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Click here to download a PowerPoint presentation of this study's executive summary.

For immediate release.
May 30, 2006
Contact: Bryan Warner, N.C. Center for Voter Education, 919-839-1200

Influence of Stealth Political Groups a Growing Concern to N.C. Voters

RALEIGH – National groups such as the Swift Boat Veterans for Truth and MoveOn.Org may have been many voters' first experience with a special kind of political committee, exempt from many of the campaign and election laws that apply to political candidates and their campaigns.

But many Republican primary voters were able to witness how these types of groups operate first-hand, as at least one North Carolina-based committee drove the debate in several hotly contested elections.

These political committees, called “527” groups due to the IRS Code of their special tax status, engage in electioneering activities outside the scope of many state election laws covering contribution limits and public disclosure of where their money comes from.

A study commissioned this month by the nonpartisan N.C. Center for Voter Education found that North Carolina voters are very concerned by the political influence of these groups, and are supportive of efforts to treat them like other political organizations.

The survey of 500 likely North Carolina voters found that, without any prompting or specific information about 527 groups, 80 percent are concerned about the role campaign spending by outside groups has on elections for state and local office.

Worries rose when specific descriptions of how 527 groups operate were given to voters. Eighty-five percent of voters are concerned that while individuals can donate only $4000 per election cycle to candidates and political action committees, no such limit exists for donations to 527 groups.

Eighty-three percent are concerned that while donations from businesses to candidates and PACs are illegal in North Carolina, businesses can donate unlimited amounts of corporate money to 527 groups.

Eighty-eight percent are concerned that unlike political candidates, PACs, and state parties, 527s were not required to disclose their donations or spending to the State Board of Elections.

“We were surprised by the public's awareness of 527 groups, and the intensity of their concern,” says Chris Heagarty, executive director of the N.C. Center for Voter Education. “In each area of 527 behavior we described, over 50 percent of the voters were not just concerned, but said they were very concerned.”

The concern is most intense among the key swing voting group, the ticket-splitters – voters who may frequently cast a ballot for candidates of different parties – 90 percent of whom express concern on all of these issues, suggesting this topic could have an impact on voters' decisions this fall.

When asked whether they would be more likely or less likely to vote for a legislator who supported legislation to put further restrictions on 527 groups, or if it would not make a difference, 55 percent of voters said they would be more likely compared to only 10 percent who would be unlikely to support such a candidate, while 31 percent said it would make no difference.

“The high visibility of campaign finance irregularities has created the groundwork to pass meaningful reforms in the legislature to limit the role special interest groups can have in elections, especially in regards to 527s,” says Randall Gutermuth, director of political affairs with American Viewpoint, the polling firm that conducted the study.

The General Assembly is considering tougher regulations of 527s along with other campaign finance reforms recommended by the House Select Committee on Ethics and Governmental Reform.

To address the concerns expressed by voters, the N.C. Center for Voter Education has released several recommendations for changing how 527 political groups are treated under state law.

Specifically:

• Limit legal contributions to 527 groups to $4,000 per person in each election cycle, the same amount permitted for contributions to candidates.
• Ban contributions from businesses and unions for political activity by 527 groups.
• Require 527 groups to disclose their fundraising and spending with the State Board of Elections.
• Explore providing financial aid to candidates attacked by 527 groups, to permit them to reply or respond to charges made against them.

Heagarty notes that legislators can also significantly diminish the impact of 527s and special interest cash in North Carolina's elections by building upon the state's system of public campaign financing currently used for judicial races.

“In order to address the problem of someone from outside a legislative district, or out of state, controlling who gets elected,” Heagarty says, “the legislature might want to explore a set of rules for contribution and spending limits and public funds, similar to in our judicial system, which cut special interest spending in those races in half in 2004.”

Critics may contend that placing regulations on 527 groups is akin to limiting free speech and may be unconstitutional, despite the recent McConnell v. FEC Supreme Court ruling upholding greater regulation of these groups.

The study finds that the free speech argument has little resonance with voters, even without hearing any mention of the court ruling. When given the argument that limiting spending by 527 groups is unconstitutional and limits the free speech of individuals, only 10 percent of the voters say they are less likely to support reform legislation.

The poll was conducted May 16 through May 18 and has a margin of error of plus or minus 4.4 percent.

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