NONPROFIT INTEREST GROUPS’
ELECTION ACTIVITIES AND FEDERAL
CAMPAIGN FINANCE POLICY:
A WORKING PAPER
THE CAMPAIGN FINANCE
INSTITUTE
JULY 2006
NON-PROFIT INTEREST GROUPS’
ELECTION ACTIVITIES AND FEDERAL
CAMPAIGN FINANCE POLICY
A CFI Working Paper by
Stephen R. Weissman
and
Kara D. Ryan
We gratefully acknowledge valuable assistance in our analysis of Internal Revenue Service Form
990 information from Betsy Reid, formerly of the Urban Institute. We also benefited from
database creation and analysis by CFI Systems Administrator Brendan Glavin, and editorial
comments by CFI Executive Director Michael J. Malbin and by Elizabeth Boris, Director of the
Urban Institute’s Center on Nonprofits and Philanthropy.
The Campaign Finance Institute is a non-partisan, non-profit institute, affiliated with The George
Washington University, that conducts objective research and education, empanels task forces and
makes recommendations for policy change in the field of campaign finance. Statements of the
Campaign Finance Institute and its Task Forces do not necessarily reflect the views of CFI’s
Trustees or financial supporters. For further information, visit the CFI web site at
www.CampaignFinanceInstitute.org.
For Additional Copies
The Campaign Finance Institute
1990 M St. NW, Suite 380
Washington, DC 20036
202-969-8890
www.CampaignFinanceInstitute.org
Contents
Introduction and Main Findings …………...……..………………….
1
PACS and 527s: Cumulative Vehicles of Interest Group Attempts
to Influence Elections ....………………………………………..……..
8
II.
The Groups’ 501(c) Networks: Their Nature and Importance..…….
12
III.
What the Groups’ 501(c) Advocacy Organizations’ Did to Try to
Influence Federal Elections…………………………………………....
14
501(c) Groups Without 527s: NRA, NRLC, Americans for Job
Security, Chamber of Commerce……………………………………..
Conservative Groups………………………………………………...
NRA……………………………………………………………..
NRLC……………………………………………………………
Business Associations……………………………………………….
17
17
17
18
19
501(c) Groups With 527s: AFSCME, SEIU, Planned Parenthood
Action Fund, MoveOn.org and Sierra Club…..…………………….
Labor Unions………………………………………………………..
Liberal Groups………………………………………………………
Planned Parenthood……………………………………………...
Sierra Club………………………………………………………
MoveOn.Org…………………………………………………….
22
22
23
23
24
25
The Groups’ Individual Donors Also Attempted to Influence
Elections With Combined “Hard” and “Soft” Money Partisan
Contributions…………………………………………………………...
27
Policy Implications…………………….……………………………….
31
Endnotes ………………………………………..………………………
34
Appendices A-D………………………………………………………...
39
I.
IV.
V.
VI.
VII.
Tables and Figures
U.S. Chamber of Commerce’s Network of Commonly-Managed
Policy-Oriented Organizations: Organizational Expenses and
Indicators of Election Involvement in 2003-2004 By Entity…………..
4
Twelve Sample Interest Groups' Commonly-Managed Organizations
Involved in Elections (2000, 2002 or 2004 Cycles …………………...
5
Spending by 12 Sample Nonprofit Groups' Federal PACs and Federal
527s: 2000, 2002 and 2004 Election Cycles…………………………..
9
Federal Election Campaign Spending by 501(c) Advocacy
Organizations of 11 Sample Nonprofit Organizations for the 2000,
2002 or 2004 Election Cycles.................................................................
15
Individual Donors to Sample Interest Groups' 527s and Their
Contributions to Federal Political Committees (Candidates, Parties,
PACs) for the 2004 Cycle ……………………………………………..
28
Individual Donors to Groups' 527s and Their Contributions to Federal
Candidates and Parties for the 2004 Cycle, by Party Affiliation………
30
Appendix A
Types of Nonprofit Organizations in Federal Elections..……………...
39
Appendix B
Public Policy-Related Program Achievements for 501(c)
Organizations of 12 Sample Interest Groups…………………………..
40
Figure 1
Table 1
Table 2
Table 3
Table 4
Table 4a
Appendix C
Appendix D
Individual Donors to Sample Interest Groups' 527s and Their
Contributions to Federal Political Committees (Candidates, Parties,
PACs) for the 2002 Cycle and ………………………………………...
Individual Donors to Groups' 527s and Their Contributions to Federal
Candidates and Parties for the 2002 Cycle, by Party
Affiliation…………………………………….......................................
Data Sources…………………………………………………………...
48
49
50
Introduction and Main Findings
In 2002, Congress enacted the first major campaign finance reforms since the mid-1970s.
The “McCain-Feingold” legislation curbed unlimited soft money contributions to
national and state political parties. It also banned corporation and labor union treasury
financing of TV and radio ads that referred to federal candidates in their constituencies
shortly before elections.
No sooner had the new law gone into effect than an acrimonious debate erupted over its
alleged circumvention by so-called Section 527 political organizations. The primary
purpose of these tax-exempt entities (which derive their common name from Section 527
of the Internal Revenue Code, where they are defined) is to influence elections and
appointments to public and party offices. But unlike candidate, party and “political
action” (PAC) committees, other 527s have escaped significant federal and state
restrictions on the size and sources of their donations. (They have been subjected to
similar financial disclosure requirements since 2000.) These 527s have been treated
separately because they do not make contributions to candidates or parties or expressly
advocate the election or defeat of candidates (e.g. by saying “Vote for” or “Vote
against”). Instead they employ more subtle communications to “promote, attack, support
or oppose” candidates.1
Over the last two years, the Federal Election Commission (FEC), U.S. Courts, Congress,
and many State Governments have wrestled with the question of whether some
contribution restrictions should be extended to 527 organizations. One central issue in
this debate is whether 527s’ influence over elections might pose a threat of “corruption”
(or its “appearance”) over elected officials -- which has been the one constitutionally
permissible justification for contribution limits since the Supreme Court’s 1976 Buckley
v. Valeo decision -- or whether 527s that are legally independent from parties and
candidates are adequately insulated from this concern, making contribution regulations
unnecessary or undesirable.
As the 527 debate has heated up, the political role of other tax-exempt organizations has
come under heightened scrutiny. Section 501(c)(4) social welfare organizations, (c)(5)
labor unions and (c)(6) business leagues may participate in partisan campaign activities
so long as these activities are both related and subordinate to their primary missions.
Since many of the permitted activities are similar to those undertaken by 527s, some
analysts are concerned that regulation of 527s’ contributions would push their donors
toward these 501(c) “advocacy” organizations.2 The 501(c)s have the disadvantage of
being liable to taxation on their political expenditures -- or investment income, whichever
is lower -- at the maximum corporate 35% rate; but unlike the 527s, 501(c)s do not have
to publicly disclose their contributions and detailed political expenditures. Some
opponents of 527 regulation warn that a number of 501(c) advocacy organizations are
already doing what 527s do.3
1
In addition, many nonprofit advocacy group leaders worry that regulation of 527s will
lead ineluctably toward similar constraints on merely alleged election activities of 501(c)
organizations, undermining the latter’s democratic role on promoting broad discussion of
public issues and fostering civic participation. (One authority writes, “Americans have a
longstanding tradition of association and expression of political issues. Today, they
largely organize their voices through a variety of nonprofit organizations.”)4 Many 501(c)
advocacy groups depend, in part, on large corporate, foundation and individual
donations.5 For example, Sierra Club Executive Director Carl Pope has stated, “If
independent organizations who wish to criticize politicians cannot use large contributions
to do so, most of them will be effectively silenced.”6 It would be difficult, many argue,
for outside regulators of advocacy groups to distinguish between their “issue advocacy”
and “grassroots lobbying” on the one hand and their election-influencing communications
on the other. Moreover, disclosure of contributions might cause many donors to withdraw
their support rather than be publicly identified as patrons of controversial causes.7 These
concerns have been exacerbated by the Internal Revenue Service’s (IRS) ongoing
investigation of alleged partisan campaign intervention in the 2004 election by more than
100 501(c)(3) religious and educational organizations, groups that are legally prohibited
from engaging in any such activities.8
These issues indicate the need for empirical investigation. What is the actual relationship
of 501(c)s to 527s and how might this condition future developments? Is it feasible in
practice to distinguish between election-oriented and other activities of advocacy groups?
Would nonprofit interest groups be politically disabled by restricting donations to them
for election activities?
Thus far, much of the discussion concerning 527s has focused on a few large
organizations and their relationships with individuals associated with the major political
parties. Several of these groups folded their tents after a single election. But what about
the rest of the 527s, especially the more enduring breed that is typically associated with
major interest groups?
In order to inform the ongoing debate about nonprofits and campaign finance policy, CFI,
with assistance and advice from the Urban Institute Center on Nonprofits and
Philanthropy, embarked upon a pilot study of 12 major nonprofit interest groups that
were heavily involved in influencing federal elections during the last 3 election cycles
(2000 through 2004). The groups selected: (1) all made significant political expenditures
(essentially 527 and/or PAC disbursements); (2) had some degree of continuity across
election cycles (groups no longer active in the 2006 election cycle, such as Americans
Coming Together, the Media Fund or Swift Boat Veterans and Prisoners of War for Truth
were excluded9); (3) half were Republican-oriented and half Democratic-oriented; and (4)
the groups represented a variety of interests (including business associations, labor
unions, issue-based and party-support/influence groups).
2
The sample interest groups included:
American Federation of State, County and Municipal Employees (AFSCME)
Americans for Job Security
Chamber of Commerce of the U.S.A.
Club for Growth
MoveOn.org
National Rifle Association (NRA)
National Right to Life Committee (NRLC)
New Democrat Network (NDN)
Planned Parenthood
Progress for America
Service Employees International Union (SEIU)
Sierra Club
This Working Paper concludes that the debate over 527s and 501(c) advocacy groups in
elections has failed to incorporate a real world understanding of the specific ways in
which various nonprofit interest groups -- and their large donors -- engage in elections
and relate to campaigns. Typically, Section 527 and 501(c) advocacy organizations and
federal PACs are discussed as wholly separate organizations, governed by separate, more
or less restrictive, legal regimes. (For a profile of each type of organization and their
activities, see Appendix A). Thus the question is usually posed: “Is this particular legal
entity conducting itself in a way that justifies a further extension of the public disclosure
or contribution limits regime?” In society, however, these organizations often appear as
commonly-managed entities within a single interest group’s public policy network. They
work together to accomplish the group’s overarching objectives, including its election
ones. As a result, it is unrealistic to assess the impact of a single entity’s (and its donors’)
conduct, how it may be perceived by a candidate or party, and how it might be affected
by different campaign policies, without reference to the behavior of the group as a whole.
Figure 1 illustrates this point by portraying the commonly-managed tax-exempt
organizations in the U.S. Chamber of Commerce’s Policy Network in 2003-04. It shows
each organization’s total expenditures and indicates which ones had some level of
electoral involvement. Of the 8 Chamber organizations, 4 were involved to some extent
in elections, 2 mainly at the federal level and 2 mainly at the state level. We have also
included an outside group, a federal 527 that was founded and almost entirely funded by
the Chamber. While the parent Chamber’s major lobbying function and the National
Chamber Foundation’s policy research focus are not indicated by their names, the other
organizations’ names (such as the Institute for Legal Reform) convey their niches in the
Chamber’s overall public policy effort. Election activities comprise part of this broad
agenda. At the federal level, the PAC, the parent Chamber, and the Chamber-aided 527
(and their donors) were all active in the 2004 election. It is unlikely that candidates and
parties who were targets of these efforts saw them as completely separate initiatives.
3
Figure 1
U.S. Chamber of Commerce’s Network of Commonly Managed Policy-Oriented Organizations:*
Organizational Expenses and Indicators of Election Involvement in 2003-2004 By Entity
Coalition for
Reform
501 (c)(6)
$3,941,006
Chamber PAC
$187,504
Center for Corporate
Citizenship
501 (c)(3)
$1,761,854
National
Chamber
Foundation
501 (c)(3)
$11,254,002
US Chamber of Commerce
501 (c)(6)
$171,715,053
$3,000,000
The November
Fund (527)
$3,075,978
National Mass
Action Defense
Reform Council
501 (c)(6)
$1,703,998
Institute for Legal
Reform
501 (c)(6)
$66,742,713
National
Chamber
Litigation Center
501 (c)(6)
$2,305,855
= Some involvement in
mainly federal elections
= Some involvement in
mainly state elections
= No indicated election
activity
*Includes organizations that reported expenses to the IRS in 2003 and 2004 and that received more than half of their funding from non-government sources.
