Aug. 16, 2004
527 Committees Arrive in North Carolina Politics
By J. Barlow Herget
RALEIGH - Most North Carolinians like to think that their elections are not for sale and that the candidates running for office are the ones paying for the campaigns. Indeed, rivals used to score points by accusing their opponents of accepting money from “outsiders” who didn’t live here and presumably weren’t “one of us.”
No longer.
Voters here and elsewhere have learned that candidates -- ones you like and ones you don’t -- accept contributions from wherever they can get it legally. Still, I suspect that few North Carolina voters would approve of an out-of-state organization spending more on a candidate’s campaign than the candidate him-or-herself.
Enter the 527 political nonprofit.
The name comes from the IRS code number that defines a 527’s operations much like the nickname for nonpolitical nonprofits that are often called 501(c)(3)s. 527s have been around, and they have been growing, especially this year in the wake of the McCain/Feingold Bipartisan Campaign Reform Act of 2002.
There are ground rules for 527s in regard to their politicking. A 527 committee cannot be tied directly to a candidate’s campaign. No strategy meetings, no sharing of polling data, no contributions. It cannot ask you to vote for or against a specific candidate.
Such committees are supposed to motivate voters, educate them about issues and promote other get out the vote activities.
People and organizations that want to influence elections with money have found that 527 nonprofits are an acceptable substitute for the millions of dollars that such people gave in soft money gifts to the national parties.
This column reported earlier this year about the growth of 527 contributions and predicted more to come. Well, it’s come.
The final figure won’t be counted until the end of the year, but reports about individual and corporate contributors indicate that the 527 total take will far surpass the record $86 million collected in 2003. One tally by the watchdog, nonprofit Center for Public Integrity in Washington reported that the nonprofits collected $185 million by the end of July.
A story in TIME magazine predicted that 527s would raise and spend $190 million just on behalf of Democratic presidential nominee Sen. John Kerry before election’s end. That’s not counting all the money that 527s will spend in support of President Bush’s campaign or gubernatorial, Senate and Congressional campaigns.
The most notorious 527 de jour is one called Swift Boat Veterans for Truth. It is financed by wealthy Texans and it has sponsored attack ads on Kerry’s Vietnam War record.
The Swift Boat advertisements illustrate one of the unanticipated uses of 527s: to provide the low blows in a campaign. Candidates can wash their hands of the dirty attacks while reaping the benefits. It is a role that political parties, supposedly running independent campaigns, sometimes also play.
The 527s engaged in the bruising presidential campaign have attracted most of the attention, but North Carolinians have seen their influence in races here. When U.S. Senate candidate Rep. Richard Burr, R-Winston-Salem, withheld his own campaign ads earlier in the year while his opponent Democrat businessman Erskine Bowles was on the air, a group called Americans for Job Security out of Alexandria, VA, helped out. The committee sponsored a series of uncharacteristically positive ads, touting Burr’s record and asking viewers not to vote for Burr, but to thank him for the great job he was doing.
Bowles is not without 527 help, too. Just last week, the League of Conservation Voters based in Washington announced that it will run “a pretty substantial campaign on Bowles’ behalf,” according to Mark Longabaugh, the League’s political director.
Two state 527s made news and prompted last-minute legislation in July to regulate 527s here. Republican Co-Speaker Richard Morgan of Southern Pines formed a committee called the N.C. Republican Main Street Committee and one of Morgan’s critics, former Republican Rep. Art Pope of Raleigh, created the N.C. Legislative Majority Committee.
One of Pope’s businesses funded his committee with a $200,000 gift, and Morgan's received $100,000 from one corporate supporter. Both committees helped finance very negative campaigns for and against Morgan’s Republican allies in the House, helping to defeat five of them.
The new legislation will require 527s to disclose their contributors and limits 527 spending in the final days of a campaign. Most importantly, the law prohibits corporate contributions.
The law could impact the governor’s race, too. The Republican nominee, former state Sen. Patrick Ballantine of Wilmington, is counting on millions of dollars in support from the Republican Governors’ Association, possibly more than his own campaign might spend against Gov. Mike Easley, who has raised far more money.
It will be a test of the new law to see if 527 money accounts for more spending than the candidates themselves.
Barlow Herget is a former Raleigh city councilman and writes the Follow the Money column for the N.C. Center for Voter Education.
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