Democrats master art of 527s but GOP rallies

Liberal-leaning groups have dominated the use of an emerging political tool known as a 527, pouring tens of millions of unregulated dollars into efforts to defeat President Bush, but Republicans have ramped up efforts to close the gap before the November election.

“We felt it was imperative that we engage in the debate and help level the playing field to counter what the liberal 527s have done over the past year, beating up President Bush,” said Brian McCabe, president of Progress for America Voter Fund, a 527 that had raised only about $3 million until about six weeks ago.

The group, one of many 527s that have flourished since Congress barred political parties from using unlimited contributions, or “soft money,” from unions, corporations and individuals, now has $35 million in pledges and deposits, and is to start its second anti-Kerry ad buy in Iowa and Wisconsin today.

Mr. McCabe said Republican donors have been “coalescing” around his group in the past few weeks.

Anti-Bush 527s have been a political force this election cycle, with nine of the top ten fund-raising 527s being Democratic or anti-Bush groups, according to the Center for Responsive Politics. Among the top 50 fund-raising 527s, which CRP determined based on Internal Revenue Service records as of Monday, just a handful are working against Democratic presidential nominee Sen. John Kerry.

CRP says three groups — the Media Fund, America Coming Together (ACT) and MoveOn.org — have raised a combined $64 million to spend on ads and voter registration and mobilization efforts.

“Democrats as a fact dominate the 527s right now. There’s no question about that,” said Steven Weiss, communications director for CRP. “And Republicans, who initially opposed 527s, are now getting into the game and trying to raise as much money as possible.”

Although 527s have been around for years, they were not exploited until the new campaign finance law in 2002 banned political parties from using soft money. In light of the change, 527s essentially became the outlet for wealthy donors, corporations and labor unions to use their money to influence elections.

“Now the attention has shifted to these outside groups who could have done the same thing before, but weren’t the focus because political parties dominated the process,” said Bob Biersack, a spokesman for the Federal Election Commission.

Republicans had urged the FEC earlier this year to start regulating more of these 527s.

Among the big Democratic donors to 527s, Peter B. Lewis, chairman of the Progressive Corp., individually has given $14.2 million and financier George Soros individually has given $12.6 million to groups such as MoveOn.org and ACT, CRP says. The two men top the chart of individual contributors to 527s this year.

Democratic 527 groups such as Media Fund have been running an yearlong barrage of ads criticizing Mr. Bush. MoveOn.org also has run such ads, but the group recently has been avoiding the 527 criticism by paying for commercials out of its political action committee, not its 527 branch.

Cleta Mitchell, a Republican election law attorney and opponent of the new campaign finance law, said that even as that law was being crafted, Democrats knew 527s would be the way they could continue using unlimited soft money to influence elections.

Republicans “didn’t realize what the Democrats would be doing” and are playing catch-up, she said.

The tax-exempt 527 groups, which take their name from the section of the tax code that governs them, are not regulated by the FEC unless they have a political action committee, creating the “soft” money loophole. FEC regulation limits campaigns to accepting $2,000 per candidate from an individual annually and PACs to accepting a maximum of $5,000 from an individual annually.

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