Source: Compiled from sources listed in “Data Sources” section, Appendix D.
4
When it comes to elections, then, one has to take into account all of an interest group’s
cumulative and coordinated election activities, not just those of a particular legal entity,
to fully appreciate the consequences of campaign finance policies. Thus Table 1 shows,
for each of our 12 sample groups, which of its commonly-managed organizations are
involved in federal elections.
Table 1: Twelve Sample Interest Groups' Commonly-Managed Organizations Involved in Elections
(2000, 2002 or 2004 Cycles)
Interest Group
(c)(4)
(c)(5)
(c)(6)
X
AFSCME
Americans for Job Security
X
Chamber of Commerce of the USA
X (3)*
Club for Growth
PAC
527
X
X
X
X
X
X
MoveOn.org
X
X
National Rifle Association
X
X
National Right to Life Committee
Inc.
X
X
New Democrat Network
Planned Parenthood
X
X
X
X
X
X
Progress for America
X
SEIU
Sierra Club
X
X
X
X
X
*Chamber of Commerce has 3 (c)(6) organizations involved in federal and state elections.
Source: Compiled from sources listed in "Data Sources" section, Appendix D.
Our study found that:
•
While 10 of the 12 sample groups had federal PACs, and 8 had federal 527s, 7
interest groups used both vehicles during at least one of the last 3 election cycles.
5
By combining arms, the latter groups increased their financing of elections.
Furthermore, their activities were likely to be perceived by candidates and others
as a cumulative effort. Such multifaceted action, funded by “hard money” (from
limited contributions) and “soft money” (from unlimited ones), raises the separate
question of whether the effort poses a threat of corruption or its appearance.
•
PACs and 527s in federal elections contributed to the groups’ integrated public
policy advocacy missions, which were largely carried out by their 501(c)(4),
(c)(5) and (c)(6) organizations. In 9 of 12 groups, these 501(c) advocacy
organizations also put resources into the groups’ integrated federal election
programs. Again, this enabled groups to expand their efforts to influence elections
and contributed to a perceived seamlessness in groups’ diverse political
operations.
•
Four of the 6 Republican-oriented groups lacked 527s but used their 501(c)(4) and
(c)(6) organizations largely to carry out 527-type activities. Five of the 6
Democratic-oriented groups had 527s and deployed their 501(c)(4)s and (c)(5)s to
send political communications to members, supplement 527 operations, or
support grassroots lobbying and issue campaigns containing elements of partisan
struggle.
•
The groups themselves generally distinguished, in public statements, their
election-oriented communications from their “issue advocacy” ones. Two groups
indicated that the IRS’s 2004 precedential guidance defining electoral advocacy
communications was workable and generated increased group reporting about
such spending. To the extent that the two spheres of electoral and non-electoral
activity can be differentiated, concern is reduced that some potential campaign
finance measures would necessarily interfere with funding for issue advocacy and
grassroots lobbying.
•
If 527 donations were limited, most of the groups would not have great difficulty
transferring their current level of 527 activities into their less-regulated 501(c)
advocacy entities, although the latter set of political expenditures could then
become taxable at the 35% rate.
•
Large individual donors to 6 of the interest groups’ 527s in the 2004 election
cycle also accumulated financial influence in elections through combined
donations to overwhelmingly partisan group 527s and similarly partisan federal
candidates, PACs and parties. As with the groups themselves, large “hard” and
“soft” money partisan donations had the appearance of a unified campaign
financing strategy combining contributions and spending. Combining “hard” and
“soft” money also permitted many of these donors to aid partisan favorites beyond
the maxima for aggregate “hard money” contributions.
•
Serious gaps exist in the public disclosure framework for nonprofits in elections.
Most important, the IRS’s annual Form 990 and instructions for 501(c)s do not
6
adequately define “political expenditures,” and the Agency utilizes a “facts and
circumstances” standard that, in its current form, is excessively vague. What is
more, the Agency has not issued adequate precedential guidance on the subject
nor has it effectively monitored the 501(c)s’ reporting. Also, federal campaign
finance law requiring corporate and membership organization reporting on
internal election communications costs is seriously outmoded. It ignores the main
thrust of contemporary political communications, which is to promote or oppose
candidates without explicitly using “magic words” of express advocacy like “Vote
for” or “Vote against.”
We based our analysis on an exceptionally wide variety of quantitative and qualitative
data. Of greatest importance were data from: IRS Form 990 annual information returns
filed by 501(c) organizations, FEC financial and contributions data, University of
Wisconsin Political Advertising Project and Center for the Study of Elections and
Democracy databases on political ads and on direct mail in federal races, Federal court
depositions concerning the Bipartisan Campaign Reform Act of 2002, public statements
and documents from all 12 groups and interviews with representatives of five of them. A
fuller discussion of data sources appears in Appendix D.
7
I. PACS and 527s: Cumulative Vehicles of Interest Group
Attempts to Influence Elections
PACs and so-called “527s” were the main publicly disclosed organizational vehicles
through which our sample groups tried to influence federal elections during the last three
election cycles. Under federal campaign finance law, federal PACs may donate up to
$5,000 to a candidate per election, including in-kind contributions such as providing
campaign staff and hosting fundraising or “meet and greet” gatherings. PACs may also
serve as intermediaries for individual contributions to candidates, a process known as
“bundling,” and PACs may make “independent expenditures” expressly advocating votes
for or against candidates. For such activities, PACs may not receive any contributions
from corporations and unions and not more than $5,000 a year from any individual. In
practice, most corporations and unions choose to have “connected” PACs. These may
raise money only from the “restricted class” of administrative employees, shareholders or
members (and their families), but benefit from subsidies from their parent organizations
for administrative and fundraising expenses.
Section 527 of the Internal Revenue Code technically encompasses candidate
committees, party committees and PACs and other independent organizations that
attempt to influence elections or appointments to public and party offices. Recently,
however, the term has been used to refer only to the latter kind of 527s. These entities
make only non-express advocacy communications promoting or opposing candidates.
Because they do not conduct express advocacy or contribute to candidates and parties,
they are free from significant limitations on the sources or amounts of their
contributions.10
Table 2 details the sample groups’ federal PAC and 527 expenditures during the 2000,
2002 and 2004 election cycles.11 Ten of the twelve groups had PACs and eight had 527s.
Policies toward PACs and 527s are usually discussed separately, but Table 1 shows that 7
of the 12 sample groups utilized both mechanisms during at least one cycle, with 6 of
them doing so in 2004. Of the 5 remaining groups, 4 used only one of these vehicles
during the three cycles and 1, Americans for Job Security, employed neither.
Interestingly, these 5 groups were all Republican-oriented, while all the combined arms
groups, except Club for Growth, were Democratic-oriented.
8
Table 2:
Spending by 12 Sample Nonprofit Groups' Federal PACs and Federal 527s: 2000*, 2002 and 2004
Election Cycles
AFSCME
Americans
for
Job Security
Chamber of
Commerce
of the U.S.A.
Club for
Growth
MoveOn.org
Civic Action
National
Rifle
Association
National
Right to Life
Committee
$6,351,929
8,487,308
14,056,957
N/A
N/A
N/A
$382,867
225,542
187,504
$119,370
390,295
1,938,916
$2,281,665
1,014,452
30,043,755
$16,821,447
10,933,902
12,772,498
$3,638,243
2,215,203
3,854,215
0
0
0
N/A
N/A
N/A
0
0
0
1,319,810
2,181,420
5,305,788
437,400
162,521
932,116
0
4,950
0
0
0
0
8,753,750
19,375,052
22,332,587
N/A
N/A
N/A
N/A
N/A
N/A
872,788
4,905,651
9,629,742
N/A
N/A
21,346,380
N/A
N/A
N/A
N/A
N/A
N/A
15,105,679
27,862,360
36,389,544
N/A
N/A
N/A
N/A
N/A
N/A
2,311,968
7,477,366
16,874,446
2,719,065
1,176,973
52,322,251
16,821,447
10,938,852
12,772,498
3,638,243
2,215,203
3,854,215
PAC
Federal
Disbursements
2000
2002
2004
Intermediary for
Contributions
2000
2002
2004
527
Expenditures
2000*
2002
2004
Total (PAC and 527)
2000*
2002
2004
*The 527 totals for the 2000 cycle represent partial data. Reporting requirements were implemented only in the last six months of the two-year cycle.
Source: Compiled from FEC data; 527 disclosure reports filed with the IRS (2004 cycle); and 527 data provided by the Center for Public Integrity (2000 & 2002 cycles).
9
Table 2 Continued:
Spending by 12 Sample Nonprofit Groups' Federal PACs and Federal 527s: 2000*, 2002 and 2004
Election Cycles
New Democrat
Network
Planned
Parenthood
Action Fund
Progress for
America
SEIU
Sierra Club
2000
2002
2004
$1,368,658
836,760
0
$914,502
709,955
857,276
N/A
N/A
N/A
$4,802,815
7,101,434
12,461,623
$938,034
828,000
882,525
2000
2002
2004
131,786
998,069
0
0
0
0
N/A
N/A
N/A
0
0
0
0
0
0
1,147,403
3,662,273
12,524,063
7,296,076
1,010,869
595,288
N/A
N/A
35,631,378
5,173,797
5,505,063
46,726,713
7,206,159
3,930,028
6,261,811
2,647,847
5,497,102
12,524,063
8,210,578
1,720,824
1,452,564
N/A
N/A
35,631,378
9,976,612
12,606,497
59,188,336
8,144,193
4,758,028
7,144,336
PAC
Federal
Disbursements
Intermediary for
Contributions
527
Expenditures
2000*
2002
2004
Total (PAC and 527)
2000*
2002
2004
*The 527 totals for the 2000 cycle represent partial data. Reporting requirements were implemented only in the last six months of the two-year cycle.
Source: Compiled from FEC data; 527 disclosure reports filed with the IRS (2004 cycle); and 527 data provided by the Center for Public Integrity (2000 & 2002 cycles).
10
As we shall see presently, Republican-oriented groups also believe in combined arms; it
is just that they generally prefer to utilize a different vehicle -- 501(c)(4) or 501(c)(6)
organizations -- to perform 527-type activities. But the point here is that when an interest
group complements its limited contribution/PAC effort with an unlimited
contribution/527 one, its financial influence in federal elections increases. These groups
are overwhelmingly partisan in their electoral operations, benefiting either Republicans
or Democrats. Therefore, their combined election activities -- even when they do not
benefit the same candidate but a party generally -- are likely be perceived by candidates
and the public as a cumulative effort. In fact, that is the way the groups themselves
perceive their efforts. Interest group actors in the real political world (as opposed to the
world of legal categories) do not describe as fundamental the differences between their
groups’ candidate or party contributions, independent expenditures, or non express
advocacy spending. These findings lead to a separate, albeit related, policy question:
Does increased financial influence in elections by the group, and its donors, lead to
“undue influence” (or its appearance) over elected representatives?
11
II. The Groups’ 501(c) Networks:
Their Nature and Importance
PACs and 527s represent only two elements of these interest groups’ broader
organizational arrays. Of the 12 groups, only NDN lacked at least one 501(c)(4), (c)(5) or
(c)(6) advocacy organization within a commonly-managed organizational network.
Furthermore, PAC/527 election activities were usually overshadowed by 501(c) advocacy
ones. Using a rough measure of this relationship -- the amount spent by the group’s main
“advocacy” organization versus that expended by its PAC and/or 527 during the 2004
election cycle -- we found that only 4 groups (Club for Growth, MoveOn.org, NDN and
Progress for America) spent more through their electoral entities than through their main
advocacy organizations.
Appendix B presents each interest group’s network of commonly-managed 501(c)
organizations engaged in public policy in 2004 (or the latest year for which information is
available). Public policy engagement was determined by examining each organization’s
largest “program achievements” as reported to the IRS on Form 990. As Appendix B
shows, each group usually possesses multiple entities, enabling it to pursue an integrated
policy agenda. As the various program descriptions indicate, this agenda may include
research, public education, advocacy, coalition-building, grassroots and other lobbying,
litigation, and “political” or “partisan” activities. Seen in context, partisan campaign
intervention, whether practiced by a PAC, 527 or 501(c) advocacy organization, is one
weapon in the group’s overall struggle for political and policy influence. Wayne
LaPierre, the Executive Vice-President of the NRA, has expressed it this way: “[O]ur
interests go way beyond politics. I mean our interests deal with the program aspects of
the Second Amendment, they deal with – the atmosphere in the air, they deal with
elections.”12
What is not clear from these data is the extent to which the groups’ 501(c)s themselves
participate in political campaigns to further their broad policy purposes. Until 2003, only
one of the many relevant organizations, Planned Parenthood Action Fund, regularly
reported “political expenditures” to the IRS in respone to Form 990’s Question 81a. The
NRA reported such expenses only for 1999 and 2000. Beginning in 2002, MoveOn.org
reported annual political expenditures, and the Chamber of Commerce and its Institute
for Legal Reform did so for 2004. As we shall see, it is reasonably clear that some
organizations reporting such spending are accounting for only a portion of their partisan
federal activity, while others are revealing none of it.
