527 Groups Nearly Match All 2002 Political Donations

by Marty Logan

(IPS) -- Groups devoted to electing one of the two main contenders in the U.S. presidential contest are raising cash at an unheard-of rate, but that does not mean "special interests" are dominating the democratic process, say experts.

Political action committees (PACs), bodies that can raise unlimited funds and spend millions on election advertising so long as they do not specifically call for the election or defeat of a federal candidate, have raised $391 million during the 2003-2004 election cycle, says a new report by the Center for Public Integrity.

Just less than half that cash has been solicited by groups formed either to elect or defeat President George W Bush on Nov. 2, adds the analysis, '527 Fundraising Nets a Record Haul', published Monday. The rest has come from organizations that also are involved in congressional elections.

From July to September the PACs (also known as 527 committees after the taxation rule that governs their behavior) collected just $12 million less than in all of 2002, adds the report.

Its author Derek Willis attributes the huge jump in fundraising to "the competitiveness of the (election) race and the opportunity for 527s," after campaign finance reforms in 2002 ended "soft money" donations -- unlimited contributions to candidates from individuals, corporations or labor unions.

PACs are forbidden from coordinating their spending with candidates' campaigns, thus believed to have less influence on candidates than "soft money."

They put most of their money into advertising and, particularly this year, into efforts to increase the number of Americans who will vote on election day, says Anthony Corrado, a visiting fellow at Washington's Brookings Institution.

He believes the 527 committees' influence is limited, for one reason because both the Democrats (of challenger Senator John Kerry) and President George W Bush's Republican Party have signed up millions of donors who have given small amounts of cash since the campaign reform was put in place.

"The parties have conformed to the new law: you don't see members of Congress any more seeking unregulated contributions. Instead, what the parties have done is focus more, in particular, on smaller donors as a way to make up the money. And they have had remarkable success," Corrado told IPS.

"They have essentially raised about $175 million more just from donors who give less than 200 dollars, and they have already replaced more than half of the soft money that they raised in the last election cycle."

That said, the cash collected by the 527s "is not an insignificant amount of money, but in the context of an election where we're going to spend somewhere in the area of $1.3 billion, if we include the cost of the (nominating) conventions, it's not by any means the largest piece of the pie," added Corrado.

Two groups created to oppose Bush's re-election, Americans Coming Together (ACT) and its partner, the Media Fund, have raised a total of $97 million, according to the center's report. The most successful pro-Bush committee, Progress for America Voter Fund, has generated more than $30 million, it adds.

The center says 36 individuals or couples have given at least one million dollars to 527 groups during the 2003-2004 election cycle, led by Peter B Lewis, chairman of Progressive Insurance, who contributed close to $19 million through Sept. 30 to committees opposed to Bush.

Financier George Soros, who in September announced he would embark on a speaking tour to denounce the president, gave $18 million to many of the same groups that received money from Lewis.

While Corrado pointed out that most 527 money comes from individuals not corporations -- in contrast to "soft money" -- "special interest cash continues to find its way into the campaign coffers of Republicans and Democrats," counters a recent article published by Corpwatch.

"The soft money of past elections has simply morphed into new avenues of political influence: through political organizations, ostensibly outside the party apparatus, but in fact playing the role the Democratic National Convention (DNC) and Republican National Convention (RNC) played in past elections," added the article on the website of the non-governmental organization (NGO).

The money is also channelled through "huge convention funds with budgets that rival what used to be spent on entire elections and through powerful Washington lobbyists," it adds.

"During the current election, the largest sums of corporate cash are flowing to candidates through a process called bundling," says Corpwatch, referring to the practice of campaign donors collecting contributions from friends, combining the money and donating it in their own names.

The practice is troubling, agrees Mary Boyle, press secretary at Common Cause, a non-profit Washington-based group that advocates for the public interest in politics.

Her organization has tracked "bundled" money and how its contributors have benefited from the process during the Bush administration.

"In each case, the Pioneer (large donor) has helped Bush win election and Bush administration policies have benefited the Pioneer -- in many cases, at the expense of the public interest," says the group on its website.

Yet Boyle says she is heartened by the number of small donations that have been made during the 2004 campaign and "really encouraged by all the people who have been getting involved in this election."

Report author Willis is somewhat more subdued about campaign spending. "You get more money every cycle, particularly in this cycle. The emphasis on money hasn't gone away and may never go away."

"I don't think (that reforms) put in place after 2002 were really designed to eliminate money in politics, because I just don't think that's a realistic or achievable goal. There obviously have been some efforts to try and make it a little bit less of a huge factor."