Who's Afraid of the Big Bad 527?

Katie Zerwas

The reality is that while speech, assembly, and petition are guaranteed 'free' that does not mean they do not have a cost.

In condemning the now infamous television ad accusing Democratic candidate for president John Kerry of lying about his service in Vietnam, President George W. Bush does not mention the fact that the veterans depicted in the ad never served with Mr. Kerry and probably never even met him, or the fact that their claims on behalf of the organization Swift Boat Veterans For Truth are undeniably false and probably libelous. Instead, he brought obscure tax-code policy into quotidian parlance, stating, "I'm denouncing all the stuff being on TV of the 527s" (Feldman, Linda, "Political ads: Cash Still King," Christian Science Monitor, 25 August 2004). These 527s, or non-profit groups privileged by their Internal Revenue Service status to perform limited electioneering functions as part of their issue awareness activities, have suddenly entered the spotlight as a sort of soft-money Trojan horse, skirting under the radar of the Bipartisan Campaign Reform Act (also known as the McCain-Feingold Act) and hijacking the 2004 elections.

Bush signed the BCRA into law in 2002, and while it is possible that he never read it, it seems unlikely that after the much studied post-BCRA election cycle of 2002 during which so-called "Stealth PACs" raised $115 million (Public Citizen, "Cramming for the Midterm," November 2002) that he has only now come to the conclusion that soft money is still seeping into politics. The more likely cause of Republican consternation is the fact that Democratic 527s have out-raised their Republican counterparts 15-1 ("Bush Said To Be Opposed To 527 Groups Because of GOP's 'Inability to Compete,'" The Frontrunner, 25 August 2004).

The 527 debate, however, has done little to clarify what that phrase "campaign finance reform" really means. The stated objective of the McCain-Feingold Act was to ban soft money contributions to candidates and rein in campaign advertisements disguised as "issue ads." Prior to the passage of BCRA, individuals, corporations and unions were permitted to funnel unlimited amounts of money into campaigns to be earmarked for get out the vote and party building activities, basically any activity that does not directly support or oppose specific candidates with the words "vote for," "vote against," "elect," etc. With the rising impact of television advertising came the "issue ad," a television spot that clearly supported or opposed a candidate but failed to use the "magic words."

By the 2000 elections, the two major parties were raising and spending $500 million on these ads (Holman, Craig and Joan Claybrook, "Outside Groups In The New Campaign Finance Environment: The Meaning of BCRA and the McConnell Decision," Yale Law and Policy Review, Spring 2004), and it was believed that their impact on the elections was affording interest groups undue access and power to manipulate political leaders. Banning all soft money contributions to parties or candidates while allowing certain non-profit groups to remain exempt from these limits, it was believed, would take the corruption of money out of politics.

Critics of BCRA's refusal to regulate 527s cite the Swift Boat Veterans for Truth ad as evidence of continued soft money corruption. Many of the Democratic-leaning 527s, however, are waging "ground wars," also known as old-fashioned grassroots organizing, with their soft money contributions. In fact, many of the anti-Bush ads on television are not even sponsored by 527s, but rather political action committees (PACs) like MoveOn which are regulated by BCRA. In contrast, 527s like the one I work with, the Young Voter Project, are engaged in such atrocious behavior as asking their staff to talk to young people for the purpose of encouraging them to vote and providing them with information on the candidates and issues that might be of interest to them.

Critics who accuse these 527s of "astro-turfing" or using the funds of leftist millionaires to purchase the human resources, rhetoric, literature, and other superficial trappings that mimic grassroots campaigning tend to focus on the source of the money rather than how it's used. Grassroots activists are acutely aware that even popular campaigns cost money, and that money doesn't grow on trees. In light of this fact, 527s like the Young Voter Project and America Coming Together have appealed for donations from certain wealthy individuals, but these funds when pooled with the donations of hundreds of other donors and channeled through the voices of hundreds of volunteers has a decidedly different affect than a direct donation from a wealthy individual to a candidate or even a party.

Even if direct involvement with a 527 could buy access to a candidate, which it probably couldn't as collaboration between 527s and political parties is strictly prohibited and scrutinized, what would a non-profit take for a political favor? PACs, which are directly linked to corporations, might well be rewarded with some pork-barrel contracts, or private goods. A 527 like the Young Voter Project might ask for programs to enfranchise more citizens, in other words, for public goods.