There are a number of reasons for this serious public disclosure gap. Many can be traced
directly to the IRS. Form 990 instructions are brief and general, referring only to the
broad definition of political activity in Section 527 of the Internal Revenue Code. As a
number of experts have noted, IRS precedential guidance concerning what constitutes
501(c) political campaign intervention is relatively sparse and sometimes out of date,
although there has been some recent improvement.13 This complicates the difficulty
organizations sometimes have in applying the IRS’s standard methodology of balancing
the “facts and circumstances” of each case before arriving at a determination. Even the
senior legal counsel for Planned Parenthood Action Fund, the only 501(c) organization in
12
our sample to consistently report political expenditures, said she considered the “facts
and circumstances” standard “vague.”14 It was not until 2004 that the IRS finally issued
fairly comprehensive precedential guidance illustrating what kinds of “public advocacy
communications” would be considered Section 527 election activities.15 However, it is
uncertain whether it is being widely utilized by political actors. Two years after this
guidance was released, the Executive Director of Americans for Job Security seemed
unaware of it during an interview, even though it is clearly of major significance to an
organization, such as AJS, that has been one of the nation’s largest purchasers of
candidate specific television advertising over the past three election cycles.16 The IRS has
not issued updated precedential guidance to its 25-year-old, limited material on “voter
guides,” despite the development of video and other imagery and new “targeting”
techniques.17 Beyond the poor instructions and inadequate guidance, we later discuss
evidence that the IRS is not effectively monitoring responses to the political expenditures
question.
Also, the IRS does not require even minimal disclosure of specific funding sources for
political expenditures. Question 1a of Form 990, inquiring into “direct public support” for
the 501(c), fails to provide any information at all about the amounts provided by different
kinds of non-governmental donors (such as corporations, unions, individuals, and
foundations).
The IRS’s performance is not the only cause of weak disclosure of 501(c) political
activities. Under federal campaign finance law, corporations and unions are exempted
from spending restrictions to permit them to subsidize “connected” PACs’ administrative
and fundraising expenses. In a similar bow to associational life, corporations and unions
are not inhibited from making internal political communications to their executive or
administrative personnel, or members, and their families. (IRS regulations incorporate
these 2 exceptions by not taxing these political expenditures by 501(c)s.) Yet campaign
finance law has long recognized a public interest in disclosure of the cost of internal
campaign communications by corporations and membership organizations. However, it
covers only the costs of $2,000+ communications that are “primarily” devoted to express
advocacy. What is left out is a staple of modern campaigns: communications that
primarily promote or attack candidates with or without additional express advocacy.
Finally, Federal Communications Commission (FCC) regulations require disclosure of
the “true identity” of corporations or persons sponsoring political ads. Yet, in practice,
sponsors and broadcasters are not required to distinguish between the various tax-exempt
entities of an interest group sponsoring the ad. Therefore, observers might, for example,
think that an ad paid for by the Sierra Club Voter Education Fund (a 527 committee) was
sponsored by the parent Sierra Club because the latter was listed as the ad’s sponsor.18
13
III. What the Groups’ 501(c) Advocacy Organizations Did to
Try to Influence Federal Elections
Table 3, based on non-governmental as well as official sources, indicates that 9 of the 12
interest groups had 501(c) advocacy organizations that put resources into federal
campaigns during the last three election cycles. All these organizations were corporations
or labor unions, which are not allowed to make contributions or do express advocacy
spending. Only one interest group, NDN, did not have a 501(c) advocacy entity –
although it recently created one. Two others, Club for Growth and Progress for America,
did not appear to use theirs for federal elections. Our definition of federal campaign
spending is drawn from both federal campaign finance law and regulations and IRS law,
regulations, precedential and other guidance. We explain these references at relevant
points in the discussion below. While the particular mix varied by organization and by
cycle, the major election activities were:
•
Subsidizing a connected PAC’s administrative and fundraising costs;
•
Making express advocacy and other campaign communications to administrative
personnel, members and their families;
•
Making express advocacy communications to the general public through the
“MCFL exception” to the ban on corporate political expenditures. (Such
exceptions, based on a 1986 Supreme Court decision in FEC v. Massachusetts
Citizens for Life, are for 501(c)(4) corporations that only advocate issues or
conduct election activities, have no shareholders or business income, and receive
no corporate or union financing. MCFL corporations may accept unlimited
contributions from individuals);
•
Sponsoring non-express advocacy TV, radio and other press communications
that have either the intent or reasonable effect of promoting, attacking,
supporting or opposing candidates;
•
Making similar non-express advocacy appeals via phone, mail, canvassing,
internet and other means in order to identify, register and mobilize voters; and
•
Assisting other groups’ 527 and 501(c) political activities.
As we will show, the groups regard their 501(c) election pursuits as part of an integrated
political effort including a division of labor with their PACs or 527s. Again, the
cumulative effort amplified the groups’ financial influence in federal elections and
encouraged the perception of seamlessness in the groups’ diverse campaign activities. For
our analysis, we divide the nine groups with active 501(c)s into two categories: those
with and those without 527s.
14
Table 3:
Federal Election Campaign Spending by 501(c) Advocacy Organizations of 11 Sample Nonprofit
Organizations for the 2000, 2002 or 2004 Election Cycles
Activity
AFSCME
(c)(5)
Americans
for
Job
Security
(c)(6)
Chamber of
Commerce
of the
U.S.A.
(c)(6)
Club for
Growth
Advocacy
(c)(4)
MoveOn.org
Civic Action
(c)(4)
National
Rifle
Associatio
n
(c)(4)
National
Right to Life
Committee
(c)(4)
Assists "connected" PAC
X
X
X
X
Makes express advocacy or
other communications to
"members"
X
X
X
X
X
X
X
X
$0
$0
MCFL* group with express
advocacy to public
Runs TV, radio or
newspaper issue ads with
slants toward or against
candidate
X
X
Mobilizes voter support via
mail and other contacts (no
express advocacy)
X
X
Aid other groups' 527s or
501(c)s
X
"Political Expenditures"
Reported on IRS Form 990
in 2003-2004
$0
X
X
$0**
$3,957,725
$0**
$1,822,944
* "Massachusetts Citizens For Life" groups are 501(c)(4) organizations exempt from federal campaign finance law's bans on corporate and union express advocacy and
"electioneering" spending because they only advocate issues or conduct election activities and have no corporate or union financing or business income.
** As of July 7, 2006, CFI has been unable to obtain 2004 Form 990 return for this organization. Total is for fiscal year 2003 only.
Source: Compiled from sources listed in "Data Sources" section, Appendix D.
15
Table 3 Continued: Federal Election Campaign Spending by 501(c) Advocacy Organizations of 11 Sample
Nonprofit Organizations for the 2000, 2002 or 2004 Election Cycles
Activity
Planned
Parenthood Action
Fund
(c)(4)
Progress for
America
(c)(6) and (c)(4)
SEIU
(c)(5)
Sierra Club
(c)(4)
Assists "connected" PAC
X
X
X
Makes express advocacy or
other communications to
"members"
X
X
X
MCFL group with express
advocacy to public
X
X
X
$0
$0
Runs TV, radio or newspaper
issue ads with slants toward
or against candidate
Mobilizes voter support via
mail and other contacts (no
express advocacy)
Aid other groups' 527s or
501(c)s
"Political Expenditures"
Reported on IRS Form 990 in
2003-2004
X
$3,354,554
$0
* "Massachusetts Citizens For Life" groups are 501(c)(4) organizations exempt from federal campaign finance law's bans on corporate and union express advocacy and
"electioneering" spending because they only advocate issues or conduct election activities and have no corporate or union financing or business income.
** As of July 7, 2006, CFI has been unable to obtain 2004 Form 990 return for this organization. Total is for fiscal year 2003 only.
Source: Compiled from sources listed in "Data Sources" section, Appendix D.
16
IV. 501(c) Groups Without 527s: NRA, NRLC, Americans for
Job Security, Chamber of Commerce
For the groups without 527s, the 501(c) advocacy organization was especially useful for
carrying out 527-type activities. Where the group had a large membership, the 501(c) was
also an attractive vehicle for internal election communications.
Conservative Groups
NRA: Working mainly through its Institute for Legislative Action, which also runs its
PAC, the 501(c)(4) National Rifle Association emphasizes grassroots voter identification
and turnout. Much of its activity consists of mobilizing the group’s large membership
(3.4 million in 2004) behind preferred candidates via mail, phone, personal contact,
rallies, and ratings and endorsements in several member magazines. The NRA also
solicits campaign contributions and recruits volunteers for these campaigns. The “express
advocacy” portion of this effort reported to the FEC ranged from $1.8 million in the 2000
cycle to $224,000 in 2002 and over $1 million in 2004.
In recent years, the NRA has also greatly expanded its use of lists of licensed hunters,
subscribers to gun and hunting publications, and sympathetic labor union members to
develop targets for both express and non-express advocacy voter mobilization campaigns.
(The PAC participates through express advocacy messages).19
The NRA also uses mass media. During the 2000 campaign, it launched 30 and 60
minute TV “infomercials” designed to “recruit members, rally voters and convert the
undecided.” Asked if critical references to Democratic Presidential candidate Al Gore in
one major infomercial were designed “in part” to persuade viewers to vote against him
and would have an impact on the election, Executive Director LaPierre replied, “…Is
there any election impact? Yeah. On the other hand, is it about the air [the issue
environment on gun control]? You bet it is.”20
According to the University of Wisconsin Political Advertising Project, the NRA
sponsored 395 TV ads mentioning candidates in the 2000 election, 358 of them in the last
60 days when almost every such ad of that year was judged by the Project to be a
campaign rather than an issue ad. While the Project’s methodology was questioned by the
NRA and other plaintiffs in their constitutional challenge to the electioneering provisions
in BCRA, two federal courts substantially supported the methods and findings. This in
turn helped lead to the Supreme Court judgment in McConnell v. FEC (2003), upholding
the Act’s ban on corporate and union sponsorship of candidate-specific ads in the last 60
days before a general election.
After BCRA went into effect, the NRA sought to re-orient its corporate media program
by launching three hours of daily programming on Sirrius satellite radio.21 By producing
its own show, it qualified for the “media exception” to federal campaign finance
restrictions. To reach a wider public, the group continued to sponsor about the same
17
number of candidate-specific TV ads in 2004 (538 ads in the 75 largest media markets, of
which 484 appeared in the last 60 days), but it was forced to do so through its hard
money PAC.
La Pierre has emphasized, in court testimony, that federal contribution limits determine
which activities are conducted by the (c)(4) or by the PAC, which is called the Political
Victory Fund (PVF). It is apparent that the interest group has a unified goal in its various
political expenditures, but uses a pragmatic calculus to choose its particular vehicles:
I mean the PVF dollars are very, very hard to raise. It—Most of the PVF
activity involves specific vote for or against this candidate … Providing
things like voter registration, voter identification efforts, polling… have
been more carried out in terms of the NRA by the Institute for Legislative
Action [the lobbying arm of the NRA’s (c)(4)] because under the law,
they’re not specifically required to use PVF dollars for these activities.22
When one compares the NRA’s targeted non-express advocacy voter mobilization
activities (often using lists of “friendlies” as well as polling) to IRS regulations and nonprecedential guidance, they look very much like political campaign expenditures. As one
relevant IRS Private Letter Ruling concerning another group’s similar actions concluded
with citation to an IRS regulation in 1999: “While these activities may not be identified
with a candidate or party in every case, they are partisan in the sense that you intend to
use these techniques to increase the election prospects of pro-issue candidates as a
group.”23 The NRA’s spending for these activities clearly had to range well into the
millions of dollars. Nevertheless, the NRA’s 501(c)s reported political expenditures of
approximately $124,000 in 1999, $23,000 in 2000, and $7,000 in 2001. It reported no
political expenditures for 2002-04.
