Tuesday, May 27, 2008

Today is "527" Awareness Day

In honor of the date, here is why it is important to know what a 527 group is. According to OpenSecrets.org a 527 is:

A tax-exempt group organized under section 527 of the Internal Revenue Code to raise money for political activities including voter mobilization efforts, issue advocacy and the like. Currently, the FEC only requires a 527 group to file regular disclosure reports if it is a political party or political action committee (PAC) that engages in either activities expressly advocating the election or defeat of a federal candidate, or in electioneering communications. Otherwise, it must file either with the government of the state in which it is located or the Internal Revenue Service. Many 527s run by special interest groups raise unlimited "soft money," which they use for voter mobilization and certain types of issue advocacy, but not for efforts that expressly advocate the election or defeat of a federal candidate or amount to electioneering communications.

The largest 527 is the Service Employees International Union, which dwarfs other 527s. 527s range in size from massive to very small and targeted towards certain local issues, such as "Better Libraries for Palo Alto." Because 527 organizations do not spend their money directly on a candidate and cannot advocate the election or defeat of any candidate for federal elective office they are outside of the regulation by the Federal Election Commission.

The following chart shows how important 527s are in any election cycle:

The Federal Election Commission revealed numerous instances where 527s were used illegally in the 2004 Presidential Election. As we enter the 2008 Presidential Election cycle, the FEC currently has 5 vacant seats and the Bush Administration has been scrambling to find anyone who is can be confirmed by the Senate, recently being forced to withdraw Hans von Spakovsky from consideration.

It is very likely a deliberate move to keep a regulatory body from doing its job during a contentious election cycle. Without the FEC being fully staffed in order to do its job, there is a strong possibility that multiple 527s could break the law this year and get away with it.

Citizens for Responsibility and Ethics in Washington (CREW) have been working this year to highlight what the implications of having unregulated 527s will be in this election election cycle.

Having a dysfunctional FEC is directly to the benefit of Senator John McCain's campaign:

A federal district court judge Wednesday threw out, for now, a Democratic National Committee lawsuit to force the FEC to investigate last year's withdrawal of a request by Sen. John McCain, R-Ariz., for federal matching funds to support his presidential campaign.

The FEC has lacked a quorum to rule on whether McCain gave up his right to withdraw from the public campaign finance program by accepting a loan tied to receipt of matching funds. The DNC lawsuit sought to open the door for the party committee to sue the McCain campaign directly to force it to stop spending or face hefty fines.

Democrats had hoped the court would determine that the FEC, which has just two commissioners due to a political impasse in the Senate, cannot act on McCain's request.

But U.S. District Judge John Bates dismissed the suit because the DNC did not show cause to ignore a law giving the FEC 120 days to act before seeking action in court.

The DNC can file again in late June, which a spokeswoman said the party will do.

CREW has formed "Fix the FEC" and is attempting to highlight what is wrong with the FEC:

...Citizens for Responsibility and Ethics in Washington (CREW) launched a new website, FixtheFEC.org, designed to change that. FixtheFEC.org was created to prompt Sen. Mitch McConnell (R-KY) to allow for a vote on federal election commissioners that can get the FEC back to policing federal elections business. Currently, the FEC is unable to perform its function, to administer and enforce campaign finance laws.

Enjoy 527 Awareness Day, a completely fictitious day made up just this morning.

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