by Alex Ben Block
31-May-04
published by Television Week

Over the next six months the TV advertising marketplace will get a billion-dollar-plus windfall, thanks to a loophole in federal campaign finance laws that has opened the door for a new generation of issue-oriented political committees.

They are known as 527s, after the IRS code that also declares them nonprofit. As long as there is no direct link to a candidate-even if there are obvious personal or business connections-527s can raise unlimited sums of money well over established federal campaign law limits to pursue a political agenda. And in most cases there is no requirement to make public the names of donors or how much they contributed. The only reporting is to the IRS and is done out of public view.

Federal candidates normally are limited to accepting a $2,000 individual donation. The average donation to a 527 in the 2000 election cycle was more than $20,000, and some gifts have been in the millions. This takes political power out of the hands of the people and opens the door for the rich and powerful to take charge.

Since the last election, legislation has been passed called the Bipartisan Campaign Reform Act, which was supposed to shut down this kind of "soft money" in politics. The number of 527 committees actually dwindled after 2000 in anticipation of a clampdown by the Federal Election Commission. Instead, on May 13 the FEC said it would not rule on the validity of these committees until after the November election, opening the door for 527s to play a key role this year.

In the past, the 527s were minor league because the big money was spent by businesses seeking to buy access and make connections to enhance their commerce. The "politician 527 groups," as they are known, are driven purely by ideology. Now with reform, and in a charged partisan atmosphere, the 527s emerge as tremendously important. They are a legal way to get out a message, mobilize voters and, often, place negative ads.

"We're really in new territory with these kinds of groups," said Aron Pilhofer, editor at the Center for Public Integrity in Washington. "Most have been formed to influence the presidential race. This hasn't really happened before."

During the recent primary season, most of the 527s supported Democrats. The Republicans, led by the White House, opposed their very existence. The president has been able to raise almost $200 million without "soft money" donations.

Now, however, with the May 13 decision, Republicans have said publicly they will actively form 527 committees as well, which are expected to spend millions on TV ads between now and November. James Francis Jr., who helped President Bush raise millions through the Bush Pioneers program in the last election, is now chairing Progress for America, a Republican group that will focus on forming 527 committees to counter those supporting Democratic contender Sen. John Kerry.

The likely closeness of the race for president and the clear differences between the candidates-more than in many recent elections-drive passions that are being turned into cash. Many of the issue ads relate directly to very different positions held by each of the candidates-which makes them de facto campaign ads.

The situation has also been fueled by the Federal Communications Commission's refusal to deal with 527s, according to Meredith McGehee of the Alliance for Better Campaigns in Washington. "If the FCC would enforce existing laws this could be corrected," Ms. McGehee said. "Instead, the people on the FCC, who didn't like the reform bill to start with, have made a conscious decision not to enforce their own rules. They are allowing this money to flood into the market. ? This sends a pretty clear signal that it is the wild, wild West out there."

The alliance, with a bipartisan board that includes Walter Cronkite and former President Gerald Ford, advocates as a counter to advertising a return of the concept of public trust in broadcasting. The group believes this would force local and network stations to put more news and public affairs programming across their schedules, thus doing a better job of informing the public.

"The lack of real news about what is going on politically tells voters it is all about the politicians, not about them," Ms. McGehee said. "TV in the 21st century [by not covering many political stories] is telling voters that politics is not important. And then the little bit they do get turns them off. ? This is very dangerous for a democracy."

Most political advertising, until this campaign, has been on network TV or specific local broadcast stations. "What has happened is that President Bush has so much money to spend that he has bought cable TV advertising as well," Ms. McGehee said. "They are after a much more narrowly based group. You can only do that if you have the money."

The odd thing is that the $50 million already spent this year on campaign and issue ads appears to have had little effect on the races. There is a general cynicism among voters, who often don't trust political ads.

However, that doesn't mean the ads don't have impact. A study by the Annenberg Public Policy Center of the University of Pennsylvania, conducted in April and early May, surveyed 1,026 people in 18 "battleground" states-where the presidential vote could go either way. The conclusion was that while voters say they don't trust TV commercials, many do absorb and believe what they see-even when some of it is actually inaccurate.

Records will be broken this election year both for direct campaign donations and for soft money. The very presence of this kind of overkill advertising, even when it is of dubious value, adds to the unease of many citizens and gives them the sense they are right to be cynical about the whole process. Ads don't replace balanced news reporting. Instead they create a feeling that voters are perceived as not too bright by those who would govern.

The reality is quite different. As Thomas Jefferson put it long ago: "I know of no safe depository of the ultimate power of the society but the people themselves. And if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion." #