NRLC: The 501(c)(4) National Right to Life Committee reports a political division of
labor similar to that of the NRA. As Executive Director David O’Steen has testified:
The identification of pro-life people is generally done by NRLC; get out
the vote efforts [which O’Steen explained were often express advocacy
independent expenditures] have been done by the NRLC PAC. Polling has
been done by either. Telephone banks, it would mean I suppose get out the
vote, would by done by NRLC PAC. What are known as voter guides that
do not advocate the election, defeat of any candidate would generally be
done by NRLC. Independent expenditures which advanced the election or
defeat of a candidate would be done only by NRLC PAC.24
Examination of a sample NRLC voter guide from the 2004 election, found in the Center
for Study of Elections and Democracy (CSED) ground mail database, reveals a
comparison of Bush and Kerry on the issue of “abortion.” Apart from other relevant
questions such as whether or not the guide contained biased questions, or its distribution
was targeted to increase one candidate’s vote, longstanding IRS precedential guidance
makes it reasonably clear that the voter guide is political campaign intervention because
18
“its emphasis on one area of concern indicates that its purpose is not nonpartisan voter
education.”25
The NRLC has relied less on media campaigns than the NRA. It mounted no candidatespecific TV political ads in the top 75 media markets in the last three cycles. It used some
radio and newspaper ads in selected congressional contests, and ran a controversial radio
ad concerning presidential candidate John McCain’s position on campaign finance reform
during the 2000 New Hampshire primary. Today that ad would be subject to BCRA’s
restrictions on “electioneering communications”.26
Although the NRLC has referred to having 300,000 members (technically these are
members of its state and local affiliates), it reported no communications costs to the FEC
in the last 3 cycles. Nor has it reported any political expenditures to the IRS on its Form
990s.
Business Associations
Americans for Job Security and the U.S. Chamber of Commerce: The two business
leagues, Americans for Job Security and the U.S. Chamber of Commerce, rely even more
on their 501(c)(6)s for federal election related activity than the above groups do on their
501(c)(4)s. Not only do they lack 527s, but AJS has no PAC and the Chamber has a
relatively small one.
Both organizations bought large numbers of candidate-specific TV ads in 2000. All of the
Chamber’s 7,574 ads in the top 75 markets ran during the 60 day “electioneering” time
frame, as did 5,007 of AJS’s 6,069 spots. AJS continued along this line in 2002 when all
of its 1,615 ads fell within 60 days of the election. With BCRA in effect in 2004, AJS ran
all but 133 of its 2,290 candidate-specific ads before the 60 day window, but there was no
change in the way the ads discussed candidates’ views on an unusually wide range of
policies. For example, in June 2004, it ran this TV ad during the Senate campaign of
Republican Richard Burr:
"What will it take to get North Carolina moving? Experience. Leadership. Richard
Burr. In Congress, Burr fought to keep jobs here, while attracting new businesses.
He blocked unfair trade practices seven times, voting against giving China special
trade status. A small businessman for 17 years, Burr has the leadership required to
protect jobs of our working families. Call Richard Burr. Tell him thanks for being
a conservative, common sense voice for North Carolina."27
Under the terms of the IRS’s January 2004 Revenue Ruling on public advocacy
communications, these ads appear to us to include almost all of the 6 factors tending to
show the communications to be political expenditures (identifying candidates, timed with
the campaign, targeting voters, identifying the candidate’s policy position, distinguishing
it from his or her opponents, and not being part of a series of communications on the
same issue). At the same time, they incorporate none of the 5 factors tending to prove the
19
opposite (involving orientation to specific pending legislation or a discrete event that the
organization hopes to influence).28
Representatives of both trade groups have maintained that their ads were designed to
promote policies, often at times and places of maximum public attention, without
reference to any specific pending legislation or governmental action. But they also may
have tacitly acknowledged their potential electoral impact. Asked whether it “crossed his
mind” that an ad criticizing the views of a congressional candidate in Ohio in 2000
“might persuade some people to vote against Ms. O’Shaughnessy,” Bruce Josten, the
Chamber’s Executive Vice-President for Government Affairs, replied, “It might have.”29
Similarly, AJS President Michael Dubke said that his group’s ads aired during tight
federal races because politicians and the media, inside and outside the district, focus on
issues raised in competitive races. Asked whether advertising during these contests
affects their results, he replied, “I hope…but that is not the thrust. [It is] to make them
[voters] think before they take action.”30
AJS seeks to amplify its air war with a small ground operation (mail, phone calls, fliers
and banners). In contrast, since 2002, the Chamber has emphasized ground activities. The
brunt of this effort has not consisted of reportable spending for communications to the
Chamber’s 3 million business members or 2,800 state and local affiliates. Only $75,000
in such communication costs were reported for the 2004 cycle, and none before then. It is
clear that this figure was only the tip of the iceberg. In a December 2004 memorandum
from Chamber President and CEO Tom Donahue to his Board of Directors, Donohue
began by briefly recapping the Chamber’s entire “political program” for the justconcluded national election:
The Chamber put 215 people on the ground in 31 states; sent 3.7 million pieces of
mail and more than 30 million e-mails; made 5.6 million phone calls; and enlisted
hundreds
of
associations
and
companies
in
our
web-based
“VoteForBusiness.com” program to educate and mobilize voters.31
(Elsewhere, Donohue has described the web-based program as permitting users to “learn
about the issues that affect your business and how the candidates voted on them.”32)
Donohue continued by elaborating on a coordinated operation between the PAC, which
reported only contributing to congressional campaigns, and the 501 (c) (6) which
apparently did almost everything else via non-express advocacy messages. Donahue
related that the Chamber had “targeted” 37 “tough” House and Senate races and was
successful in 27 of them. “As for the presidential race,” he continued, “the Chamber did
not endorse in the election, but executed a voter education and get-out-the-vote effort, as
well as provided significant support to the November Fund because we believed that the
prospect of having a trial lawyer a heartbeat away from the presidency would influence
our legal, judicial, and regulatory environment for years to come.” The Fund “targeted”
four battleground states that “ended up in the Bush column.” Donahue also discussed an
8 battleground state “education and get-out-the vote campaign” that “targeted
independent women ages 18 to 49 with children.” Its message tied Democratic Vice-
20
Presidential candidate John Edwards to the trial bar’s “opposition to solving the national
medical malpractice crisis.” The campaign included full page newspaper ads, 1 million
mail pieces, 2 million phone calls and over 3.4 million emails. Only two of the states
“went for the Kerry-Edwards ticket.”33
The November Fund assisted by the Chamber was a 527 group that raised $3.15 million
in the 2004 cycle, of which $3 million came from the Chamber. In 2000, the Chamber
also supported another federal 527, Citizens for Better Medicare, according to Chamber
testimony.34
The Chamber also sponsored a $400,000 TV campaign, part of a $1 million effort to
defeat Senator Tom Daschle, the Democratic leader, in his tough South Dakota race. The
ads argued that Daschle had “killed medical malpractice lawsuit reform” and that he was
more interested in “scoring political points than solving our problems.”35
Combining these activities with its Institute for Legal Reform’s “voter education efforts
in 16 state Supreme Court and Attorney General contests,” the Chamber, said Donohue,
“invested up to $30 million in the November 2nd elections,” more than the $21 million it
spent in the 2002 cycle or the $10 million it estimated for 2000.36
AJS has reported no political expenditures to the IRS; the Chamber of Commerce
reported none in its 501(c) reports until 2004 when it reported $4 million. (Its Institute for
Legal Reform reported $14 million).
21
V. 501(C) GROUPS WITH 527S: AFSCME, SEIU, Planned
Parenthood Action Fund, MoveOn.org and Sierra Club
Groups that had 527s were understandably less dependent on their 501(c)s for 527-type
activities. Depending upon their particular circumstances, they used their 501(c)
organizations to make member communications, supplement 527 operations, or support
grassroots lobbying and issue campaigns with elements of partisan struggle.
Labor Unions
The two labor unions, AFSCME and SEIU, had large 527s and PACs. They used
501(c)(5) organizations (the tax code’s designation for labor unions) mainly to mobilize
their members -- 1.4 million and 1.8 million respectively -- and the members’ families. In
the 2004 cycle, AFSCME reported $4.6 million in communication costs and SEIU
reported $2 million. That these figures vastly understate the total effort is suggested by
SEIU President Andrew Stern’s July 2004 estimate that his union would “spend $20
million or so talking to our own members at their workplaces about the issues that were
important to them, mailing and phone calls.”37 Stern’s language also highlights the FEC
regulatory gap in which communications primarily utilizing express advocacy are
reported, but not those primarily dealing with “issues” (and perhaps secondarily with
express advocacy!). After the election, SEIU said that it had sent “over 4 million pieces
of direct mail designed to share with union households John Kerry’s vision for the
country.”38 It also operated “mobile calling centers” to enable its members to make
“millions of calls” to their colleagues.39
For its part, AFSCME undertook to contact its members at least 8 times during the
election through a combination of telephone calls, mail, and visits to homes and
workplaces.40 In an October 2004 press release, it said it had 15,000 members working
1.7 million hours on AFSCME, AFL-CIO Labor 2000, and nonpartisan get-out-the-vote
operations in 16 battleground states.41
Both 501(c)(5) union organizations also gave funds directly to other groups’ 527s.
According to IRS data, AFSCME gave $498,000 to others’ 527s in the 2004 cycle, more
than double its contributions in 2002. And SEIU transferred $882,000 in 2004, more than
five times what it gave in the previous cycle.
Other groups’ 527s were not the only relevant beneficiaries of AFSCME’s assistance.
During the 2000 election, a new 501(c)(4) group known as American Family Voices
aired a number of ads in battleground states attacking presidential candidate George W.
Bush for his health policies as Governor of Texas. It was subsequently revealed that a
large part of the group’s funding -- at least $800,000 -- came from AFSCME’s (c)(5).42
This brings up a major incentive for the use of 501(c) advocacy organizations in
elections: there is no public disclosure in Form 990 of these organizations’ transfers to
outside 501(c) entities unless the latter are charities. (If the receiving organization is a
527 organization, it is required to disclose the contribution.) Thus, even if the provision
22
for reporting on political expenditures were more effectively implemented, there would
still be no way to assess the full extent of an advocacy organization’s support for political
campaigns since there would be no knowledge of its financial and other transactions with
similar organizations. Generally speaking, inter-group transactions can be employed to
obscure the true source of campaign funds. Donors often seek out “conduits” that enable
them to preserve their anonymity. The public is then completely unaware of who is really
“speaking.” A number of organizations, including CFI, have called upon the IRS to close
this loophole, but the Agency has not responded.43
Neither AFSCME nor SEIU reported any political expenditures to the IRS on their
501(c)(5) forms.
Liberal Groups
Planned Parenthood: With relatively few individual members (30,000 in 2004), the
501(c)(4) Planned Parenthood Action Fund reported only $8,000 in internal
communication costs in the 2004 cycle and none in earlier cycles. A major programmatic
thrust has been express advocacy to the general public financed by the Action Fund’s
corporate treasury under the "MCFL" exception. This kind of spending by PPAF jumped
from $445,000 in the 2000 election and $397,000 in 2002 to $2.6 million in 2004. Unlike
527s, MCFL organizations are exempt from BCRA’s ban on corporate sponsorship of
candidate-specific ads within the 60 day general election window.
In addition, the Action Fund distributes partisan voter guides that do not use express
advocacy and conducts similar get-out-the-vote campaigns.44 In 2004, the Action Fund
also provided modest aid ($50,000) to a separate 527 organization, America Votes, of
which it was a member.
In describing the process by which the Action Fund decides which election activities to
support45 through its 527 and which to assign to its 501(c)(4), Planned Parenthood Legal
Affairs Director Dara Klassel echoed others group representatives’ accounts of
coordinating the programs of 501(c) advocacy organizations, PACs and 527s. In this
case, Klassel said, both legal rules and financial constraints are determinative. The Fund
decides based on “what we need to do and what we can fund with the 527.”46
Finally, the Action Fund’s parent group, the 501(c)(3), service-oriented, Planned
Parenthood Federation of America, provided some indirect assistance to the Fund’s
political operations. Major declared purposes of a $1.7 million grant to the Federation in
2000 from the Turner Foundation (chaired by media mogul Ted Turner) were
“engagement of new choice supporters.” and “organizing list use and training.”47 The
resulting supporter lists were rented by the (c)(3) to the (c)(4) at “fair market value” and
used in its political operations.48 As the Action Fund related in a contemporary report,
“We were able to make the resources we invested in these congressional voter education
campaigns go further by renting lists of pro-choice identified voters through the ProChoice Organizing Project (POP) and using existing lists of Planned Parenthood
supporters rather than investing in extensive pro-choice voter identification ourselves.
