527 committees

The "527" committees, also known as the "527" political groups or just the "527" groups, are products of a loophole carved in Section 527 of the Internal Revenue Code which covers political organizations. Under federal election law, members of Congress may raise only limited amounts of 'hard money' for their own campaign committees or 'leadership PACs' which aid other candidates. They may accept no contributions of more than $1,000 per election from an individual and $5,000 per election from a political action committee (PAC). But if they set up a politician 527, members of Congress can raise unlimited soft money from individuals, corporations and unions."

Shortcomings of the 527 committee legal statutes

"Moreover, despite the July 2000 passage of a public disclosure law for all 527 groups, serious shortcomings exist in both the law and the disclosure system established by the Internal Revenue Service. As a result, it is difficult, sometimes impossible, to get the full story about which politicians have 527s, who contributes to 527s, and what the 527s spend their money on. Even if the politician 527s are banned by the pending McCain-Feingold (September 25, 1997)/Shays-Meehan legislation, this defective disclosure apparatus will hinder the tracking of new soft money flows to partisan nonpolitician 527s attempting to influence federal elections."

Relevant Internal Revenue Code

"527 groups fall under a section of the Internal Revenue Code governing organizations that primarily attempt to influence election campaigns. Until recently, the section applied to political committees (such as candidate or party committees) that contributed to, or otherwise directly supported or opposed candidates. In the case of federal elections, such committees are subject to federal election law limits on amounts and sources of contributions. However the newer so-called '527s' do not (1) use 'magic' words that expressly advocate someone's election or defeat, and/or (2) directly subsidize federal campaigns themselves. Therefore, lawyers have successfully argued to the Federal Election Commission, they are exempt from the restrictions of federal campaign law and allowed to collect soft money which is unlimited donations from corporations, unions and wealthy individuals.

"There are basically two kinds of 527s active in federal politics: those that exist to promote certain politicians (which Public Citizen calls 'politician 527s') and those that exist to promote certain ideas, interests and partisan orientations in election campaigns. (Public Citizen calls these 'non-politician 527s')...

"Politician 527s generally serve as soft money arms of 'leadership PACs,' which incumbents use to aid other candidates and otherwise further their own careers. Like the campaign committees of members of Congress, leadership PACs can receive only 'hard money' contributions, which are limited in amounts and may not come directly from corporations or unions. Politician 527s use their soft money mainly to sponsor events that promote their own careers, help create a 'farm team' of successful state and local candidates, and spur partisan 'get-out-the-vote (GOTV)' efforts.

"Campaign committees and leadership PACs of members of Congress report to the Federal Election Commission (FEC), while 527 groups report to the Internal Revenue Service (IRS). Basic information about their contributions and expenditures are then posted on an IRS website."

Republican-inclined 527 committees

The following are some of the 527 committees which are considered Republican-inclined:

• 2007 Conservative Victory Committee
• American Resolve
• Americans for Honesty on Issues
• Americans United to Preserve Marriage
• Black America's PAC
• Black Republican Freedom Fund
• Born Alive Truth
• Club for Growth
• Economic Freedom Fund
• Free the Eagle
• Freedom's Defense Fund
• MoveOnForAmerica.org
• National Rifle Association
• pHforAmerica.com
• Progress for America / Progress for America Voter Fund
• Republican Governors Association
• Stop Her Now
• Swift Boat Veterans for Truth
• The Leadership Forum
• The November Fund
• The Trailhead Group, LLC
• Veterans for Truth
• Veterans for Victory
• Vets for Freedom

Democrat-inclined 527 committees

The following are some of the 527 committees which are considered Democrat-inclined:

• America Coming Together
• America Votes
• Fighting Dem Vets for Congress
• Fund for America
• Joint Victory Campaign 2004
• Media Fund
• One America Committee
• Secretary of State Project
• Scientists and Engineers for Change
• Texans for Truth
• Thunder Road Group
• Win Back Respect

Independent-inclined 527 committees

• George the Menace
• Disabled Alumni of America - a 527 dedicated to advocating for better laws and public attitudes for disabled alumni of American universities.

Articles and resources

Related SourceWatch articles

• 501c3
• 501c4
• lobbying firms
• McCain-Feingold
• Progressive Donor Network
• soft money
• U.S. presidential election, 2004: Active Advocacy Groups
• U.S. presidential election, 2004: Campaign Ads

External resources

• "527 Group" in the dKosopedia.
• "Congressional Leaders' Soft Money Accounts Show Need for Campaign Finance Reform Bills." First of Public Citizen Reports on "527" Groups Reveals Corporate Influence on Broadband, Tobacco and Money-Laundering Policies, February 2002: "...analyzes the contributions and expenditures of the 25 leading federal politician 527s known to exist, their impact on public policy and the adequacy of the disclosure system." (pdf version).
• Report: "The New Stealth PACs: Tracking 501(c) Non-Profit Groups Active in Elections," Public Citizen; last updated September 20, 2004.
• "Recent Developments in Campaign Finance Regulation. Section 527 Organizations" (2000-2005), Brookings Institution.
• "527 Committee Activity. Top 50 Federally Focused Organizations, Open Secrets: profiles, receipts and expenditures. Figures represent most recent information obtained from the Internal Revenue Service (last accessed April 11, 2006).
• "527 Political Organizations: Legislation in the 109 Congress" prepared by Joseph E. Cantor, Specialist in American National Government, Government and Finance Division, and Erika Lunder, Legislative Attorney, American Law Division, Congressional Research Service, Updated March 31, 2006.