Buying access to politicians through soft money is not, of course, the only concern surrounding soft money, but critics of electioneering non-profits also site their agenda-setting abilities. As I listen to politicos clamber over the need to wrest control of the message from these "stealth PACs," however, my experience with the grassroots populism of the Young Voter Project makes me question whose interests these critics have in mind. If these kinds of broad-based movements are unable to raise funds equal to the agenda-setting efforts of corporate PACs and the national political parties through yet another wave of soft-money curtailment policies, it will be very difficult for the voice of the people to be heard above the clamor of hard money interests with even more direct access to politicians.

In the end, the questions posed by the sudden growth of 527s may be irrelevant as their activities in reality account for only a tiny fraction of the sum total of electioneering activities. Thus far the two major political parties have raised over $430 million, adding more than two million new donors, a whopping figured compared to the one million spent by the Swift Boat crew (Corrado, Anthony and Thomas Mann, "Flap Over 527s Aside, McCain-Feingold Is Working As Planned," Roll Call, 20 May 2004). Additionally, it is unlikely that any further regulation of non-profit activities and spending would be deemed constitutional by the Supreme Court, as to do so would require a drastic curtailment of their free speech and petitioning rights.

For those who believe that money ought to be divorced from politics all together, might I suggest a careful examination of our founding document, the Constitution at Its First Ten Amendments, The Bill of Rights. The reality is that while speech, assembly, and petition are guaranteed "free" that does not mean they do not have a cost. The marketplace of ideas is now holding court on television, where ads are expensive and the press is more generous to some points of view than others. The public squares have been bought up by big box retailers, so assemblies must now occur through high tech web-powered "meetups" and in rented halls, with paid staffers and catered buffets.

Money has always played a role in politics. The problem that campaign finance reform ultimately seeks to remedy is not too much money, but too much money that buys "undue access" for the wealthy and elite. Like most things dealing with money, there is a top-down "supply-side" approach, and a bottom-up "demand-side." The latter approach focuses on allowing for greater breadth of ideas and viewpoints into the political debate, while the former approach attempts to stymie the flow of harmful or corrupt political speech. To date, campaign finance reform has attempted to tie the hands of the wealthy by limiting their campaign contributions and what can be said in their issue ads. Fundamentally, this supply-side approach violates their First Amendment Rights, since the right to free speech is not revoked for saying something disingenuous, misleading, or stupid.

While a certain amount of regulation and disclosure of the flow of money in politics is important, the rhetoric of divorcing money from politics by limiting political speech is dangerously undemocratic and it has just as much potential to block popular influence as it does corporate influence. What has been suggested innumerable times, yet never implemented, is to empower those without access to enormous amounts of capital to voice their political views. What about free television and radio advertising? Open debates? Publicly funded community forums and independent newsletters? These are just a handful of ways to make the marketplace of ideas more inclusive and politicians more accountable to the people, instead of wealthy individuals or interest groups.

According to Thomas Mann of the Brookings Institution, BCRA is already accomplishing its objective to put distance between politicians and their donors as he asserts that, "Members of Congress and national party officials are no longer soliciting unlimited contributions for the party committees, nor are they involved in the independent fundraising efforts of leading 527 groups" (Roll Call, 20 May 2004). Perhaps the problem, then, is not what 527s can say, but what they cannot say. The ban on express advocacy often forces non-profits to couch their arguments in negative terms, using attack ads that have been shown to turn off voters and embitter public discourse, contributing heavily to the perception that Americans are growing ever more politically polarized. While it is clear that the objective of campaign finance reform is to prevent corruption and encourage voter confidence in the integrity of their given candidates, one might suggest that the real heart of the matter is to encourage public participation in our great democratic experiment.

If campaign finance reform succeeds at divorcing money from politics, but fails to rescue our flagging democracy, then its success is more a measure of our ability to enforce the rule of law than to foster responsive and responsible governmental institutions. Organizations like the Young Voter Project that encourage democratic participation through grassroots activism may prove that 527s are not at the heart of the problem, but at the root of the solution.





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