state-focused 527 groups[edit]

2010 election cycle[edit]

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.[17][18]

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

2008 election cycle[edit]

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.[17][18]

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

2006 election cycle[edit]

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.[19][20]

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:[19] Source:[20]

2004 election cycle[edit]

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.[17][18]

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.[17][18]

*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[edit]

References[edit]

  1. ^ The Center for Public Integrity, 527 Frequently Asked Questions http://projects.publicintegrity.org/527/default.aspx?act=faq#5
  2. ^ "What are 527's? | Who Donates? | Where does the money go? Government Regulation | Ethics". Stanford University. Retrieved November 16, 2013. 
  3. ^ Luo, Michael (2008-06-12). "Ready to Attack Obama, if Some Money Arrives". New York Times. 
  4. ^ EMILY’s List v. FEC, 581 F.3d 1 (D.C. Cir. 2009).
  5. ^ Court Backs Outside Groups' Political Spending http://www.nytimes.com/2009/09/19/us/politics/19donate.html
  6. ^ "Citizens United v. Federal Election Commission". SCOTUSblog. Retrieved April 1, 2012. 
  7. ^ "Super PACs". OpenSecrets. Retrieved April 1, 2012. 
  8. ^ Marston, Chris (April 27, 2011). "Former FEC Chair Smith joins litigation team to create "Super-Duper" PACs". Republican National Lawyers Association. Retrieved April 1, 2012. 
  9. ^ Bloomberg national poll, conducted Oct 7-10 2010, http://media.bloomberg.com/bb/avfile/rUtERn9eLmGU
  10. ^ Midterm Election Challenges for Both Parties http://people-press.org/2010/02/12/midterm-election-challenges-for-both-parties/
  11. ^ Baram, Marcus (May 25, 2011). "Wyly Brothers Gave Millions To Over 200 Republican Candidates". Huffington Post. Retrieved April 1, 2012. 
  12. ^ "Swift Vets Top Contributors, 2004 Cycle". opensecrets. Retrieved 2007-04-01. 
  13. ^ 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. Retrieved 2012-02-12. 
  14. ^ "Bob Perry - The Man Behind Swift Boat Veterans for Truth". fact sheet. Texans for Public Justice (self-published). Retrieved 2007-04-01. 
  15. ^ "Top Individual Contributors to Federally Focused 527 Organizations, 2004 Election Cycle". OpenSecrets. Retrieved April 1, 2012. 
  16. ^ "FEC Collects $630,000 in Civil Penalties from Three 527 Organizations". Federal Election Commission. December 13, 2006. Retrieved April 1, 2012. 
  17. ^ a b c d Top 50 Federally Focused Organizations, opensecrets.org
  18. ^ a b c d State-Focused 527 Committees Only, opensecrets.org
  19. ^ a b Top 50 Federally Focused Organizations, opensecrets.org
  20. ^ a b State-Focused 527 Committees Only, opensecrets.org

External links[edit]