ElectionFinance.net

In “Stealthy Groups Shake Up Races“, The Wall Street Journal writes about the various outside organizations that are spending lots of money this election outside of candidates and their campaigns:

Since the 2002 campaign-finance reforms, people who want to influence elections have looked for new ways. Most of their early organizations, like the Swift Boat group, were formed under section 527 of the tax code. They could spend unlimited dollars on elections, but had to disclose their donors. They also weren’t allowed to directly ask people to elect or defeat candidates.

Campaign finance lawyers next employed section 501(c)4 for “social welfare” groups, which don’t have to disclose their donors. But most still can’t advise people to “vote for” or “vote against” a candidate — though they can challenge candidates’ stands.

Then the lawyers began suggesting outside groups can have the best of both worlds if they start a 501(c)4 group and claim an exemption under the 1986 Supreme Court case. They can hide their donors — though they can’t take union or corporate money — and can directly call for the election or defeat of candidates. They just have to attest that they spend a majority of their funds on issues instead of candidates. “I’ve been recommending this to people for years,” says Cleta Mitchell, a campaign-finance lawyer who advises Mr. Davis.

The Federal Election Commission hasn’t tracked the number of groups claiming the exemption, or their spending. Just a handful showed up in a sample of electronic FEC filings reviewed at The Wall Street Journal’s request; their spending increased by 43% between the 2002 and 2006 congressional elections, to about $509,000, while in the 2004 presidential election they spent just under $1 million. No reliable figures for the 2008 election are yet available.

(See the WSJ report for more graphs and a description of one 501(c)4: “Trust Huckabee”).

Meanwhile, as for candidates and their campaigns, Reuters reports that “Corporate America is pouring money into the U.S. presidential campaign at an unprecedented rate, with a torrent of donations coming from the businesses behind the subprime mortgage crisis.”