A 527 group, named after a section of the United States tax code, is a tax-exempt organization that is created primarily to influence the nomination, election, appointment or defeat of candidates for public office. Although political action committees are also created under Section 527 of the Internal Revenue Code, the term is used to refer to political organizations which are not regulated by the Federal Election Commission and not subject to the same contribution limits as PACs.
A 527 group is permitted to accept contributions in any amount from any source. They are exempt from federal income tax on contributions received but they are required to report their funding and expenditures to the Internal Revenue Service. These unregulated contributions are frequently referred to as soft money. Because 527 organizations are not regulated by the Federal Elections Commission, they may not make expenditures to directly advocate the election or defeat of any candidate for federal elective office. They also may not coordinate their activities with any candidate's campaign. 527s are permitted to undertake non-prohibited political activities such as voter mobilization efforts and issue advocacy.
Many 527s are run by special interest groups and used to raise unlimited amounts of money to spend on issue advocacy and voter mobilization. The line between issue advocacy and candidate advocacy is the source of heated debate and litigation.
Examples of 527s include Swift Boat Veterans for Truth, Texans for Truth, The Media Fund, America Coming Together, the Moveon.org Voter Fund, the Progress for America Voter Fund, and the November Fund.
During April of 2004, the Federal Elections Commission (FEC) held hearings to determine whether or not 527s should be regulated under campaign finance rules; see campaign finance reform for additional details. In May, they decided to delay any ruling for an additional 90 days, almost certainly pushing it to past the 2004 presidential election.
See also: Political action committee
2004 election controversy
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 are involved with both organizations have 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 represents the Democratic National Committee and a 527 group airing anti-Bush ads, the MoveOn.org Voter Fund.
Top 20 527 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.
|Rank||Name||2004 Fundraising||2004 Expenditures|
|1||Joint Victory Campaign||$41,685,706||$35,780,404|
|2||The Media Fund||$28,127,488||$27,208,905|
|3||America Coming Together||$26,905,450||$24,196,532|
|4||Service Employees International Union||$16,652,296||$8,808,017|
|5||American Federation of State, County and Municipal Employees||$13,658,207||$13,274,331|
|7||New Democrat Network||$7,172,693||$6,970,070|
|8||Club for Growth||$5,288,847||$6,755,054|
|11||Voices For Working Families||$3,668,280||$2,396,272|
|12||College Republican National Committee||$3,647,093||$4,789,820|
|13||Democratic Legislative Campaign Committee||$3,544,667||$3,205,115|
|15||Partnership for America's Families||$3,071,211||$2,855,110|
|16||League of Conservation Voters||$2,804,000||$541,882|
|17||Progress For America||$2,266,810||$689,560|
|18||Communications Workers of America||$2,263,913||$1,926,066|
|As of August 23, 2004. Source: |