Where Have All the 527s Gone?
by Dylan Loewe on April 11, 2008 in Blog, Loewe Political Report
In 2002, Congress banned political parties from accepting soft money contributions and coordinating expenditures with candidates for federal office. In the presidential election two years later, rather than disappearing from the process, soft money was instead funneled into less accountable hands. Thus, the 527 organization was born.
Hundreds of millions of dollars were spent on independent advertising and voter mobilization efforts in 2004, with a number of those efforts gaining infamy with their impact on the campaign. In 2007, major donors of the Democratic Party convened to determine how to coordinate their soft money expenditures for the 2008 election, concluding that they would form a single organization, known as Fund for America, that would coordinate spending.
With the dramatic impact that 527s had on the 2004 election, many Democrats, including major players in the sometimes secretive world of independent political organizations, believed that 527 spending would play an equally crucial role in retaking the White House. When Fund for America was announced, its spokesperson suggested that the group would spend over $100 million on the election.
As of today, that goal appears to be far out of reach.
To the surprise of many, 527 organizations have had an especially difficult time raising money during the cycle. Fund for America is expected to announce raising only about $3 million during the first quarter of 2008, a number that is even less impressive than the tally from their end of year filing. As Ben Smith reported, though the organization had planned to fund a major advertising blitz to help define John McCain in terms advantageous to Democrats, they have yet to accrue the funds to do so.
Ben Smith also reported that Campaign to Defend America, the organization created to spend Fund for America advertising dollars, has recently undergone a shake-up. Tom Matzzie, the Washington Director of MoveOn.org and former head of Americans Against the Escalation in Iraq, is no longer the public face of the organization. David Brock, of Media Matters fame, will
take over that role.
Brock has stated that the organization intends to raise $40 million for an advertising campaign, though he admits that fundraising at this point has become a bit of a scramble. Even if he reaches his goal, it will fall well short of the $57 million that Media Fund (it’s 2004 counterpart) spent trying to elect John Kerry.
There is no doubt that independent money, however unsavory, can play a crucial role in Barack Obama’s victory. Though Obama will undoubtedly continue to attack McCain aggressively for his policy stances, there are certainly methods to define McCain that only a 527 can comfortably pursue. And given that much of Obama’s persona is posited on his new kind of politics, he might find it especially difficult to levy charges that could nonetheless prove effective.
One must wonder why fundraising has been so difficult, especially in an election season that has proven so fruitful for Democrats. Perhaps major donors feel marginalized. After all, their importance to the party, and with it their influence, has diminished dramatically with the success of Obama’s small donor base. In a party where a candidate can raise multiple millions of dollars off a single email solicitation, it’s difficult to prove that a $4600 check really matters.
It may also be that the party’s major donor infrastructure has grown out of the Clinton era, and that it is more a part of the Clinton machine than the Democratic Party. Her poor performance, and the perception of a new, less promising, inevitability for her campaign, may be preventing some donors from writing checks to assist Barack Obama.
As Chuck Todd suggested yesterday on MSNBC, it may also be that donors are concerned with the risk of criminal penalties for participating in an organization that may not be lawful. Though possible, this scenario seems unlikely. Other 527 organizations found to have violated campaign finances laws by the FEC have been penalized in the past, but only with minor monetary sanctions. When America Coming Together, a Soros-backed voter mobilization effort, was found to have violated campaign finance law, they received a $775,000 fine, the largest in FEC history. But the fine came more than two years after the 2004 election, and it was miniscule compared to the $80 million the organization had spent on the election.
Perhaps instead, soft money has been slow to creep into the campaign because it seems unnecessary. Obama has, after all, raised almost as much money in the past three months as the Democratic Party spent on the entire 2004 election. But this is also a difficult conclusion to fully accept. Major soft money donors are usually quite astute politically, and would (or at least should) recognize that outside organizations can play a significant role in a campaign, irrespective of the nominee’s fundraising totals.
Perhaps, as Soros aide Michael Vachon suggested, the problem is that major donors are too focused on the primary to turn toward the general. If that’s the case, it may also be that 527s will be fully funded eventually. But if the current trend continues to November, it will serve as yet another example of the earth shaking changes the current campaign has had on the way presidential elections are conducted. It is, to be sure, in Obama’s best interest for 527’s to bolster his candidacy. But if they are unable, and if he wins the White House anyway, it will be further evidence of his extraordinary ability to remake the campaign finance calculus.
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I thought that 527s was supporting the statu quo:Clinton! And thus proving to be out of touch…