Republican 527s Lacking Energy

Posted February 27, 2004 at 6:00pm

Billionaire financier George Soros’ willingness to provide seed money for a variety of progressive 527 groups has created a sense of urgency among conservative-minded organizations that they must quickly ramp up their fundraising and organization if they hope to match the efforts of the ideological left.

But according to those familiar with these groups, little planning has been done for future operations and there is sparse energy behind them in the Republican donor community, which remains spooked by the legal uncertainty surrounding such organizations.

“The summer is going to be extremely miserable for conservative groups if they don’t get their act together in the next 60 days,” predicted one knowledgeable Republican.

Much of the problem stems from a philosophical difference between the types of donors expected to fund these soft-money organizations, said operatives involved on both sides of the struggle.

Democrats have a handful of extremely wealthy individuals — led by Soros, Progressive Corp. President Peter Lewis and the Hyatt family — willing to give millions of dollars to these groups even as the Federal Election Commission continues to ponder the role 527s can play in November.

Soros contributed $5 million to ACT in 2003; Lewis chipped in $3 million.

Movie mogul Steve Bing donated $1.9 million to a joint fundraising committee for ACT and the Media Fund (known as the Joint Victory Campaign 2004). But Haim Saban, the largest Democratic soft-dollar giver last cycle, did not contribute to any of the groups.

“There are Democrats who feel more compelled to give money based on a personal hate” of President Bush, said one GOPer of these deep-pocketed donors.

The targeted donor community for conservative groups is the corporate world, which appears much more wary of giving heavily because of the somewhat-shaky legal standing of the organizations.

“Corporate America is very cautious with their contributions,” conceded Susan Hirschmann, who heads up the Leadership Forum, a conservative-minded 527.

Another Republican added the GOP groups must find a “sugar daddy” comparable to Soros in the near future if they hope to fight pro-Democratic groups to a financial draw come November.

“Until they have someone to get their groups off the ground, it is going to be extremely tough for Republicans to come anywhere near where Democrats are,” said a GOP source.

Democrats have no less than eight 527 groups, known collectively as the “shadow Democratic Party,” working in conjunction to defeat Bush.

All told, these progressive 527 groups raised $22 million in 2003, with ACT leading the way with $13 million.

The Leadership Forum brought in $225,000 last year, the only conservative-leaning 527 to do any active fundraising in the period.

These organizations, named for their place in the Internal Revenue Service tax code, can accept unlimited contributions but must file reports periodically with the IRS documenting their financial activities.

Aside from a contrast in the donor base for progressive and conservative 527s, the pro-Democratic groups have also been boosted by the signing on of former key party operatives, many of whom worked for presidential candidates earlier this cycle.

Jim Jordan, former campaign manager for Sen. John Kerry’s (D-Mass.) presidential effort, is now a senior strategist for America Coming Together, the Media Fund and America Votes, three of the most lavishly funded groups.

Erik Smith, a former spokesman for Rep. Richard Gephardt’s (D-Mo.) presidential campaign, is now the executive director of Media Fund, which is being headed by Clinton administration official Harold Ickes.

Andy Grossman, former executive director of the Democratic Senatorial Campaign Committee, has also recently taken a post with ACT, while Cecile Richards, a former top aide to House Minority Leader Nancy Pelosi (D-Calif.), is running America Votes.

These operatives are barred from discussing the activities of their groups with the Members for whom they formerly worked.

Republicans note that the vast majority of their political talent is consolidated in helping to re-elect Bush and not as focused on getting these 527 groups up and running.

Hirschmann was chief of staff to then-House Majority Whip Tom DeLay (R-Texas). She runs the group in conjunction with former New York Rep. Bill Paxon (R), who is now a lobbyist with Akin Gump Strauss Hauer & Feld.

The concerted effort to establish a variety of groups with each handling different aspects of electioneering and working hard to coordinate their activities was born out of necessity, according to Jordan.

“It has been obvious to most of us on the left for a long time that one of our real weaknesses has been coordination, cooperation and the assignments of specific roles and jobs,” he said. “We are doing our best to catch up to Republicans in that regard.”

Jordan said that the creation of the groups was made even more essential by Republicans’ stranglehold on the White House and Congress and the GOP’s superiority in raising hard dollars from a huge network of small donors.

A Republican strategist agreed, noting that while Democrats have a “compelling reason” to form these groups, “Republicans have been taking for granted the fact that we have a superiority in raising hard money and there hasn’t been that need” to form 527 groups.

In the 2002 cycle, the three major Republican Party committees raised $442 million in hard money to the Democrats’ $217 million.

So far in this cycle Republicans have brought in $228 million in hard dollars to Democrats’ $104 million.

Some Democrats argue that Republicans are simply playing possum regarding their harvesting of soft money.

“Republicans have skipped the setting up of [527] committees and have turned their trade associations into stand-alone political units,” said Democratic consultant Jenny Backus, pointing to the increased political activity of the GOP-friendly Chamber of Commerce, among others.

The Chamber, which is a 501(c)(6) trade association, recently announced plans to spend $40 million on state and federal races, a substantial increase in its disbursements on political activities.

“Republicans have taken a step out of the process,” added Backus. “The money never leaves the interest groups.”

All of this maneuvering comes even as the application of the Bipartisan Campaign Reform Act to 527 groups continues to evolve.

In response to a formal request by Americans for a Better Country — a conservative-aligned 527 — for a ruling on the limits of its activities, the FEC issued a Feb. 18 opinion that curtailed the spending of soft money to influence federal elections by groups that have registered with the FEC — meaning they raise both hard and soft money.

Those groups — like ACT and ABC — must use a combination of hard and soft dollars to fund their activities, said the FEC commissioners.

Led by Republican National Committee Chairman Ed Gillespie, GOPers spun the ruling as a major triumph that would place significant strictures on the activities of the groups on the left.

But Republicans seeking to raise funds for similar groups said that Gillespie’s outspokenness has actually placed a further chilling effect on their efforts.

“While Republicans at the RNC think they are helping by filing the 527 complaint, all it did was freeze the donor community,” said one GOP source. “It gives Democrats another two-month head start.”