Top 527 Political Groups Collect Nearly $108 Million in Soft Money to Influence Congressional Elections

Public Citizen Launches New Web Site to Allow Press, Public to Track Donors to 527 Groups

WASHINGTON, D.C. - Leading "527" political organizations seeking to influence the November elections have raised nearly $108 million in soft money during the 2002 election cycle so far, according to a new analysis by Public Citizen. The money is being used to finance sham "issue ads," get-out-the-vote efforts and direct mail operations.

Public Citizen's study examined 527 groups' third quarter filings, which cover July 1 to September 30. Public Citizen is tracking the activities of 170 of the largest 527 groups, but because third quarter reports are available for only 74 organizations, actual totals for this reporting period and the 2002 cycle will be considerably higher. The reports were collected directly from 527 groups, as they are not currently available through the online IRS disclosure system.

Searches can be refined to include the type of contributor (individual, corporation, union, PAC or foundation) and type of 527 group (politician 527 or non-politician 527). The database comprises more than $155 million in contributions. Public Citizen created it by obtaining reports from the IRS and the groups, and entering information about contributors who gave more than $5,000 to any of the 170 largest 527 groups active in federal elections. Although the reports are posted on the IRS Web site, the site is not similarly searchable.

The third quarter disclosure reports show large quantities of money raised by 527 groups connected with members of Congress and a boost in activity by both liberal and conservative interest groups. The reports reveal that the 25 largest groups active in federal elections collected $19.9 million during this most recent reporting period. Named after the section of Internal Revenue Code they are regulated by, 527 groups can accept unlimited soft money contributions from corporations, unions and individuals.

"We are seeing 527 groups rushing to raise millions of dollars in soft money as the election approaches, with the goal of influencing key races across the country," said Joan Claybrook, president of Public Citizen. "With the help of six-figure checks, these shadowy organizations are airing sham issue ads, pumping out direct mail and staffing phone banks to influence the upcoming elections."

Findings from the report include:

§ The 170 leading 527 groups identified by Public Citizen have raised $107.7 million since January 2001. (There is no way to compare these figures to the last election cycle because 527 groups were not required to disclose their contributions and expenditures prior to July 2000.)

§ Twenty-five of the top 527 groups have raised a total of at least $76 million and spent $76.4 million during the 2002 election cycle. (Third quarter reports are unavailable for six of these groups.) Included in the list of the top 527 groups are 15 Democratic/liberal leaning and 10 Republican/conservative leaning organizations.

§ Since disclosure of 527 groups' finances was first required two years ago, the largest groups active in federal elections that have been identified by Public Citizen have taken in $187.8 million and spent $213.8 million.

§ The biggest donors during the third quarter include the Pharmaceutical Research and Manufacturers of America (PhRMA) ($315,000); Republican Leadership Coalition ($300,000), which tries to bring Hispanic voters into the GOP; Hollywood producer Steve Bing ($300,000); investor S. Robert Levine ($250,000) Democratic National Committee ($200,000); philanthropist and investor John Hunting ($150,000); Democratic Senatorial Campaign Committee ($124,600); and financial holding company manager Ian M. Cumming ($105,000).

§ The brand-name drug industry, which fended off legislation requiring drug coverage to be offered through Medicare and giving consumers quicker access to lower-priced generic drugs, has given $2.6 million to 527 groups during the 2002 cycle, $545,000 in this last quarter. (In comparison, the brand-name drug industry has contributed $9.3 million in soft money to the national parties during the 2002 cycle.) PhRMA, the drug industry's trade association, gave $100,000 each to Sen. Rick Santorum's (R-Pa.) America's Foundation and Sen. Don Nickles' (R-Okla.) Republican Majority Fund, both 527 groups. House Speaker Dennis Hastert's (R-Ill.) KOMPAC received $50,000 from PhRMA.

"These contributions are just the tip of the iceberg," said Frank Clemente, director of Public Citizen's Congress Watch. "When soft money contributions to political parties are banned after November's elections, donations to 527 groups will rapidly accelerate. It will be a whole new world for special interests and the politicians they are aiding or attacking."

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