23
This dramatically cut down on our expenses. In fact we saved over $400,000 by being
able to rent these lists rather than recreate our own.”49
Also in 2000, Turner’s spouse and Turner Foundation Director Jane Fonda contributed
$12.3 million to Pro-Choice Vote, a 527 that reported giving $6.3 million to the Action
Fund. These funds basically supported the Action Fund’s media campaign which it ran
through its own 527 organization. The media campaign was envisioned as working in
tandem with follow-up communications by the (c)(4) to the aforementioned “voter
education” lists.50 The nature and chronology of Fonda’s gift, how it was used, and her
relationship to Turner and his Foundation raise further concern about the purposes of the
Foundation grant to the Planned Parenthood 501(c)(3). Planned Parenthood’s Klassel
commented:
The purpose of the development of the Pro-Choice Organizing Project list
of supporters of reproductive rights was to assist 501(c)(3) organizations
in their efforts to educate and mobilize supporters on matters of policy
relating to the organizations’ missions. For almost seven years, these
organizations have used the list extensively and continually in those
efforts, resulting in a public more aware of and responsive to threats to
women’s reproductive freedom.51
The Action Fund is the only 501(c) organization in our sample that consistently reported
its political expenditures to the IRS. These included $1.3 million in the election year 2000
and $3.1 million in 2004. According to Klassel, recent changes in IRS guidance regarding
political spending have resulted in some communications not previously considered
electoral being considered so now.
Sierra Club: In contrast, the Sierra Club’s 501(c)(4) “does nothing politically,”
according to longtime Executive Director Carl Pope, because if it did “we would have to
pay taxes.”52 He makes an exception for non-taxable, express advocacy internal member
communications. With 750,000 members, the Club reported $788,000 in communication
costs in the 2004 cycle, more than three times the 2000 level.
Since the mid-1990s, the Sierra Club has relied upon its 527, the Sierra Club Voter
Education Fund, to reach the general public. Since the 2000 election, when Planned
Parenthood’s 527 suddenly but only temporarily blossomed with Fonda dollars, the
Club’s 527 has been far more financially successful than Planned Parenthood’s 527.
Sometimes Voter Education Fund expenditures have been mistakenly attributed to the
Club itself because they were disclosed under the parent Club’s name. As indicated
earlier, the FCC’s acceptance of this practice clouds independent analyses of nonprofits’
political spending.
Certain grants to the Club by the 501(c)(3) Sierra Club Foundation may contribute
indirectly to 527 or PAC political operations in a manner similar to the Turner
Foundation’s grants in 2000 to Planned Parenthood’s 527. According to the Sierra Club
Foundation’s 2004 Annual Report, a $10 million grant to continue support of the Club’s
24
Building Environmental Communities (BEC) Campaign will “educate the public about
environmental dangers and mobilize key constituencies to challenge environmentally
destructive government action.” As a result of past grants, the Report continues, “We
now have more than 15,000 BEC activists identified and in 2005 the BEC program
expanded to 40 locations nationwide. Previously, there were 16 sites in 14 states,
resulting in the recruitment of 8,500 activists previously not involved with the Sierra
Club; half of them were not even members.”53 Such grassroots organizing activities can
create fertile ground for recruiting pro-environmental voters. Asked about this, Pope
acknowledged that the BEC program builds relationships and a public reputation “so
when the hard money flier goes out, we probably benefit.”54 It is important to recognize
that the Sierra Club program does not have the same suspect quality as the Planned
Parenthood organizing initiative which was complemented in the time frame by massive
election funding from a related organization. But these 2 examples suggest more
generally that in the modern world of grassroots lobbying and political organizing, it may
be possible to conceal partial support for the latter objective behind the former.
Advocacy organizations benefiting from direct support by 501(c)(3) tax deductible
entities -- and only NRA and Sierra Club reported such transactions in our sample -may not use these funds for partisan campaign intervention. However, the assistance may
subsidize portions of the advocacy organization’s budget, freeing those funds for political
activities. The challenge under current tax law is for the IRS to make sure the “charities”
do not go further and provide political goods to their networks either directly or
indirectly.
The Sierra Club has reported no political expenditures to the IRS in its 501(c) reports.
MoveOn.org: MoveOn.org’s 501(c)(4), and the group in general, are unique among
those we studied in theei overwhelming reliance on low cost Internet communications
and minimal staff overhead. Yet this group has the most members: about 3 million.
According to co-founder and Chief Operating Officer, Carrie Olson, its members are
actually considered to be “members of the website” which is co-owned by the 501(c)(4)
and the PAC. Members receive an average of two e-mails a week inviting them to be
active: for example, to attend a house meeting or contact a representative.55 No FEC
communication costs were reported.
Although the founders envisioned a nonpartisan, issue-advocating, coalition-building
501(c)(4) playing a more central role in the overall group, Olson said this goal was
thwarted after 2000 by an unexpectedly partisan environment. So the 501(c)(4) accounted
for only about 20% of the group’s total expenditures in the 2004 cycle, which were
dominated by those of the PAC followed by the 527. Much of the 501(c)(4)’s program
consists of nonpartisan advocacy and coalition-building. For example, the organization
has recently been conducting national campaigns against media concentration and in
favor of “net neutrality” (non-discrimination between corporate and other content by
internet service providers) and it has actively opposed the war in Iraq. At the same time,
it has acknowledged to the IRS, more explicitly than other advocacy organizations we
studied, that “Organizing/partisan” is a leading “program achievement” (including
25
“Working with other groups to develop strategies for stopping the right wing political
agenda.”).
Olson indicated that the group’s explicit acknowledgment of partisan political
expenditures is an outgrowth of its attorneys’ caution about “not ignoring possible
[partisan] political activities” associated with its advocacy campaigns. For example, “If
we are working on issues like minimum wage, verified voting, turning out the women’s
vote -- supporting through grants other organizations (not ourselves directing the message
or turning out the troops) largely within states like Minnesota, Nevada, Alabama, Oregon,
Maine -- then we list them as political expenditures.”56 In correspondence with a
representative of Public Citizen, MoveOn.org acknowledged that its early 2004 ad
criticizing President Bush’s focus on the gay marriage issue could be “fairly
characterized as partisan” because it maintained that he was trying to distract the nation
from Iraq and the economy “rather than lobbying for a particular action.” 57
MoveOn.org reported $140,000 in political expenditures on its 501(c)(4) organization’s
990 Form in 2002, $1.1 million in 2003 and $743,000 in 2004.
26
VI. The Groups’ Individual Donors Also Attempted to
Influence Elections With Combined “Hard” and “Soft” Money
Partisan Contributions
A pyramiding of financial contributions to elections also occurs at the level of the group’s
political donors. Of course, those who contribute to a group 527 can give unlimited sums
that do not count toward the donors’ aggregate or other contribution limits under federal
campaign finance law. But the association of both “hard” and “soft” money contributions
has a broader and even more fundamental impact on election financing. It is not mainly a
question of a donor magnifying his or her limited “hard” money contribution to or
through the same group’s PAC by making a large, unlimited “soft” money donation to
the group’s 527 -- which is spending on behalf of the same candidates or party as the
PAC is. This occurred frequently only in the case of the Club for Growth. More
commonly, the large 527 donor to one or more overwhelmingly partisan interest groups
simultaneously contributed to a range of candidates, PACs and party committees of the
same political orientation. This expanded his or her potential influence over elections and
gave the contributions the air of a broad, unified strategy. This pattern seems likely to
severely diminish candidates’ and voters’ perception of a distinction that donors were
“spending” with certain funds and “contributing” with others.
Table 4 portrays $5000+ individual donors to six of the eight interest groups that had
527s in the last federal election (The two labor unions, AFSCME and SEIU, had 527s,
which they supported with their 501(c)(5) treasuries, but no such large individual
donors). The table shows what these donors gave to the group’s 527 and what they gave
to all federal political committees (candidates, PACs and parties). Of the 556 unique
individual $5000+ donors to the six groups’ 527s (some donors gave to more than one
group’s 527), 482 also gave to federal political committees. As the table shows, the
global amounts contributed by each group’s donors were quite substantial, nearly always
adding up to millions of dollars. The mean $5000+ donor’s total “soft money”
contribution to a group’s 527 ranged from $49,020 (Sierra Club Voter Education Fund) to
$339,662 (Progress for America). The median went from $5,850 (MoveOn.org Voter
Fund) to $132,000 (Planned Parenthood Votes). At the same time, the mean total “hard
money” contribution by a group’s 527 donors to all federal committees ranged from
$35,361 (Club for Growth) to $93,963 (Planned Parenthood Votes) and the median from
$23,703 (Club for Growth) to $85,925 (Planned Parenthood Votes). The average donor
who contributed to both a group’s 527 and federal committees made between 19 and 39
hard money contributions in the 2004 cycle.
27
Table 4:
Individual Donors to Sample Interest Groups' 527s and Their Contributions to Federal Political
Committees (Candidates, Parties, PACs) for the 2004 Cycle
I
Individual Donors to Group 527s ("Soft Money")
527 Committee
# Donors 5K & Up
$ to 527
Median Amount
per Donor
Mean Amount
per Donor
Club For Growth
216
13,892,035
14,825
64,614
Moveon.org Voter Fund
74
10,160,078
5,850
137,298
New Democrat Network-Non-Federal
113
7,411,840
18,000
66,177
Planned Parenthood Votes
769,280
132,000
128,213
Progress For America Voter Fund
125
42,118,149
25,000
339,662
Sierra Club Voter Education Fund
81
3,970,595
13,058
49,020
556**
78,321,977
Total
6
II
Individual Donors to Group 527s Who Also Contributed to Federal Political Committees* ("Hard Money")
527 Committee
# 527 Donors who
gave to Fed. Comm.
$ Contributed to
Fed. Committees
Median Amount
per Donor
Mean Amount
per Donor
Mean # of Contribs to
Fed.
Club For Growth
197
6,966,020
23,703
35,361
19
Moveon.org Voter Fund
60
3,276,086
56,525
54,810
21
New Democrat Network-Non-Federal
95
5,255,599
63,500
55,391
20
Planned Parenthood Votes
4
353,850
85,925
93,963
39
Progress For America Voter Fund
105
6,031,264
55,000
57,441
18
Sierra Club Voter Education Fund
67
3,222,981
46,500
48,130
19
Total
482**
22,231,989**
* Federal political committees are those with the major purpose of influencing federal elections and receiving contributions or making expenditures of at least $1,000. They include
candidate, party and political action committees. Up to now, "major purpose" has been determined on the basis of contributions made and "express advocacy" spending.
** Amount does not equal the total of donors to all groups added together, as some donors gave across groups, making the unque number of donors and the total amount given less
than the total.
Source: Compiled from FEC data; 527 disclosure reports filed with the IRS (2004 cycle); and 527 data provided by the Center for Public Integrity (2000 & 2002 cycles).
28
The combination of “soft” and “hard” money contributions meant that the total giving of
many of these larger donors surpassed the current individual aggregate limit for hard
money donations, currently $101,000 per two year cycle.
Table 4a breaks down the federal committee contributions of these donors into House,
Senate, Presidential and Party contributions. (PACS are omitted because their political
orientations are not instantly apparent.) The table demonstrates that the hard money
contributions of these large 527 donors are overwhelmingly partisan, reinforcing their
donations to similarly partisan 527s. In the real world, it is unlikely that these donors or
many of their beneficiaries see fundamental distinctions between their contributions to
candidates, PACs and parties and to independent 527 spenders. (Certainly the party
leaders who denounce George Soros, Bob Perry and other major donors to 527s that
support the opposite party do not see such differences.) Again, whether the reality and
perception of unified campaign finance strategy by individual donors leads to a greater
threat of corruption is a separate, though related, issue.
The same information for the 2002 cycle appears in Appendix C. Only 4 groups are
shown, because 2 of our sample groups (Progress for America and MoveOn. org) did not
operate 527s before 2004.
29
Table 4a:
Individual Donors to Groups' 527s and Their Contributions to Federal Candidates
and Parties for the 2004 Cycle, by Party Affiliation
House
527 Group
Club for Growth
MoveOn.org Voter Fund
New Democrat Network - Non-Federal
Planned Parenthood Votes
Progress For America Voter Fund
Sierra Club Voter Education Fund
Senate
Pres.
Party
Party
Orientation
of 527
Dem
Rep
Dem
Rep
Dem
Rep
Dem
Rep
R
D
D
D
R
D
43,366
348,926
400,200
44,900
73,000
375,600
1,392,179
15,500
30,312
4,000
592,663
11,550
45,000
602,833
1,045,966
43,000
73,750
510,983
1,299,692
18,250
79,500
6,000
790,146
11,015
15,800
256,250
346,250
19,000
6,000
227,350
289,050
4,000
16,600
0
235,000
2,000
61,000
1,581,102
2,636,677
202,950
8,500
1,653,857
2,451,333
0
151,000
0
3,435,488
0
Note: Amounts will not add up to totals for each category (House, Senate, etc.) as some small amounts were given to minor party candidates and committees.