External articles

• "Taking Issue With Issue Ads," CBS News, March 31, 2000.
• Proceedings, The Congressional Record, June 8, 2000. re "McCain-Feingold-Lieberman amendment."
• Chris Suellentrop, "527s on the Web," Slate, June 28, 2000.
• "Closing a Loophole," PBS Online NewsHour, June 30, 2000.
• "Recent Developments in Campaign Finance Regulation. Section 527 Organizations": Introduction, Brookings Institution, Updated February 28, 2001.
• Letter to David W. Jones re Comments on Announcement 2002-87, Internal Revenue Service, January 28, 2003: Re: Proposed IRS Form 990 Changes (Announcement 2002-87), section on IRC 527 Political Organizations.
• "Silent Partners", Center for Public Integrity, September 2003.
• Eliza Newlin Carney, Peter H. Stone, and James A. Barnes, "New Rules Of The Game," National Journal, December 19, 2003.
• Luke Francl, "No one understands FEC 527 opinion (including FEC)," BushOut.tv, February 26, 2004.
• "The Shadow Campaign," MotherJones.com, March 11, 2004.
• Alexander Bolton, "527s scot free in 2004. General counsel recommends regs delay of 3 months," The Hill, May 12, 2004.
• Alexander Bolton, "GOP leaders reverse field, build a new 527 network," The Hill, May 19, 2004: "Ironically, one of the biggest obstacles party leaders face is their own effort for much of this election cycle to declare illegal the fundraising activity of 527s, tax-exempt groups named after the section of the tax code under which they are organized. ... GOP leaders accelerated their reversal immediately after the FEC voted 4-2 to reject a bipartisan plan restricting 527s by issuing what some Republicans viewed as a thinly veiled fundraising pitch for a slew of conservative soft-money groups. ... In a joint statement, Bush-Cheney campaign chairman Marc F. Racicot and RNC chairman Ed Gillespie declared that the FEC had given 'the 'green light' to all non-federal '527's' to forge full steam ahead in their efforts to affect the outcome of this year's Federal elections and, in particular, the presidential race.'"
• Peter H. Stone, "Republican 527s: Full-Steam Ahead" (cache file), National Journal (PFA), May 24, 2004.
• Thomas B. Edsall, "GOP Creating Own '527' Groups. Unregulated Funds Can Be Raised," Washington Post, May 25, 2004.
• "Bush urges Kerry to condemn attack ads. President denounces ads in general," CNN, August 24, 2004.
• Alexander Bolton, "GOP 527s are gaining force in the wakeof Swift boat vets: Conservative groups still lag behind their Dem counterparts, The Hill, August 30, 2004.
• Rick Pearson, "Bush campaign sues to shut down political groups," Chicago Tribune (Greenwich Time), September 2, 2004.
• Glen Justice and Jim Rutenberg, "Advocacy Groups Step Up Costly Battle of Political Ads," The New York Times, September 25, 2004, A10.
• Glen Justice, "New Pet Cause for the Very Rich: Swaying the Election," The New York Times, September 25, 2004, A10.
• Kenneth Chang, "Scientists Begin a Campaign to Oppose President's Policies," New York Times, September 28, 2004.
• Jeane Cummings, "New Voices Join Political Fray On War, Stem Cells, Gay Unions," Wall Street Journal, September 29, 2004. Subscription required.
• Geoff Earle, "Multimillionaires funding expensive pro-Bush 527 ads," The Hill, October 27, 2004.
• Richard Briffault, "The 527 Problem ... and the Buckley Problem," Columbia Law School, 2005.
• "527 Reform Act of 2005 is Introduced - Bill Summary," The Reform Institute, February 2, 2005.
• Steve Weissman and Ruth Hassan, "BCRA and the 527 Groups," Campaign Finance Institute, February 9, 2005; revised March 8, 2005.
• "Going Out on Top," Capital Eye / Center for Responsive Politics, August 9, 2005.
• "Curtailing Big Checks," Editorial, Washington Post, March 31, 2005.
• Stephen Dinan. "FEC sues GOP 527 group for violating finance laws," Washington Times, September 20, 2005.
• Jeanne Cummings, "An About-Face on '527' Groups: Conservative Republicans Now Lead Effort To Defeat House Bill Limiting Donations", Wall Street Journal, July 3, 2006; Page A4.
• Dan Morain, "Campaigns raise stakes on nonprofits: Untraditional donation channels are expected to gain ground in 2008. They assure anonymity and do not impose caps," Los Angeles Times, November 13, 2007.
• Will Evans, "Anti-Abortion Group Targets Obama," NPR's election 2008 blog "Secret Money Project," September 16, 2008.