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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.

By Chris Cillizza  |  March 28, 2006; 3:36 PM ET
Categories:  PAC Watch  
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I have to say I don't see how this will really change things. All that will happen is that people like Soros and the "swift-boat" backers will split the 527s into 50 groups, one for each state. Then they can give the max of 20,000 to each and the result is the same. There is no rules against PACs coordinating together.

Also I find it interesting that the "liberal" senator from Wisconsin (Feingold) introduced very similar legislation a while back, and now the Republicans are jumping on the bandwagon. Seems that Russ is ahead of the game again, this is starting to become a pattern.

Posted by: Andy R | March 29, 2006 8:30 AM | Report abuse

I probably overstated my case by calling the first post "meaningless garbage," as I am concerned with un-checked surveillance and think the news is worth mentioning...ON A TOPIC IT RELATES TO.

When people put in their hundred-paragraph diatribes (such as the 9/11 conspiracy posts) on topics that it doesn't even relate to, the effect is like getting unwanted spam mail and is a total turnoff to the point the poster is trying to make.

More importantly, it prevents other on-topic posts from getting read.

Posted by: scootmandubious | March 28, 2006 4:58 PM | Report abuse

Can we have some sort of moderator on these boards to, at the very least, keep comments on topic. Otherwise, the response areas are rendered rather useless. Who is gonna wade through scores of meaningless garbage such as the first poster deposited.

As for the topic itself, I find it a bit shocking that the entire focus of the alleged offending contirbutions are those that help Democrats.

What astounding hypocrisy.

After 'swift-boating' somebody became synonomous with the word slander, one would think that the GOP abounds in dirty tactics and will only try to manipulate rules in a way that theirs is the only benefit.

Read "Fooled Again" by Mark Crispin Miller and nothing that the GOP ever does again, in their arsenal of dirty election tricks, will surprise you.

Posted by: scootmandubious | March 28, 2006 4:54 PM | Report abuse

I have to ask - what does that first post have to do with the topic of 527's?

Posted by: RMill | March 28, 2006 4:39 PM | Report abuse

I'm actually all for it but it surely is the pot calling the kettle black for the Swiftboat crowd to call for the reform of shadow groups diseminating misinformation.

There needs to be a simple, common sense rule followed in my opinion. Free speech should be allowed unfettered for issues but if you show a politicians face or mention a name, its political speech- plain and simple - and should be restricted by spending limits and accountable reporting requirements. Why is this so difficult?

Posted by: RMill | March 28, 2006 4:36 PM | Report abuse

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