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Since many nonprofit organizations labeled 501c3s by the US Tax Code have severe restrictions on engaging in any political activities, the Internal Revenue Service (IRS) offered a different designation for not for profit groups that wanted to specifically involve themselves in political actions. A 527 group is the IRS designation for a nonprofit group that mostly helps elucidate the issues surrounding an individual’s candidacy, or that may lobby for specific laws or reforms. 527s can also be political action committees (PACs), though these are subject to more stringent rules in terms of donations.
These organizations are often a way around some of the campaign financial reform that now limits the donations a politician can take to run for office. The 527 group that is not a PAC is independent of the candidate running for office. In recent history, some of these organizations have included Swift Boat Veterans for Truth and MoveOn.
Though the candidate running for office can have nothing to do with raising money for a 527 group, such an organization can be particularly effective in either influencing voter opinion. Yet since it is independent of the politician, he or she really doesn’t have any control over what the 527 group does. This can consequently lead to some fairly dirty political practices. In fact Swift Boat Veterans for Truth was considered so effective at disseminating possibly dubious information about Senator John Kerry’s take on the Vietnam War, that “swiftboating” has become a term used to describe dirty and negative ads that may not be entirely truthful and can destroy a politician’s candidacy.
There are some very fine lines as to what a 527 group can and cannot do. For instance both MoveOn and Swift Boat Veterans were fined by the Federal Election Committee (FEC) for actions committed during the 2004 Presidential Campaign. The FEC concluded both organizations had actually attacked the candidates rather than the issues, and thus influenced voting for specific candidates. In strictest terms, a 527 must focus on the issues, and not attack or defend a candidate. It is not supposed to support a candidate, and if it is found to have advocated for the election or the non-election of a candidate, it is in violation of 527 rules.
As mentioned, the line is very fine, especially in heated political contests between candidates. A 527 group that is devoted to specific issues is often supporting the candidacy of likeminded people. This type of organization may do as much as it can — within limits — to suggest that one candidate is better than another, or that one candidate is inferior to another. In fact, the practice of 527s springing up around certain candidacies has led the US Congress to consider changing the laws governing them. As yet, no law banning 527s or restructuring them has been passed.
Frequently Asked Questions
What is a 527 group in the context of American politics?
A 527 group is a type of U.S. tax-exempt organization named after "Section 527" of the Internal Revenue Code. It is created primarily to influence the selection, nomination, election, appointment, or defeat of candidates for public office. Unlike political action committees (PACs), 527 groups are not subject to contribution limits and spending caps, allowing them to raise unlimited funds from individuals, corporations, and unions, as long as they disclose their donors to the IRS and the public.
How do 527 groups differ from other political organizations like PACs or Super PACs?
527 groups are distinct from PACs and Super PACs in their regulatory and financial constraints. PACs can contribute directly to candidates' campaigns but face limits on contributions and expenditures. Super PACs, also known as independent expenditure-only committees, can raise and spend unlimited funds to advocate for or against political candidates, but cannot coordinate directly with campaigns or parties. In contrast, 527 groups focus on influencing elections through issue advocacy and voter mobilization without directly contributing to candidates.
Can 527 groups support specific candidates, and how do they influence elections?
While 527 groups are legally prohibited from coordinating with candidates or parties and cannot make direct contributions to campaigns, they can still significantly influence elections. They often support specific candidates indirectly by running issue advocacy ads, organizing get-out-the-vote efforts, and funding voter registration drives. These activities can shape public opinion and voter behavior, thereby affecting the outcomes of elections.
What are the reporting requirements for 527 groups?
527 groups are required to register with the IRS and disclose their donors and expenditures. They must file periodic reports that detail their contributions and disbursements, providing transparency into their financial activities. This information is publicly available, allowing voters and watchdog organizations to track the flow of money in politics and hold these groups accountable for their spending.
Have 527 groups faced any criticism or controversy?
527 groups have been subjects of criticism and controversy, particularly concerning their ability to raise and spend unlimited funds, which some argue leads to undue influence over elections and policymaking. Critics also point to the potential for "dark money," where the original sources of funds are obscured through a network of organizations, making it difficult to trace contributions back to their original donors. This lack of transparency has sparked debates about campaign finance reform and the role of money in politics.