Stateline Story

527s Target State Races with Money, Professionals

Record spending by nonprofit "527" groups in 2004 turned some state elections into high-stakes contests financed by national corporations and labor groups and polished by Washington, D.C., political professionals, campaign finance watchdogs say.

While 527s such as Swift Boat Veterans for Truth and MoveOn.org captured the national limelight, similar groups targeted state elections with unprecedented out-of-state money and professional campaign strategies, said Aron Pilhofer, a researcher at the nonpartisan Center for Public Integrity.

Because 527s operate in a gray zone not specifically regulated by state or federal elections rules, they are able to move money strategically from state to state or to a number of candidates within a state with little accountability, the Center reported in its Dec. 16 analysis of 527s' spending and activities during the 2004 elections.

The 527s, named for the section of the U.S. tax code that governs their operations, have flourished since the 2002 McCain-Feingold campaign finance laws capped contributions to federal candidates and parties. Large corporate and labor donations that used to go directly to the parties now are flowing through 527s, which use "soft money" raised and supposedly spent independently of the parties or candidates for "voter education" or "issue advocacy," but often used to bash an opponent.

Of more than 300 tax-exempt 527 groups nationally, 63 actively helped elect Democratic and Republican governors, state legislators and other state officials. Those groups raised and spent $94 million in 2004 -- more than double the $45.2 million they raised and spent in the 2002 elections.

Leading those groups was the Republican Governors Association (RGA), which doled out $33.6 million for this year's 11 gubernatorial races, making it the fifth biggest spender among all 527s in this election cycle, which includes 2003. In 2002, when 36 states elected governors, the group spent just $6.7 million.

For this election, the RGA funneled $2.6 million into the Missouri governor's race to help Republican Secretary of State Matt Blunt defeat Democratic State Auditor Claire McCaskill. The RGA also gave nearly $2.4 million to Indiana's GOP candidate Mitch Daniels, who defeated Gov. Joe Kernan (D), and spent $1.4 million to help gubernatorial candidate Dino Rossi in Washington state. Rossi leads Democratic candidate Christine Gregoire by just 121 votes as a second recount of the state's ballots is under way.

The Democratic Governors Association (DGA) spent $23.6 million for the 2004 election cycle and is sixth among 527s nationwide. In 2002, the DGA spent $12.6 million. The DGA also gave heavily to losing gubernatorial candidates in Indiana, Missouri and Washington.

But they were successful in New Hampshire, where they donated $835,000 to help Democrat John Lynch upset one-term Gov. Craig Benson (R), and in Montana, where they contributed $671,600 to help Brian Schweitzer defeat Secretary of State Bob Brown (R) for governor.

The Democratic Legislative Campaign Committee (DLCC) and Republican State Leadership Committee (RSLC), 527s formed to help elect state legislators, spent a combined $17 million for the 2004 elections, far outpacing the nearly $7.5 million for the 2002 elections.

The RSLC also assists candidates for attorney general and lieutenant governor. The group spent nearly $1.3 million to help Rob McKenna defeat his Democratic rival in the Washington attorney general's race and donated $480,000 to help Tom Corbett win the race for Pennsylvania's attorney general.

Besides infusing state campaigns with big bucks, the 527s that focused on state-level candidates professionalized the campaigns with polling, focus groups and political stratagem usually reserved for national or federal candidates, said David Magleby, professor of political science at Brigham Young University.

That point was underscored by a recent DLCC meeting in Washington, D.C., where state legislators praised the group for Election 2004 statehouse gains. Democrats wiped out a 64-seat advantage that Republicans earned in nationwide legislative races in 2002 and currently lead by 2 seats. They also shifted control in eight legislative chambers and moved the Iowa Senate to a tie. Formed in 1994 after Republicans picked up 504 statehouse seats, the DLCC researched opponents' votes for more than 235 legislative candidates in 13 chambers and conducted 177 polls.

Thanks to help from the DLCC, Democrats captured control of both Colorado legislative chambers for the first time in 44 years, said Colorado Senate President Joan Fitz-Gerald (D), who was just elected DLCC chairwoman. "The DLCC polling told us where to go and what message to carry," she told colleagues.

Magleby said the professional campaigning by 527s will grow in the future. He predicted the groups will expand their political battles to ballot initiatives and legislation at both the state and federal level.