Authors:
Nan Gao
Dylan Marks
Andrew Peterson
Chester Shiu

CS 201
Stanford University

527's

 What are 527's? | Who Donates? | Where does the money go?
Government Regulation | Ethics

Regulation

“Thanks to 527s, we will be outspent by the Democrats. MoveOn.org is a huge threat and has hurt the president. Every action makes a difference.” The current conservative government desires changes or a complete ban of 527's after feeling the impact from the opposing side.

Currently the only requirement for 527 organizations is to not advocate federal candidates during elections, but there are no regulations for issues they are advocating. Essentially then wealthy sponsors can invest millions of dollars into an issue and sway the votes so that their position will win.

"An organization comes up with a name -- Citizens for Fair Government or another name -- and they hide, and you don't know who is behind them," Mr. Shaw said. "We've been ravaged with problems as a result of these organizations."

Many current politicans recognize this weakness and have attempted some temporary solutions. One such solution is a bill that exposes all who donate to a 527. This way when they see an ad in their district they know who paid for it to be there. In addition the bill increases the excise tax for all unreported contributions to 30 percent. This bill might be a good solution for those who do hide behind 527s and their websites.

Because of the enormous amount of slander commercials supported by 527s the government wishes to ban 527s altogether. A solution would be to make stricter regulations on having an effect on elections that involve federal candidates.

In 2005 Senator John McCain and Senator Russell Feingold introduced the 527 Reform Act that requires 527s to register as political committees with the Federal Election Commission (FEC) and subjects their fundraising to current campaign finance laws. The proposed legislation will require that if a 527’s sole purpose is to influence a federal election it must be funded with “hard money” donations subject to the limits and reporting requirements of the Bipartisan Campaign Reform Act. If the Bill passes, it would eliminate the main problems associated with candidate slandering and wealthy contributors affecting the election through the 527s.