Source: Compiled from FEC data; 527 disclosure reports filed with the IRS (2004 cycle); and 527 data provided by the Center for Public Integrity (2000 & 2002 cycles).
30
VII. Policy Implications
Thus far, the public argument over possible regulation of contributions to 527
organizations has proceeded within the traditional categories of campaign finance law.
Do contributions for independent spending by 527s on elections, even though there is no
express advocacy, present the same potential risk of corruption as campaign contributions
to candidates or parties or to a PAC making only independent express advocacy
expenditures? If 527 contribution limits push contributions into 501(c) advocacy entities,
can campaign finance law touch these funds without trespassing on these organizations’
critical role in our democratic conversation? The way these issues are framed seems to
presume separate 527 organizations that have nothing at all to do with contributions or
express advocacy and separate 501(c) organizations that have little or nothing to do with
partisan campaigning. In each case, discrete donors with separate objectives are
presumed.
Yet the real situation is quite different. Federal 527s are often parts of larger interest
groups that utilize a mix of tax-exempt entities, including 501(c)s, to try to influence
elections. Moreover, their election strategies generally are key components of broader
programs to influence public policy. Leaders of interest groups with traditional federal
PACs, newer 527s, and 501(c)s participating in elections do not perceive these
organizations and their activities as anything other than aspects of coordinated
campaigns. But such a coordinated effort means that a group’s, and its donors’, financial
weight in elections is greater than it appears to be in conventional discussions, as is the
potential threat of “undue influence” over elected officials.
This does not necessarily mean that one must favor increased regulation of all electioninfluencing entities. There is still room for debate about whether contributions to truly
independent nonprofit groups engaged in elections, rather than elected officials or
political parties, introduce a filter that lowers the potential for donors to corrupt, or
appear to corrupt, the government. Moreover, one can maintain that the benefits brought
to our democratic conversation by nonprofit advocacy and civic engagement outweigh
the costs of potential big donor influence over its outcome and elected officials. Carl
Pope of the Sierra Club, which supported enactment of BCRA, offered an unusually
strong version of this side of the argument:
The issue is not whether folks need to use 527s. It is whether large contributions
to independent entities should be limited or not, since these entities are not public
officials, and do not, in the real world, create corruption or its appearance. If
independent organizations which wish to criticize politicians cannot use large
contributions to do so, most of them will be effectively silenced. Since only
politicians (and a few Internet based, multiuse groups) can raise enough in
individual donations under $5,000 to have a meaningful voice in the dialogue, the
effect of proposals currently floated around will be to create a “speech free” zone
around politicians…. While we are one of the largest membership organizations,
the reality is that most of the dues revenues from members go to support the
31
membership – not to reach out beyond it to the community. All genuine
membership non-profits raise most of their program money from large gifts – so
the kinds of changes that are being discussed would, effectively, mean no
meaningful non-profit programs aimed at politicians, electoral participation or
elections. Only politicians, corporations and “faux” membership groups would
remain on the playing field in terms of mobilizing or communicating with the
general public.58
Furthermore, in the aftermath of the 2004 election, many supporters of maintaining the
current legal status of 527s asserted that the latter were largely responsible for increased
voter turnout over the 2000 contest.
Whether or not the facts ultimately vindicate or refute Pope’s position, we believe it is
necessary to conduct the debate and explore the policy alternatives on a terrain that goes
beyond the intellectual straitjacket of legal categories established 30 years ago. There are
a range of policy options. On one hand, one might favor maintaining unlimited
contributions to 527s and 501(c) advocacy groups in elections or even loosening current
limits on contributions to pure independent expenditure “political committees.” On the
other, one might support requiring public disclosure or regulation of contributions to all
such nonprofit organizations that spend more than a threshold amount on partisan
elections, whatever their legal form.
Our study also addresses many advocacy groups’ concern that BCRA’s provisions on
“electioneering communications” and recent proposals to broaden the FEC’s definition of
“political committees” could interfere with funding for genuine issue ads and grassroots
lobbying. We were impressed that almost all of the 501(c)s we looked at were, in their
public statements, able to identify clearly a range of non-express advocacy
communications including ads (labeled “voter education,” “voter guides,” “get-out-thevote”, “issue discussion”) as parts of their overall election programs. (Americans for Job
Security was the notable exception.) We also found evidence, particularly in our
discussions with representatives of Planned Parenthood and MoveOn.org, that the 2004
IRS guidance on this subject is viewed as workable by those attempting to apply it and
that it has contributed, in at least those cases, to increased and improved reporting on
political expenditures. While there is still obviously plenty of room for argument about
where exactly to draw the line between election and non-election advocacy, the problem
does not seem insuperable, particularly if there were clearer IRS guidance and
monitoring.
This study also throws additional light on the question of whether regulation of 527s
could push political financing into 501(c) advocacy organizations. Certainly, the
likelihood of such a development would be increased if the IRS fails to improve its
monitoring of 501(c) political expenditures subject to taxation. More fundamentally, we
discovered that most of the groups we examined had financially strong advocacy
organizations that could potentially take over 527 activities without jeopardizing their
primary advocacy missions. In fact, four of the groups were already doing just that. On
the other hand, three groups (Club for Growth, NDN and Progress for America) might
32
have great difficulty in navigating such a transition because of their narrower campaign
focus and weaker membership bases and grassroots networks. These groups, along with
Americans for Job Security, had fewer residual elements than others from what political
scientist Theda Skocpol has heralded as a kind of golden age of American participatory
democratic interest groups, namely: large memberships, federal structures promoting
bottom-up participation, and members’ roles in governance.59 (MoveOn.org would
probably also have difficulty since its political operation is so much larger than its
advocacy one and its members are not specifically tied to its 501(c)(4) but to the group in
general).
Finally, the disclosure system could and should be improved. The IRS does not
adequately define its Form 990 question on political expenditures, has not issued
sufficient precedential guidance to clarify that definition and does not adequately monitor
the answers. Its “facts and circumstances” approach should be modified to provide
clearer direction to its regulated community. It does not distinguish even general
categories of donors to advocacy groups involved in partisan elections. The IRS does not
collect relevant information on 501(c) advocacy organizations’ transfers to, and
transactions with, exempt non-charities. (An added problem, which we have not
discussed, is that the current question on the form does not reveal which organization is
on which end of a transaction). Also, campaign finance law's rules on reporting of
internal political communications have not evolved to incorporate contemporary nonexpress advocacy messages. Finally, the FCC’s weak regulations on identifying sponsors
of political ads inhibit public understanding of the organizations making election
communications.
Policies towards nonprofit advocacy and the financing of political campaigns are central
to the core democratic values of freedom and equality. In this paper, we have argued that
a holistic analysis of interest group behavior is essential for achieving an adequate
understanding of campaign finance policy’s implications. We have presented evidence
that contemporary policy issues cannot be understood simply by referring to traditional
legal pigeonholes, such as “contributions,” “express advocacy,” “spending,” “PACs,”
“527 organizations,” and “501(c) advocacy groups,” and to historical assumptions about
their roles and political significance. Instead, these concepts and entities must be reanalyzed in terms of their contemporary meaning on the ground. But this is not possible
until they are seen in context. Often that context is an underlying interest group pursuing
broad policy and electoral goals through every advantageous legal vehicle available.
Without a holistic approach, analysts will fail to provide realistic alternative options for
policymakers, including possible compromise ones, or address many of the other
important questions raised by this study.
33
Endnotes
1
This language, utilized to describe certain “federal election activities” in the Bipartisan Campaign Reform
Act of 2002, is often invoked to characterize 527s’ characteristic public communications.
2
While not all social welfare, labor union and business league 501(c)s emphasize advocacy, the term is
commonly used with reference to those active on national issues in Washington, D.C.
3
Senator Harry Reid speaking on the Legislative Transparency and Accountability Act, S.2349.
Congressional Record, March 7, 2006, S185. Eliza Newlin Carney, “Rules of the Game: A Risk Worth
Taking?” National Journal, May 15, 2006.
4
Elizabeth Reid, “Advocacy and the Challenge it Presents for Nonprofits,” in Elizabeth T. Boris and C.
Euguene Steurle eds. Nonprofits and Government: Collaboration and Conflict (Washington, D.C.: Urban
Institute Press, 2006, 2nd Edition).
5
Jack L. Walker, Jr., Mobilizing Interest Groups in America: Patrons, Professions and Social Movements
(Ann Arbor: University of Michigan Press, 1991), pp. 75-102.
6
Written response by email from Carl Pope to CFI Questions, May 16, 2006.
7
See The Coalition to Protect Independent Speech, “An Open Letter to Congress Opposing S. 271 and
H.R. 513,” in Committee on House Administration, U.S. House of Representatives, 109th Congress, 1st
Session, 527 Report Act of 2005, Report 109-181, pp. 64-69; Laurence E. Gold, Lichtman, Trister and Ross
PLLC (Washington, D.C.), “H.R. 513, The ‘527 Reform Act of 2005’,” April 5, 2006; Alliance for Justice
et al. (415 nonprofit organizations), “Comments and Request to Testify Concerning Notice of Proposed
Rulemaking on Political Committee Status,” April 5, 2004; and Gail Harmon and John Pomeranz,
“Treatment of IRC Section 527 Organizations in Notice of the Proposed Rulemaking on Political
Committee Status,” April 5, 2004 (both of the latter are available at www.fec.gov under Law and
Regulations/Rulemakings).
8
See for example, Kelly Brewington, “NAACP Refuses IRS Demand for Documents; Bond Calls
Investigation Politically Motivated,” Baltimore Sun, February 1, 2005, p.1A; Jason Felch and Patricia Ward
Biederman, “Conservatives Also Irked by IRS Probe of Churches,” in Los Angeles Times, November 8,
2005; and Alan Cooperman, “IRS Reviews Church Status,” Washington Post, November 19, 2005, p.A3.
9
For an earlier CFI study that focused in part on these 527 groups, and their implications for campaign
finance study, see Stephen R. Weissman and Ruth Hassan, “BCRA and the 527 Groups,” in Michael J.
Malbin (Ed.), The Election After Reform: Money, Politics, and the Bipartisan Campaign Reform Act ( New
York: Rowman & Littlefield, 2005), pp. 79-111.
10
They are, however, subject to the overall McCain-Feingold ban on corporate and union financing of
candidate-specific TV and radio ads right before elections. n November 2004, the FEC adopted a regulation
expanding the definition of “contribution” to incorporate donations in response to solicitations indicating
“any portion of the funds will be used to support or oppose the election of a clearly identified federal
candidate.” In principle then, a 527 organization that issued such a solicitation for its political spending
could be treated as a political committee subject to contribution limits if the total donations it received
(assuming it met the $1,000 contributions threshold for political committees) were sufficient to prove that
its “major purpose” was the nomination or election of candidates. At the time the regulation was adopted,
Commissioner Scott Thomas suggested that the 527s might use solicitations that achieved their goals
without falling subject to the regulation. There has been no indication to date that the regulation has had an
effect on 527s’ fundraising. The regulation may be found at Federal Register Vol. 69, No. 225, November
23, 2004, pp. 68056-68.
34
11
Some federal PAC expenditures are not for federal elections. Among our sample groups, the PACs of
AFSCME, NRA and SEIU made significant “other disbursements” to state and local affiliates or
candidates. “Federal” 527s refers to those that are primarily or substantially involved in federal elections.
Among our sample groups’ 527s, only AFSCME’s appears to have spent a very sizeable portion of its
funds (estimated at 50% by its counsel) on non-federal elections (Letter to Steve Weissman from Robert
Lenhard, Associate Counsel AFSCME, April 25, 2005). During the 2000 cycle, NDN’s federal 527 had
little programmatic output, attributing over $3 million of its $3.6 million in spending to administration and
fundraising.
12
Deposition of Wayne La Pierre, Thursday, October 10, 2002, Washington, D.C.,in the U.S. District Court
(District of Columbia) Three Judge Court, McConnell et.al. v. Federal Election Commission et.al.,
Consolidated Case 02-0582, p. 111.
13
Frances R. Hill, “Softer Money: Exempt Organizations and Campaign Finance,” The Exempt
Organization Tax Review 32 (April 2001) p. 50; “Comments of the Individual Members of the Exempt
Organizations Committee’s Task Force on Section 501(c)(4) and Politics,” American Bar Association, May
25, 2004, pp. 19-20; Gail Harmon and John Pomeranz, Comments on “Treatment of IRC Section 527
organizations in Notice of Proposed Rulemaking on Political Committee Status (Notice 2004-6),” April 5,
2004, at ww.fec.gov under “Law and Regulations” (Rulemakings).
