Favored by 527s, Democrats mum on reforms

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The Democratic majority in Congress has pursued a reform agenda that so far has overlooked the campaign-finance loophole allowing soft money to flood so-called 527 organizations, loosely regulated political groups, most of which support liberal candidates.

Top Democrats including Senate Majority Leader Harry Reid of Nevada and House Speaker Nancy Pelosi of California once denounced soft money's influence on American politics, but they have backed off since taking over Congress this year.

Since the 2002 Bipartisan Campaign Finance Reform Act prohibited national political parties from accepting or spending soft money unregulated dollars not given directly to candidates the 527 groups emerged as the chief vehicle for soft-money campaigning.

Democrats lead the pack in fundraising through 527s, named for the section of the Internal Revenue Service code that permits groups to collect contributions that are not tax deductible without disclosing donors or expenditures.

In the 2004 election cycle, Democratic 527s collected more than twice as much, $278 million, compared with $104 million for their Republican counterparts, according to IRS records compiled by the nonpartisan Center for Responsive Politics.

The fundraising total for Democrats is even higher when counting contributions to organizations that promote liberal causes, such as pro-choice, environmental and labor union groups.

The center's data showed that in the 2006 election cycle, eight of the top 10 donors to 527 gave to liberal groups, as did seven of the top 10 donors in the 2004 election cycle.

The rise of these groups has helped boost Democrats to fundraising parity with Republicans for the first time in modern campaigning. The influence can be seen in TV and radio ads that do not endorse a particular candidate but often attack a rival politician.

For example, the liberal 527 group Media Fund paid for TV ads in the 2004 cycle that blasted President Bush for sending American jobs to other countries and for spending billions of dollars on the Iraq war while neglecting schools and health care.

The conservative 527 group Swift Boat Veterans for Truth aired ads that same year attacking Democratic presidential nominee John Kerry's military record in the Vietnam War.