Wednesday, May 26, 2004

An article of faith this election cycle is that President Bush’s high-caliber fund-raising operation will outgun Sen. John Kerry’s in the shootout at the 2004 presidential money corral. Democrats’ advantage in political currency always lies in their ground game, while Republicans supposedly have deeper pockets — it’s a well-worn truism in electoral folklore. Yet anecdotal evidence suggests the conventional wisdom may be wrong and Mr. Kerry’s forces are orchestrating an ambush.

For starters, according to some estimates, the Kerry campaign and its surrogates outspent Mr. Bush by about $5 million on television in March and may keep the edge in the future. Reports filed at the Federal Election Commission last week also reveal that Mr. Kerry’s financial situation is better than many expected at this point.

Yet who wins this cycle’s campaign-finance sweepstakes may have less to do with Mr. Bush, Mr. Kerry or political party fund-raising prowess and more to do with the performance of a handful of groups like the Media Fund, America Coming Together and These organizations are known as “527s” (because of the section of the tax code under which they are organized); they’re technically unaffiliated with the Democrats, but share a common mission: the electoral destruction of George W. Bush. Combining the resources of all the pro-Kerry organizations could result in an unprecedented Democratic money advantage in this election.

It’s no secret that many of these 527s operate as unregulated, highly secretive arms of the Democratic Party. Paul Farhi, a reporter for The Washington Post, ended a story last week on campaign finance with a revealing conclusion: “These ‘527’ organizations were formed in large part because of fears that the Democratic candidate would be vastly outspent by Bush.”

The 527 organizations do not register as political committees with the Federal Election Commission and provide only minimal disclosure to the Internal Revenue Service. Some, like the Media Fund, produce anti-Bush television ads, while America Coming Together organizes get-out-the-vote activities for Mr. Kerry.

Last week on Capitol Hill, the House Administration Committee held a hearing on the FEC’s recent decision not to pursue a rulemaking clarifying the role of 527s. “We wanted to make it clear these organizations will not be regulated this cycle and bring some finality to all the speculation about what might happen,” a source from the committee told me.

Both Republicans and Democrats can form 527 organizations, but many political observers believe Republicans got off to a slow start and continue to lag behind, creating a dangerous money and organizational asymmetry for Republicans. “Democrats took the most liberal interpretation of the law,” one Republican aide who follows these issues closely told me. Acting quickly, Democrats aggressively pushed the legal limits at every step and took the attitude they would beg for forgiveness if caught, as opposed to asking anyone’s permission.

Republicans pursued a more cautious approach. “Our people were given conflicting advice and told to be careful. And as a result, we’re now playing catch up,” the aide told me.

In a Jan. 30, 2003, column, titled “Cowboys coming,” I wrote that if the Supreme Court upheld the BCRA, which it did, it would hobble “national political parties, shifting power to single?issue interest groups.” My prediction materialized, but from the Republican perspective the developments have a sinister and foreboding twist: Most of the groups are “single issue” alright — single-minded about the defeat of Republicans.

The current money imbalance is staggering. The Bush campaign estimates pro-Kerry 527s have already spent around $45 million to defeat the president, compared to about $500,000 by Republican-aligned organizations. Others say the current ratio is about 175-1 in favor of Mr. Kerry.

The full implications of the Democratic money advantage are unknown. Yet, as political scientist Lyn Ragsdale notes in “Vital Statistics on the Presidency,” Republicans since 1860 consistently held a money advantage, and since 1964 they “began spending more than twice the amount spent by the Democrats.” Not anymore.

Now that it’s clear 2004 politically will imitate the Wild West, Republicans and conservatives need to saddle up their ponies and load some six-shooters of their own.

While it’s unfortunate the BCRA has handicapped the two national political parties and opened up the door for these shadowy cowboy combatants, Republicans need to aggressively address the current financial-arms-race asymmetry, or face a political Little Big Horn in November.

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