14
CFI Phone Interview, Dara Klassel, Director of Legal Affairs, Planned Parenthood Federation of
America, May 25, 2006.
15
IRS Revenue Ruling 2004-06, January 26, 2004.
16
CFI Interview, Michael Dubke, Executive Director and President, Americans for Job Security, May 5,
2006.
17
See, for example, Hill, “Softer Money: Exempt Organizations and Campaign Finance,” p. 50. The IRS
has made progress in a new “fact sheet” which -- though admittedly “noncomprehensive” and subject to
“the specific facts and circumstances of a given taxpayer” -- is an attempt to summarize “IRS
interpretations” of laws, regulations and court decisions not only on voter guides but also on other types of
political campaign intervention. See “Election Year Activities and the Prohibitition on Political Campaign
Intervention for Section 501 (c)(3) Organizations,” FS-2006-17, February 2006, press release, at
www.irs.gov.
18
“Statement Regarding Sierra Club’s Political Activities,”in Public Citizen, “The New Stealth PACs,”
www.stealthpacs.org.
19
CFI past interviews through its Interest Group Project with individuals knowledgeable about these
activities, and sample images from 2004 election mailings collected by the Center for the Study of
Democracy and Elections, Brigham Young University, and provided to CFI on October 25, 2005.
20
LaPierre deposition, pp. 76-77, 175.
21
Oliver Burkeman, “NRA Fires Shot for ‘Free Speech’ with Pro-gun Radio,” Guardian Foreign Press,
June 19, 2004; Eunice Moscoso “Election 2004: Both Sides on Gun Issue Target Voters; NRA Pins Bull’seye on Kerry,” The Atlanta Journal-Constitution, June 24, 2004; Sharon Theimer, “Nation’s Gun Lobby
Creating News Company,” Associated Press, April 15, 2004.
22
LaPierre deposition p. 113.
23
Internal Revenue Service, PLR 199925051, June 25, 1999 and regulations cited therein.
35
24
Deposition of David N. O’Steen, October 23, 2002, in the U.S. District Court (District of Columbia)
Three Judge Court, McConnell et.al. v. Federal Election Commission et.al., Case No. 02-0582, pp. 47, 51.
25
IRS Revenue Ruling 80-282, November 14, 1980.
26
O’Steen deposition, pp.52-53.
27
The text of this advertisement and others can be found at Public Citizen, “Stealth PAC Project,
Americans for Job Security (Election Activities)” at www.stealthpacs.org.
28
IRS Revenue Ruling 2004-6, January 26, 2004.
29
Deposition of U.S. Chamber PAC by Bruce Josten, September 11, 2002, in the U.S. District Court
(District of Columbia) Three Judge Court, Washington, D.C., pp. 198-99.
30
Dubke Interview.
31
Memorandum to U.S. Chamber Board of Directors from Tom Donohue, Subject: President’s Update—
November 2004, December 6, 2004.
32
Opening Remarks by Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce, Small
Business Summit, September 8, 2004. Available at:
http://www.uschamber.com/press/speeches/2004/040908tjd_smallbizsummit.htm
33
Memorandum to U.S. Chamber, December 6, 2004.
34
Josten deposition,, pp. 184-85, 239-40.
35
See Public Citizen, Stealth PAC Project, U.S. Chamber of Commerce (Election Activities) at
www.stealthpacs.org.; David Magelby, J. Quin Monson and Kelly D. Patterson. 2005. Dancing Without
Partners: How Candidates, Parties and Interest Groups Interact in the New Campaign Finance
Environment. Center for the Study of Elections and Democracy: Brigham Young University, p. 241.
36
Keynote address by Tom Donohue to Illinois Chamber PAC Dinner, March 11, 2002, at
www.chamber.com/press/speeches. On the estimate for 2000, see Peter H. Stone “The Blitz to Elect
Business-Friendly Judges,” National Journal, February 16, 2002, p. 480.
37
“A Union Chief’s Bold New Tack,” Business Week Online, July 28, 2004.
38
SEIU, “Anatomy of an Election Strategy: The Facts on SEIU’s Role in Bringing Home a Victory for
America’s Working Families,” Press Release, November 1, 2004 at www.seiu.org/media/press.
39
Ibid.
40
‘AFSCME Set to Barnstorm Battleground States,” AFSCME News, October 21, 2004.
41
Ibid.
42
Bryan York, “The Group Behind the Attacks on Bush,” National Review Online, September 27, 2000;
Brennan Center for Justice, “Special Interest Groups Flood Key States with Ads for Gore,” Press Release,
September 27, 2000; John M. Broder, “Finding Another Loophole, a New Secretive Group Springs Up,”
New York Times, August 10, 2000.
43
See “Comments of the Campaign Finance Institute re Proposed IRS Form 990 Changes,” Press Release,
January 28, 2003, at www.cfinst.org.
36
44
Sample images from 2004 election mailings collected by the Center for the Study of Democracy and
Elections, Brigham Young University, and provided to CFI on October 25, 2005; Klassel Phone Interview,
May 25, 2006.
45
CFI past interviews through its Interest Group Project with individuals knowledgeable about this activity.
46
Klassel Phone Interview.
47
.Public Citizen, in “The New Stealth PACs,” “Turner Foundation.” at www.stealthpacs.org. See also
Turner Foundation, Form 990 for the Year Ending December 31, 2000, Statement 11, and For the Year
Ending December 31, 2001, Schedule 18. “Ted Turner, The Forum for Women, Law and Development,
and K-MET Win PPFA Margaret Sanger Award,” Planned Parenthood, Press Release, April 24, 2006,
which refers to the fact that Turner “has contributed more than $3.5 million to PPFA for targeted prochoice organizing and advocacy;” and Turner Foundation, Inc., For the Year Ending December 31, 2002Grants Paid During the Year,” listing $1.082 million to the Planned Parenthood Federation of America “For
support to continue development of proactive campaigns, expanded implementation of technology
organizing list use and training, engagement of new choice supporters, mobilization of supporters for work
on local issues and activities and the recruitment of new supporters in appropriate areas.” In May 2000
Newsweek reported that the Turner Foundation had made, but not publicly announced, “a multi-million
dollar grant to two pro-choice groups, NARAL and Planned Parenthood, to help identify pro-choice voters
and train ’activists’ in key states where Democrats are in tight races against anti-abortion Republicans.” See
“Periscope” in Newsweek, May 15, 2000. p.4.
48
CFI past interviews through its Interest Group Project with individuals knowledgeable about this
transaction.
49
Planned Parenthood Action Fund Inc., The Planned Parenthood Action Fund Electioin Report 2000,
“National Activities,” p.7.
50
See Ibid; Thomas Edsall, “Parties Use ‘Ground War’ As Close Race Nears End,” Washington Post,
October 30, 2000, pp. A1, 16; Mark Silva, “Abortion Returning to Stage as Key Issue in Election,” Miami
Herald, October 17, 2000; and Peter Marks, “Entertainers Join Groups in Ad Effort to Lift Gore,”
November 2, 2000.
51
Email to CFI’s Steve Weissman from Dara Klassel, Director of Legal Affairs, Planned Parenthood
Federation of America, July 11, 2006.
52
CFI Phone Interview with Carl Pope, May 26, 2006.
53
Sierra Club Foundation, Annual Report 2004, pp. 2,12. Available online at
http://www.sierraclub.org/foundation/inside/2004annualreport.pdf.
54
Pope Phone Interview.
55
CFI telephone interview with Carrie Olson, May 11, 2006.
56
Olson Phone Interview.
57
Public Citizen, “Overview: MoveOn.org.,” in The New Stealth PACs: Tracking 501(c) Non-Profit Groups
Active in Elections. Available online at http://www.stealthpacs.org/profile.cfm?org_id=218..
58
Written response by email from Carl Pope to CFI Questions, May 16, 2006.
37
59
Theda Skocpol, Diminished Democracy. (Norman: University of Oklahoma Press, 2003) chs. 2 (p. 2073), 3 (p. 74-126), 7 (p. 254-293).
38
APPENDIX A:
Types of Nonprofit Organizations in Federal Elections
Organizations active in federal elections follow three different legal regimes with separate regulations.
Section 501(c)(4), (5) and (6)
Political Action Committee (PAC)
Section 527 Organization
Organizations
Legal Basis
Federal Election Campaign Act:
Non-candidate, non-party political
committee with major purpose of
influencing federal elections that
receives at least $1,000 in
contributions or makes at least
$1,000 a year in expenditures in a
calendar year.
Internal Revenue Code: Organization
with primary purpose of influencing
elections or appointments for public or
party office.
Internal Revenue Code: Organizations
with primary purpose of social welfare
promotion (c)(4), trade union (c)(5) or
business association (c)(6).
Makes expenditures that do not use
express advocacy but nevertheless
promote, attack, support or oppose
candidates and parties to public.
Makes expenditures,as secondary
activity related to its primary mission,
that do not use express advocacy but
nevertheless promote, attack, support or
oppose candidates and parties to public.
Makes contributions to
candidates (up to $5,000 per
election) and parties (up to $15,000
per election).
Major Election
Activities
Makes independent expenditures
expressly advocating the election
or defeat of candidates to public
(e.g., "Vote for," "Vote against").
May provide administrative support for
"connected" PAC and make internal
election communications to administrative
personnel, members and their families.
Individuals: Maximum $5,000/year
Corporations/Unions: Prohibited
Individuals: Unlimited
Corporations/Unions: Unlimited,
except no corporate or union funding of
TV/radio "electioneering
communications" shortly before
elections
Individuals: Unlimited
Corporations/Unions: Unlimited, except
no corporate or union funding of TV/radio
"electioneering communications" shortly
before elections
Regular, Electronic, to Federal
Election Commission
Regular, Electronic, to Internal
Revenue Service
None
Contribution
Limits
Public Disclosure
of Donors
39
APPENDIX B:
Public Policy-Related Program Achievements for 501(c) Organizations of 12 Sample Interest Groups
(Derived from Four Largest "Program Achievements" Reported on Form 990 in 2004 or Latest Available Year)
Interest
Group
CommonlyManaged
Organizations
Org.
Type
AFSCME
AFSCME
(c)(5)
Americans
for Job
Security
Americans for
Job Security**
(c)(6)
Center for
Corporate
Citizenship
(c)(3)
Chamber of
Commerce of
the USA
Chamber of
Commerce of
the USA
(c)(6)
Public Policy Program Achievements
Representing
members and
affiliates before US
Congress and their
jurisdictions through
the Political Action
and Legislation
Department.
Educating the public
on economic issues
with a pro-market,
pro-paycheck
message.
Business and Society
Relations: Research
and documentation of
business's
contribution to
society.
Education: Meetings
and research to
promote
competitiveness of
US K-12 education
system.
Research and track
issues affecting the
business community
and support probusiness legislation,
regulations, and
political activities.
Enhance the
competitiveness of
business in the global
marketplace. Lobby
for business' trade
agendas and manage
programs that
educate American
companies about
trade opportunities.
40
Work closely with
associations and
state and local
chambers of
commerce to build
awareness of and
involvement in top
policy issues and
generate grassroots
momentum.
Coalition for
Reform
Institute for
Legal Reform
(c)(6)
Supports legislative
and public education
efforts that are in
support of various
private business
interests to improve
those business
interests.
(c)(6)
Create and maintain
public support for
legal reform,
including building
alliances with groups
and organizations to
advance the legal
reform agenda.
(c)(3)
Research, public
education, and
meetings to drive the
public policy debate
on key or emerging
issues affecting the
business community.
(c)(6)
Promotes business
interests by instituting
or participating in
actions in the courts
of before any
administrative,
regulatory, or quasijudicial body.
(c)(6)
Facilitates the joint
examination of issues
in asbestos litigation
and coordinates
action concerning
these issues.
Chamber of
Commerce of
the USA
cont'd
National
Chamber
Foundation
National
Chamber
Litigation
Center
National Mass
Action Defense
Reform
(formerly
National
Asbestos
Resource
Defense
Council)
Research on the
impact of the legal
system on the
economy.
41
Ensure enactment of
common sense legal
reform legislation and
promote the selection
of pro-legal reform
judges and other
public officials.
Club for
Growth
MoveOn.org
Club for Growth
Advocacy**
MoveOn.org
Civic Action
(c)(4)
(c)(4)
Economic Growth
Education: To
promote social
welfare and the
common good by
providing information
on how to improve
the nation's economy,
provide more
employment at better
rates of pay, and how
to improve Social
Security.
