by John K. Carlisle, Neil Hrab
August 4, 2004

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History will remember the 2004 election for many things, most notably for its effect on the political futures of George W. Bush and Iraq.  But the election also marks the emergence of a previously ob­scure tax-exempt, nonprofit organization. We refer, of course, to the rise of so-called “527” political committees.  The impact of these groups on voters may well determine the election’s outcome.

A “527” organization—the name de­notes the portion of the federal tax code that regulates its operation—can accept unlimited contributions from unions, indi­viduals and other private sources to spend on political activities such as television and radio ads, voter mobilization drives and other advocacy efforts. There are two significant legal limits on 527s: 1) its activi­ties are permissible as long as the group doesn’t directly coordinate them with a political party or candidate; and 2) the activities must be focused on issues.

“527” groups have existed for many years, but it wasn’t until 2003 that they became major players in election cam­paigns.  The catalyst was a series of huge donations made by prominent liberal ac­tivists determined to defeat President Bush and the GOP.  Billionaire financier George Soros donated more than $15 million in just a few months to three 527 groups—America Coming Together, MoveOn.org and the Media Fund.  Other liberal activists, such as Soros’ friend and ideological partner Peter Lewis, donated millions more to these to these and other 527 groups set up by labor unions, environmental groups, feminist organizations, the trial lawyers, and other liberal special interests.

Published in Capital Research Center's Organization Trends

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