A History of Campaign Reform

1. A History of Campaign Reform Interest groups & Advertising Part 2 Money, like light, will always find the path of least resistance.

2. With the passage of the Bipartisan Campaign Reform Act (BCRA), many groups have tried to find loopholes in giving as much money to candidates as they legally can. • This has resulted in the increase use of: • Issue advocacy ads • 527 Organizations - also known as 501(c) Organizations • Independent Expenditures

3. 1) Issue advocacy has become an important way for interest groups to raise funds which will be used to pay for advertisements that are meant to sway voters. • Issue Advocacy ads do not contain magic words like: “Vote for,” “Elect,” “Support,” “Cast your ballot for,” “Smith for Congress,” “Vote against” • Therefore, money spent on issue advocacy ads is unlimited and undisclosed because it deals with issues.

4. Interest groups have found a way to circumvent disclosure and contribution limits through issue advocacy. • Interest groups and media consultants have become very clever in communicating an electioneering message without using any magic words. • For example, two Texans formed a group named “Republicans for Clean Air” & ran ads in some 2000 presidential primaries that were really meant to attack John McCain • Campaign issue ads sponsored by interest groups have been nearly indistinguishable from candidate-run ads • In some campaigns, interest groups and parties spent more money than the candidates did • Typically, these ads were even more negative than the ads run by candidates The problem with issue advocacy ads is that there is no one accountable for the content of the ads

5. 2) 527 Groups are independent groups set up under section 527 of the Internal Revenue Code. They can receive and spend unlimited amounts of money. • A 527 organization is a group that broadcasts an electioneering communication within one month of a primary or 2 months of a general election • For example, the Media Fund (a 527 organization) spent $54 million in ads against President Bush up until 60 days before the election • 527 organizations MUST: • Not use corporate or union treasury funds • Report the expenditures associated with the broadcast • Disclose all the sources of all funds it has received since January 1 of the preceding calendar year

6. Two important 527 Organizations: • Americans Coming Together, Democrat leaning group: • It raised and spent an estimated $76 million in presidential battleground states • Most came from one wealthy investor • Helped organize many other interest groups to register and mobilize voters • Swift Boat Veterans for Truth: • It attacked John Kerry’s war record • Although their advertising was made on a low budget, their group’s ads generated widespread news coverage • Their attacks were effective in part due to the lack of a strong response and rebuttal from Kerry • Afterwards, Kerry admitted that his campaign should have addressed the Swift Boat Veterans for Truth organization’s ads more seriously.

7. 3) Independent expenditures are contributions that were raised independent of a party or candidate • The BCRA does not constrain independent expenditures by groups, political parties, or individuals, as long as the expenditures by those individuals, parties, or groups are independent of the candidate and fully disclosed to the FEC. • The following have used their own money and filed it as independent expenditures: • 2000: Stephen Adams, owner of an outdoor advertising firm, spent $2 million to support George Bush • 2004: Billionaire George Soros spent $2.3 million in independent expenditures against the president • He used the money to run full-page newspaper ads against Bush, fund a speaking tour during which he expressed his opposition to Bush’s reelection, and maintained a website and sent mailings to voters in key states