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$78 Million in Soft Money Flows to Top 527 Political Groups As They Gear Up For Congressional Elections

Aug. 13, 2002

$78 Million in Soft Money Flows to Top 527 Political Groups As They Gear Up For Congressional Elections

WASHINGTON, D.C. ? Shadowy “527” political organizations gearing up to influence the November elections collected nearly $78 million in soft money contributions during the 2002 election cycle, according to a new report by Public Citizen.

Public Citizen compiled the study using second-quarter reports filed with the IRS on July 15. While only a handful of reports are available on the online IRS disclosure site, Public Citizen collected scores of reports directly from 527 groups. The reports reveal that the 25 largest groups active in federal elections made $13.5 million in contributions and spent $10 million from April 1 to June 30, 2002. Final figures for the election cycle and reporting period are likely to be higher, as totals are based on second-quarter reports obtained from only 60 of the most active 145 groups.

The Public Citizen report, Second Quarter Stockpile: 527 Groups Continue Soft Money Grab, is the fourth in a series of studies. The reports examine two types of 527 groups: those controlled by members of Congress ? “politician 527s” ? and organizations created to promote specific ideological causes, or “non-politician 527s.” Named after the section of Internal Revenue Code that regulates them, 527 groups can accept unlimited soft money contributions from corporations, unions and individuals.

The second-quarter disclosure reports show a soft money race between several possible presidential contenders. The top non-politician 527s also displayed their fundraising prowess and used the money to finance voter mobilization efforts and begin running issue ads.

“The 527 groups continued their soft money grab and were busy during the second quarter collecting millions of dollars,” said Frank Clemente, director of Public Citizen?s Congress Watch. “These special interest groups are gearing up for the November elections and are lining their coffers with soft money that will be used for issue ads and other activities aimed at influencing elections.”

Findings from the report include:

  • One hundred forty-five groups have raised $77.9 million and spent $77.5 million since January 2001, according to available reports. There is no way to compare these figures to the last election cycle because 527 groups were not required to disclose their contributions and expenditures prior to July 2000.
  • Twenty-five of the top 527 groups during the 2002 election cycle have raised $57.1 million and spent $54.6 million. (Second-quarter reports are unavailable for six of these groups.) The list of the top 527 groups during the 2002 election includes 13 Democratic/liberal leaning and 12 Republican/ conservative leaning organizations.
  • Since disclosure of 527 groups? finances was first required two years ago, groups active in federal elections and identified by Public Citizen have taken in $156.7 million and spent $181.1 million.
  • Presidential aspirants? 527 groups were particularly active during the second quarter. Sen. John Edwards? (D-N.C.) New American Optimists took in $1.9 million from April to June, making it the most successful politician 527 group of the quarter. Senate Majority Leader Tom Daschle?s DASHPAC took in $1.1 million ? 10 times the amount the 527 group collected in the first three months of the year and nearly the total raised in the first 21 months that disclosure was required.
  • Highly partisan “non-politician 527s” were active during the second quarter and collected $8.6 million. The largest, the American Federation of State, County and Municipal Employees (AFSCME), a labor organization representing 1.3 million public service and health care workers, raised $3.4 million. Other top non-politician 527 groups include the League of Conservation Voters ($1.3 million in receipts), Impac 2000 ($955,822) and EMILY?s List ($525,355).
  • The new disclosure reports show how 527 groups are working to influence the upcoming election. The Club for Growth, which files monthly disclosure reports, spent nearly $200,000 on issue ads in April and May 2002. (The Club?s June report is not yet available.) These ads target congressional candidates and ran in Iowa, Indiana, Texas, California and New Jersey. And Pro-Choice Vote is taking to the streets in Arkansas, Georgia and Missouri. The group spent $89,324 to pay for field directors and field organizers in those states.

Problems with the IRS disclosure system persisted during the second quarter:

  • The IRS disclosure Web site indicates that second-quarter disclosure reports are available for several groups active in federal elections, but electronic links to the reports do not work. From August 5?12, links to the second-quarter reports took users only to an error page for groups such as the Gay and Lesbian Victory Fund, Rep. Martin Frost?s (D-Texas) Lone Star Fund, Rep. Charles Rangel?s (D-N.Y.) National Leadership PAC and the National Tax Limitation Committee.
  • No information ? not a statement of organization or periodic disclosure reports ? is available on the IRS disclosure Web site for some groups that appear to be active in federal elections, such as The National Council for a Republican Congress and Citizens for Better Communities.

“Groups continue to skirt the law and it appears that the IRS is not minding the store,” Clemente said. “The value of disclosure by 527 groups is greatly diminished when these organizations are not held accountable by the government and not open for scrutiny by the public.”

Click here to view a copy of the report.