Television advertisements attacking U.S. presidential candidate John Kerry's Vietnam war record have generated a lot of controversy in the U.S. over the last several weeks. Those ads and many others like them, are not paid for by candidates. They are funded by independent groups, not directly connected to a political party or campaign. They are known as "527s," for the number of the section of the U.S. tax laws that allows them. Critics want the ads stopped, while proponents say they should be allowed under Americans' right to free speech.
Two and a half years ago, after much debate in the U.S. Congress, the "Bipartisan Campaign Reform Act of 2002" became law. The legislation, designed to change the way federal campaigns are financed, bans large individual donations to political parties and candidates. But soon both Democrats and Republicans found a way to get around the restrictions - a loophole in the U.S. tax laws. Section 527 allows groups to raise and spend unlimited amounts of money for campaign purposes, as long as those groups are not formally tied to a political party or candidate. Steve Weissman of the non-partisan Campaign Finance Institute in Washington, D.C. says very rich individuals are giving a great deal of money to these groups.
"In America the campaign finance regulations prevent people from giving contributions over a certain amount," Mr. Weissman explains. "For example, you can't give more than $2000 to a candidate for federal office, but using a 527, as long as you don't say vote for that candidate, vote against that candidate, but you can still put forward a lot negative or positive information about the candidate, you can spend any amount of money you want. Some people are spending more than $10 million in order to get their views on the candidate expressed through a 527 group."
Democrats and Republicans alike are using the groups to fund harsh campaign ads against the other. The most visible current example is the so-called "swift boat ad," attacking Democratic presidential candidate John Kerry's Vietnam War record.
It was paid for by a 527 group called "Swift Boat Veterans for Truth." Steve Weissman says it is typical of the controversial ads.
"This is an example of an advertisement which is not formally called a campaign ad, it isn't something that is saying vote for John Kerry, vote against John Kerry, but it can have at least as much influence in politics, and on how people vote, as any regular campaign ad," Mr. Weissman says.
Analysts say supporters of Democratic candidates were the first to exploit the tax code loophole and they continue to do so.
MoveOn.org, an internet-based group, recently launched a series of celebrity TV ads - which call on voters to get George Bush out of office. The group is releasing a new ad each week up until the presidential election in November.
Recent public opinion polls suggest President Bush may be benefiting from 527 ads, especially the Swift Boat ad. But its negative tone prompted calls for Mr. Bush to condemn it. Instead, he called for a ban on all such advertising and is joining Republican Senator John McCain, one of the sponsors of the 2002 campaign finance reform legislation, in a lawsuit against the Federal Election Commission to block all 527 ads. Steve Weissman says a lawsuit against a federal agency is a long and complicated process, and is unlikely to get the ads stopped any time soon.
"They seem to be very important in this election and there's no chance that they will be cut off before this election occurs," Mr. Weissman says.
But as Democrats and Republicans work to get their candidate for president elected, the debate is sure to continue, over whether the actions of 527 groups should be regulated.