GOP 527 Must Show Us The Money

by Josh Gerstein
Thu, 11 Sep 2008 at 12:53 PM

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A new Republican-run 527 group planning advertising that could bolster the presidential campaign of Senator McCain of Arizona and undercut that of Senator Obama of Illinois, Leadership for America's Future, plans to disclose its donors publicly, contrary to initial indications.

The existence of the new outfit, Leadership for America's Future, was disclosed by The New York Sun on Monday. At that time, the group's Web site said gifts were "not....reportable under federal law."
In fact, so-called 527 groups, named for the section of the tax code under which they are organized, are required to file regular reports with the Internal Revenue Service and to list donors. The site was recently updated to reflect that reality. "While LFAF is not required to report contributions to the Federal Election Commission, we are required to report contributions over $200 to the IRS," a new statement on the site says.
The preferred vehicle for anonymous contributions aimed at influencing the political debate remains the 501(c)(4) group, which has to report its finances to the IRS, but not its donors. However, the primary purpose of such a group cannot be political. Most lawyers advise such groups to spend at least half their money on grassroots-type issue lobbying. That means people wanting to start up such a group to run political ads have to carry what is a tax or overhead of sorts of 100% on top of what they want to spend on the ads.
It's also worth noting that any group which runs ads mentioning a federal candidate during certain pre-election timeframes has to report that fact to the Federal Election Commission and has to report major donors if they gave specifically for the ad campaign (a standard which seems to me to have a great deal of wiggle room). As it stands now, Leadership for America's Future doesn't mention Messrs. McCain or Obama in the one ad-like video on the group's site, so it would appear it's going to try to avoid triggering those reporting requirements.

I should have caught the new 527's Web goof on the first pass. Sorry about that.

Related Topics: General Election

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