I am on an Election Law listserv that is currently having an interesting exchange over political committees set up as 527 organizations to get around the campaign finance restrictions.
Campaign Finance reform (“BCRA”) seeks to exercise more control over Political Action Committees (PACs) and other political organizations trying to influence elections. BCRA defines political groups (called “political committees”) subject to regulation as those that collect or spend more than $1000.00 annually for the purposes of influencing the nomination or candidacy of a person running for federal office. If you meet that test, you are subject to disclosures, limits on contributions, and on how expenditures are made.
In order to get around the restrictive contributions limits of BCRA, organizations like the liberal Americans Coming Together (“ACT”) have set up 527 organizations, which are non-profit political organizations, on the theory that they would be 527 organizations under the Internal Revenue Code (“IRC”) and not political committees under BCRA.
But, the IRC defines a 527 as an incorporated or unincorporated group that receives contributions for and expends money on exempt functions. The exempt function is defined as influencing or attempting to influence the election, selection, or nomination of any candidate in a federal, state, or local election.
It seems to me that, given the definitions, if a group is a 527 participating in federal elections, it is also a political committee under BCRA and subject to the contribution restrictions. Maybe Soros’ contributions were illegal and maybe that is why Republicans are not as eager as the Democrats to jump into the 527 thicket.[NOTE: ACT may not be the best example, though it is the most visible, because it apparently has both a 527 and a PAC. However, it is using its 527 to influence the nomination of a candidate for federal office, which should make its 527 covered by BCRA just like its PAC]