Soft-money political groups making changes

Michael E. Ross Reporter • Profile • E-mail

As the Senate prepares to consider a bill that would curtail unlimited
contributions to political advocacy groups, some of those groups aren't waiting to decide their next move.

The grassroots organizations, whose direct-appeal fundraising style made an impact in the 2004 election, are adopting new strategies in expectation of the Senate following the House in voting to curb their contributions, and in preparation for the November elections.

Some of the organizations have been loosely allied as so-called 527 groups, named for the section of the U.S. Internal Revenue Code that governs them.

The 527s first made a splash during the 2004 election, when they raised millions of dollars in small contributions from ordinary citizens around the country — so-called “soft money” donations. The groups can raise unlimited funds for political activities, including voter registration and to champion specific political issues, but they can't give money directly to or coordinate strategy with candidates.

But Republicans accused many 527s of breaking election regulations by specifically supporting the defeat of President Bush, and by coordinating their activities with Democratic candidates.

Likely boost to Republicans
Now many Republicans are supporting the 527 Reform Act, sponsored by Connecticut Rep. Chris Shays and Massachusetts Rep. Marty Meehan. The legislation would replace no-limit fundraising with a cap of $5,000 for individual donors. These soft-money donations are mainly used by Democrats, so the change would likely affect them more than it would Republicans.

Another provision of the Senate measure would remove caps on political parties' spending when that spending is coordinated with candidates. This is expected to be a boon to Republicans, because the GOP has consistently raised more for its candidates than the Democratic Party has for its contenders.

The House approved the 527 reform bill on April 5 on a party-line vote. So far, the Senate hasn't indicated how it will vote on the measure.

But at least two organizations, Music for America and MoveOn, are adjusting their strategies now, one by expanding its operation as a 501(c) group, the other by abandoning its status as a 527 group to return to being a political action committee.

MoveOn's strategy
MoveOn was one of the 527 groups pilloried by Republicans in the run-up to the 2004 election.

Eli Pariser, the group's executive director, said MoveOn's status as a 527 was only part of its function. Since the group's creation in 1998, he said, MoveOn has evolved into a political hybrid: part 527, part 501(c) and part political action committee.

Acting for or against candidates is barred to 501(c)(3) organizations, whose primary purpose is religious, educational or charitable rather than political and which may raise funds as charities; 501(c)(3) and (4) groups are permitted to try to influence legislative agendas or policies, but may not seek to directly impact a party’s candidates in an election — unlike 527s, whose focus is more overtly political.

PACs can accept up to $5,000 per year from individuals, but have no limits on ad spending to support a candidate, or the content of those ads.

For MoveOn, the combination meant more than $60 million in donations last year, most no more than $50 each, from MoveOn’s 3.2 million members nationwide.

Get out the vote, get out the message
Pariser makes no predictions about how the Senate will decide on the bill. But he said the strategy for the group before the November election will focus on running ads in key states to educate voters on the positions of their representatives; getting MoveOn members to organize events nationally “to get out the message in the local press, under the radar of the national media”; and building a phone-outreach program to contact likely Democratic voters in battleground states.

Music for America, a left-leaning San Francisco nonprofit that focuses on registration and turnout of younger voters, actually began as a political action committee before the 2004 election, but later switched to 527 status. Now, MfA has returned to its former life as a 501(c)(4).

“We sort of saw this coming more than a year and a half ago,” said executive director Molly Moon Neitzel. “An organization like Music for America couldn't exist as a 527 with the kinds of rumblings we'd heard were coming. I didn’t want to deal with the legal b.s. we'd have had to deal with, so we switched.”

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