Editore"s Note
Tilting at Windmills

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May 12, 2004
By: Kevin Drum

FOLLOWING THE MONEY....You've heard of ACT, right? It's one of those evil 527s (groups organized under Section 527 of the tax code) funded by the evil George Soros for the evil purpose of evicting George Bush from the White House. Republicans, as you may also know, have petitioned the Federal Election Commission to shut down 527s, suggesting that they are nothing more than giant loopholes in campaign finance laws that prohibit candidates from raising "soft money."

The FEC will rule on this later this year. But have you heard of 501(c)s? In the past, these were normal advocacy groups, like the NRA or the Sierra Club, that also happened to spend some money on issue ads around election time. Today, though, there's a brand new kind of 501(c):

Like many of its neighbors, [Americans for Job Security] is organized as a 501(c)(6), which is to say a not-for-profit "business league" or trade organization. But as trade organizations go, it is rather unusual. Not only is the group's membership--several hundred individuals, corporations, and other trade organizations--secret, but by all appearances, the members don't share a particular line of business. Despite a budget of millions of dollars a year, AJS doesn't have the kind of public relations or policy staff that, say, the Chamber of Commerce does....About the only thing that AJS does is buy television, radio, and newspaper advertisements--lots of them.

....The Democratic 527s admit up front that electioneering is their primary purpose; indeed, that fact is built into the legal definition of a 527. But to merit 501(c) status, the GOP groups must--and do--insist that electioneering is not their primary purpose. Indeed, like most of the GOP shadow groups, AJS reports on its 2000 returns spending zero dollars on political activity.

It turns out that while Republicans are eager to shut down 527s, which are largely liberal organizations, they are strangely reticent to regulate 501(c)s. Can you guess why?

Nick Confessore has the whole story in this month's issue of the Washington Monthly. It's must reading.

Kevin Drum 2:14 PM Permalink | Trackbacks

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