Tax-exempt political advocacy groups, known as 527s, are investing growing amounts of money on state-level races and issues this election year in a shift away from topics affecting all 50 states, the latest financial figures show. A report from the Center for Responsive Politics, a nonpartisan campaign watchdog, details a national trend – occurring in 21 states – of increased activity by 527s towards state-focused endeavors.
The report shows that more state-focused 527s are popping up and that they are spending more money in 2006 than in 2004, when groups such as Swift Boat Vets and MoveOn.org made headlines with attempts to sway the presidential race. But there is no presidential race this year, and 527s are sprouting up in states such as Colorado, where 14 new groups have formed since the 2004 election to weigh in on a competitive governor's race, a fight for political control of the state Legislature, and 14 ballot initiatives that will be decided in November.
In addition to the Rocky Mountain State, spending by 527s has increased by the greatest percentage in Alabama, New Jersey, North Carolina, and Virginia, according to the Center's report. Fund raising by 527s increased by the greatest percentage in Colorado, New Jersey, North Carolina, Oklahoma, and New York. The 527 groups burgeoned after a 2002 federal campaign finance law banned “soft money,” unlimited cash contributions that political parties had been able to spend to influence elections through "voter education" or "issue advocacy" but not directly on candidates.
To get around the ban, contributors found a new legal outlet in 527 groups, which can use unlimited contributions for issue advertising or get-out-the-vote efforts but also are prohibited from directly advocating for the election or defeat of a specific federal candidate.