Chapter 11
Named after a section of the United States tax code, “527s” are a relatively new invention used by organized interests to try to influence the outcome of elections in America. 527 groups are politically oriented organizations that enjoy tax exempt status under current law, and thus are subject to no limits on the amount of soft money they can theoretically raise and spend. These groups then use the money they raise to develop and air “issue” advertisements. Although they cannot produce ads that directly tell voters which candidate or party to vote for in a particular election, 527 groups generally target positions on particular issues and craft advertisements that attempt to convince voters how they should think about those issues. Thus many 527 ads have amounted to the equivalent of negative attacks on the personality or character of particular candidates. In short, 527s have found a way to make an end run around the campaign finance system.
Spending by the 527s is significant. In 2008, 527 groups spent nearly $500 million on national, state, and local election contests. In the 2004 presidential election year, the 527s spent over $600 million. In the 2006 midterm election year, they spent $430 million.
In 2004, one of the 527s (The “Swift Boat Veterans for Truth”) was responsible for producing and airing the so-called “swift boat” ads that attacked John Kerry’s character by questioning his military record. In 2008, 527s were behind many of the negative attacks on Barack Obama that decried his association with controversial figures such as William Ayers and Rev. Jeremiah Wright.
Go to www.opensecrets.org/527s for details concerning which individuals and organizations provide the bulk of financial support to the 527s. Which industries have been most active in forming these groups? What kinds of ads have they produced? Who do you think benefits more—Democratic or Republican candidates—from 527 activities? 527 groups frequently cite the First Amendment to defend their activities. Do these groups legitimately contribute to the “marketplace of ideas,” or is this an example of “free speech run amuck”?