Campaign Reform: '527' Restrictions Could Hurt Dems
The fight over immigration reform seems sure to dominate Capitol Hill over the next few weeks, but the lower-profile effort by Republicans to curtail the influence of 527 political groups could have a more direct impact on the 2006 midterm elections.
Republicans in the House and Senate have introduced legislation that would force 527s (named for the section of IRS tax code that governs their activities) to comply with the same donation limits of federal political action committees, a move that would greatly reduce the ability of a single individual to donate millions of dollars to a group aimed at influencing the election.
The push to regulate 527s came in the wake of the 2004 election when affluent progressives like financier George Soros and insurance executive Peter Lewis dumped tens of millions into pro-Democratic groups like America Coming Together and the Media Fund in hopes of defeating President George W. Bush. While Republican 527s like Progress for America and Swift Boat Veterans for Truth did not raise and spend as much as their Democratic counterparts, they arguably had more influence on the outcome of the election.
Democrats find themselves in a sticky political spot: They have benefited from soft-money donations from 527s, but they also have been generally supportive of campaign finance reform as a party. In the House, Republicans have inserted the 527 provisions into a broader lobbying reform measure -- making it doubly difficult for Democrats to vote against the legislation given the current public attitude toward lobbyists.
Even as Democrats weigh their political options, several new progressive 527s have formed, most notably the Fresh Start for America Project and the Lantern Project.
Fresh Start for America, the existence of which was first reported by Roll Call's Paul Kane, is an arm of the Senate Majority Project -- an organization founded by several former Democratic Senatorial Campaign Committee operatives. The group filed organizational papers with the Internal Revenue Service on March 13. Its expressed purpose is to fund ads in states hosting key Senate races in 2006. It has not yet reported any fundraising activity.
The Lantern Project is the latest of so-called "boutique" 527s that focus their efforts on a single state. In the case of the Lantern Project that state is Pennsylvania, and its goal is the defeat of Sen. Rick Santorum (R) come November. Founded in January 2005 , the Lantern Project raised nearly $330,000 last year, thanks in part to a $100,000 contribution from the Service Employees International Union as well as smaller donations by entertainer Barbra Streisand ($2,500) and Slimfast founder S. Daniel Abraham ($10,000).
It remains to be seen whether 527s focused on influencing the vote in key Senate and House races can succeed financially. Groups founded by Democratic and Republican operatives following the passage of the Bipartisan Campaign Reform Act in 2002 eventually closed their doors due to a lack of funding. While liberal donors proved in 2004 they were more than willing to dip into their personal fortunes to defeat President Bush, they have yet to show a willingness to make large (i.e. seven figure) donations to help defeat Republicans in Congress.
As they push to regulate 527s, House Republicans have formed a rapid response team out of the office of Conference Chairwoman Deborah Pryce (Ohio) in a bid to up the pressure on Democrats. "These shadow Democrat campaign groups operate without accountability, calling people all over the country spreading blatantly false information," said Sean Spicer, a spokesman for the conference. "Our goal is provide our members with key facts in a timely manner so they can respond effectively."
Much rides on whether Republicans are able to move 527 reform legislation in the coming days and weeks. If they do, Democrats may struggle to stay financially competitive with their Republican counterparts on a race-by-race basis. At the end of February, the three Republican national committees had $76 million on hand to spend on races compared to $53 million for their Democratic counterparts.
March 28, 2006; 3:36 PM ET
Categories: PAC Watch
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