Public Education and
Outreach: Informing
our members and the
general public about
current issues and
opportunities to make
a difference,
including efforts to
influence executive
activation…. The
largest expenditures
were for mass media
advertising that
educated the general
public about topics
such as global
warming, mercury
poisoning, weapons
of mass destruction
and the truth of Iraq,
seeking to influence
executive branch
decisions.
Legislative Advocacy:
Informing our
members and the
general public about
opportunities to
influence legislation,
and discussing
legislation with
various government
officials.
MonveOn.org
activated segments of
its email membership
list over a hundred
times during the year
using inexpensive
internet connectivity
techniques and
functions, to lobby
Congress and other
officials on issues
falling generally within
the four categories of
peace, energy and
environment,
economic and tax
policy, and general
civic engagement.
42
Organizing
(Partisan): Working
with other groups to
develop strategies for
stopping the rightwing political agenda,
and maintaining hope
among the public that
it can be stopped,
through advertising,
etc. Major
expenditures in this
category … consisted
mainly of advertising
and public relations
activities aimed at
influencing the voters'
views of President
Bush and his policies,
and assistance to
other groups,
classified as partisan
due to the content of
the message and/or
the targeted
placement of activity.
(c)(4)
Member services:
Dissemination of
information on
programs and
services; promote
membership,
including recruitment
and renewal;
communications with
general public.
NRA Civil
Rights Defense
Fund
(c)(4)
Legal assistance and
grants for the
representation of
individuals where
issues in litigation are
directly related to the
preservation of the
human, civil, and/or
constitutional rights of
the individual to keep
and bear arms.
The NRA
Foundation Inc.
(c)(3)
None reported
NRA
National Rifle
Association
National
Right to Life
Committee
Inc.
National Right
to Life
Committee Inc.
(c)(4)
NRL News is a
monthly 12-16 page
newspaper covers
pro-life issues for
grassroots activists,
journalists,
academics and social
scientists.
Publications:
Publishes magazines
and journals and
television shows
available to members
and general public to
support NRA
objectives.
Public affairs:
Communicates with
general public.
Disseminates info on
NRA objectives
through media
appearances,
seminars, public
forums and written
materials.
Institute for
Legislative Action:
Protects and
defends the US
Constitution by
advocating against
federal and state
legislation
adversely affecting
the second
amendment.
State development
and membership
organization: assist
state affiliates to
develop functioning
chapters in every
legislative district;
includes technical and
field assistance,
educational and
legislative strategy
and event planning
assistance.
Federal and state
legislative activities:
programs that
advance NRLC's
public policy goals.
Prepare written
materials on policy
issues, coordinates
grassroots lobbying
efforts, develops
programs against
abortion and
euthanasia. Assists
state affiliates.
Public relations and
public awareness:
programs that
educate the public
on abortion,
infanticide and
euthanasia through
the media, including
placing ads,
producing and
promoting
broadcast programs
as well as longformat radio and TV
programs.
43
National
Right to Life
Committee
Inc. cont'd
National Right
to Life
Conventions
Inc.
National Right
to Life
Committee
Educational
Trust Fund
The Horatio R.
Storer
Foundation, Inc.
New
Democrat
Network
N/A
Educational
workshops held at
the annual National
Right to Life
Convention.
Program journal of the
annual National Right
to Life Convention.
Convention banquets
and prayer breakfast
held at the annual
national Right to Life
Convention.
(c)(3)
General public
information: provides
reference services
and presents displays
of pro-life educational
materials; provides
extensive packets of
free information.
Legal defense:
develops pro-life
strategy to overturn
Roe vs. Wade and
protect unborn life.
The legal defense
fund implements this
legal strategy through
litigation briefs and
scholarly law review
articles.
National Right to Life
News: A 12-16 page
newsletter covering
news on pro-life
issues, education and
organizational
information.
(c)(3)
Co-sponsored
publication of "Issues
in Law and
Medicine,"
a bi-monthly journal
to inform members,
professionals,
schools and the
general public of
issues confronting
the medically
dependent and
disabled.
Research to promote
right to life social
values.
(c)(4)
No Reporting 501(c)
for relevant periods
44
State education
development:
preparation of
administrative and
educational
material for state
right-to-life
organizations.
Adolescents:
Programs and
services to ensure
that all adolescents
and young people are
aware of their sexual
and reproductive
rights, are
empowered to make
informed choices
regarding their sexual
health and are able to
act on these choices.
International
Planned
Parenthood
(c)(3)
Core Programs
Member
Associations: Grant
for core programs,
services and other
operations to achieve
their overall social
missions of improving
sexual and
reproductive health.
Planned
Parenthood
Action Fund
(c)(4)
Public education and
advocacy.
Planned
Parenthood
Federation of
America
(c)(3)
Service to nonaffiliates (USA) -programs designed to
ensure the
Federation's
leadership in serving
the entire family
planning field,
including advocacy,
medical services and
education
International
assistance -programs designed to
advance the
reproductive health
and rights of women
and their families
outside the US
The Alan
Guttmacher
Institute
(c)(3)
Policy: Relevant
research, domestic.
Professional and
public education,
domestic.
(c)(3)
Domestic-centered
programs designed to
assist the
Federation's
leadership in serving
the entire field of
family planning and
reproductive choice,
including advocacy
medical services and
education.
Planned
Parenthood
The Planned
Parenthood
Foundation
45
HIV/AIDS/STIs:
Programs and
services to ensure
the full protection of
the rights of people
infected and affected
by HIV/AIDS/STIs
and the reduction in
the global incidence
of these conditions.
Professional and
public education,
international.
Access: Programs
to ensure that all
people, particularly
the poor,
marginalized, and
underserved, are
able to exercise
their rights, make
free and informed
choices about their
sexual and
reproductive health,
access sexual
health info,
education &
services.
Progress for
America
(c)(6)
Progress for
America
Progress for
America Inc.
(c)(4)
SEIU
(c)(6)
SEIU
SEIU Support
and Education
Fund**
(c)(3)
Established a toll-free
800 number that
businesses and
citizens may use to
contact the
organization for
information about
economic issues of
concern to the
business community.
Communicated
directly with
American citizens
through direct mail,
blast faxes, printed
materials, paid media
and other public
relations materials
with respect to
important policy
issues (tax cuts,
trade, education and
crime).
Supporting labor
organizing efforts for
member's affiliates
and improving
affiliated members'
health and laborrelated issues.
Conduct a
nonpartisan get-outthe-vote drive and
other activities to
educate children and
their families about
the importance of
voting (Sierra Club)
Maintained and
enhanced website
with information and
materials on trade,
energy, education
reform, tax cuts and
other issues. Contains
fact sheets,
speeches, articles,
new developments,
research materials
and links.
Identify and
recommend qualified
candidates who are
committed to
promoting responsible
corporate behavior to
the boards of public
pension fund
(Rockefeller
Foundation)
46
Sierra Club
Sierra Club*
(c)(4)
Studying and
influencing public
policy: staff and
volunteers engage in
legislative and nonlegislative activities,
including research,
education, lobbying,
legal and policy
development.
Information and
education: literacy
programs of Sierra
Club Books and
SIERRA, the
organization's
magazine.
Membership: support
and funding of 66
volunteer chapters
and approximately
390 groups, and the
development of a
broad-based
volunteer
membership.
Provides grants to
support charitable,
educational, scientific
The Sierra Club
(c)(3) and literary
Foundation
endeavors that
enhance the natural
environment.
* In the case of Sierra Club, The Sierra Club reports no common management but the Sierra Club Foundation reports the following as its primary
purpose: “Support of the Sierra Club and other conservation organizations and individuals through grants to support charitable, educational,
scientific, literary and legal endeavors."
** Latest year available for this organization is 2003.
Source: IRS Form 990, Part III: Statement of of Program Service Accomplishments.
47
APPENDIX C:
Individual Donors to Sample Interest Groups' 527s and Their Contributions to Federal Political Committees
(Candidates, Parties, PACs) for the 2002 Cycle
I
Individual Donors to Group 527s ("Soft Money")
527 Committee
# Donors 5K & Up
Median Amount by
Donor
$ to 527
Mean Amount by
Donor
Club for Growth Inc.
112
3,458,750
10,000
17,557
New Democrat Network - Non-Federal
21
368,000
10,000
14,185
Planned Parenthood Votes
5
36,082
5,000
7,216
Sierra Club Voter Education Fund
16
1,075,000
22,500
39,815
Total
154
4,937,832
II
Individual Donors to Group 527s Who Also Contributed to Federal Political Committees* ("Hard Money")
527 Committee
# 527 Donors who
gave to Fed. Comm.
or Party NF.
$ Contributed to
Fed. Comm or Party
NF
Mean Amount by
Donor
Median Amount by
Donor
Club for Growth Inc.
107
2,900,749
27,901
New Democrat Network - Non-Federal
21
2,749,568
137,303
33,875
17
Planned Parenthood Votes
2
41,550
20,775
20,775
20
Sierra Club Voter Education Fund
16
1,970,000
122,516
17,625
16
146**
7,661,867
Total
9,800
Mean # of Contribs
by Donor
11
**
* Federal political committees are those with the major purpose of influencing federal elections and receiving contributions or making expenditures of at least $1,000. They include
candidate, party and political action committees. Up to now, "major purpose" has been determined on the basis of contributions made and "express advocacy" spending.
** Amount does not equal the total of donors to all groups added together, as some donors gave across groups, making the unque number of donors and the total amount given less
than the total.
Source: Compiled from FEC data; 527 disclosure reports filed with the IRS (2004 cycle); and 527 data provided by the Center for Public Integrity (2000 & 2002 cycles).
48
APPENDIX C Continued:
Individual Donors to Groups' 527s and Their Contributions to Federal Candidates and Parties for the 2002 Cycle,
by Party Affiliation
House
527 Group
Club for Growth
Senate
Party
Orientation
of 527
Dem
R
17,444
503,940
15,944
Rep
Dem
Party
Rep
Dem
Rep
295,450
9,250
1,760,107
New Democrat Network - Non-Federal
D
77,000
9,500
102,613
5,500
1,900,297
468,358
Planned Parenthood Votes
D
10,950
0
8,100
1,000
13,500
0
Sierra Club Voter Education Fund
D
59,050
1,500
74,800
0
1,681,650
0
Note: Amounts will not add up to totals for each category (House, Senate, etc.) as some small amounts were given to minor party candidates and committees.
Source: Compiled from FEC data; 527 disclosure reports filed with the IRS (2004 cycle); and 527 data provided by the Center for Public Integrity (2000 & 2002 cycles).
49
APPENDIX D
DATA SOURCES
•
IRS Form 990 annual information returns filed by all 501(c)(3), (c)(4), (c)(5)
and (6) organizations of the interest groups in the study between 1999 and
2004. These included Schedule A, filled out only by the (c) (3) entities. Forms
were obtained from the groups themselves and from the IRS.
•
IRS financial data on 527 organizations associated with the interest groups
over the same period (full cycle information was not available for 1999-2000).
•
FEC financial data on PACs, Qualified Non-Profit Corporations and internal
“communication costs” related to the interest groups.
•
FEC data on contributions to federal political committees by individuals
whom the IRS reported as donors to the interest groups’ 527 organizations in
the 2002 and 2004 cycles.
•
A database provided to CFI by the University of Wisconsin Political
Advertising Project of candidate-specific political ads by interest groups
directed at the candidates’ constituents in the 2000, 2002 and 2004 national
elections.
•
Previously published analyses by the Center for Study of Elections and
Democracy (CSED) of interest group activity in the 2000, 2002 and 2004
federal elections in sample districts and states
•
An unpublished CSED database provided to CFI of direct mail from many of
these interest groups in 2002 and 2004 sample election races
•
Federal court depositions by some of our interest groups’ representatives in
the FEC v. McConnell federal district court case during 2001-02 concerning
the Bipartisan Campaign Reform Act of 2002.
•
Press reports, elections studies, interest group websites, group entities’ public
annual reports, and similar sources.
•
Interviews with representatives of five of the 12 groups. The following groups
declined interviews with their leaders or other representatives: AFSCME,
Chamber of Commerce, Club for Growth, NRA, NRLC, NDN, and SEIU.
We also benefited from earlier pilot studies of interest groups showing the utility of
certain information from 990 forms conducted by Betsy Reid and Janelle Kerlin of the
Urban Institute, and from previous interviews with representatives of several of the
groups by CFI staff as part of CFI’s separate and ongoing Interest Group Project.
50