Legal Status of 527 Groups in 2008 Elections

[Adelante]

In discussing the role being played by 527 groups in the 2008 presidential caucuses and primaries, some published media reports have stated that these political groups can raise and spend unlimited contributions in the presidential race, as long as they do not explicitly urge people to "vote for" or "vote against" a presidential candidate and do not coordinate their efforts with a presidential candidate or campaign.

This statement is wrong.

In fact, the Federal Election Commission found that numerous 527 groups illegally spent unlimited contributions in the 2004 presidential election, without explicitly urging people to "vote for" or "vote against" a presidential candidate, and without coordinating their efforts with a presidential candidate or campaign.


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These contribution limits apply regardless of whether the group is coordinating with a candidate.

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"Despite the FEC findings of widespread illegal conduct by 527 groups in the 2004 presidential election, it appears that 527 groups are blatantly and arrogantly at it again in the current presidential race," Democracy 21 President Fred Wertheimer stated.

"These 527 groups are spending large sums of unlimited contributions on what they claim are 'issue ads' but what instead are unquestionably 'campaign ads' being run to influence the 2008 presidential election." Wertheimer said.

"Given the past FEC determinations that illegal expenditures were made by numerous 527 groups in the 2004 presidential election, no one should be making the assumption that the 527 groups currently spending millions of dollars in Iowa and New Hampshire are doing so legally," Wertheimer stated. "In reality, these 527 groups may be making illegal expenditures in 2008, just as 527 groups did in 2004."

http://www.democracy21.org/index.asp?Type=B_PR&SEC={91FCB139-CC82-4DDD-AE4E-3A81E6427C7F}&DE={F3CFEA71-36DA-4056-89EF-12168391CB5F}

[Adelante]

1. Campaign Finance Advocates Raise Alarms Over Union Group

Advocates of stricter campaign finance laws are raising alarms about the legal status of a labor-backed group that is blanketing Iowa with mail and advertisements supporting the Democratic primary campaign of former Senator John Edwards.

The group, Alliance for a New America, is supported by locals of the Service Employees International union that support Senator Edwards. One of his opponents, Senator Barack Obama, has derided Mr. Edwards for benefiting from the group’s advertisements even though he has often criticized such independent organizations— known as 527 groups, after a provision of the tax code— for circumventing the limits of campaign finance laws. Actively coordination of advertising expenditures by a campaign and an outside group would be a violation of campaign finance laws.

The Edwards campaign has said it has only limited knowledge of the union officials’ plans. The campaign has acknowledged talking to union officials about coordinating their endorsements and other permissible forms of support. But a spokesman for the campaign said the union cut off its communications with certain staff, who later turned out to be organizing the 527 advertising group.

Now two campaign-finance advocacy groups— Democracy 21 and the Campaign Legal Center—argue that the Alliance for a New America may be violating other campaign finance rules. An Oct. 8 e-mail message circulated between union officials that was leaked through a rival campaign and published online by The New York Time suggests that the union officials planned to create a group like the Alliance for a New America explicitly to advocate the Mr. Edwards election. (The group’s direct mail and television and radio commercials indeed strongly support Edwards, and its main staff worked for Mr. Edwards’s 2004 Democratic primary campaign.) Such advocacy of a candidate’s election could mean that the group falls under the restrictions governing so-called federal political committee rather than the looser rules applies to 527 groups; as a political committee, it could not accept contributions of union dues or other unlimited donations as it has. The Federal Election Commission fined several groups for violating the rules in similar ways in 2004.

“The SEIU memo raises serious questions about whether this 527 group is engaging in illegal activities,” said Fred Wertheimer, founder of Democracy 21, including “whether this 527 group has failed to properly register as a federal political committee and to comply with the contribution limits and prohibitions that apply to the funds such a political committee can receive.”

Paul Ryan, a lawyer for the Campaign Legal Center, said, “They may simply another in long line of 527 groups that simply ignore campaign finance law, and it may be doing so with a plan to pay a fine to the FEC.”

Officials of the group did not return calls or could not be reached.

http://thecaucus.blogs.nytimes.com/2007/12/27/3503/