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Super Rich Step Into Political Vacuum

McCain-Feingold Paved Way for 527s

By James V. Grimaldi and Thomas B. Edsall
Washington Post Staff Writers
Sunday, October 17, 2004; Page A01

This was going to be the year -- thanks to the 2002 campaign finance law -- when big money lost its influence in American politics.

But if the election comes down to which presidential candidate is better at getting supporters to the polls, the huge donations of a handful of wealthy liberals named Linda Pritzker, Stephen L. Bing, Peter B. Lewis and George Soros could determine the outcome. Together, they have given more than $26 million to help finance the most extensive get-out-the vote operation in history, the goal of which is to make John F. Kerry president.

Volunteers work in the America Coming Together offices in Springfield, Pa., to get out the vote for John F. Kerry. (Rikard Larma -- AP)

Soft Money Game
_____Doner List_____
Biggest Donors to 527 Groups
_____In Today's Post_____
After Late Start, Republican Groups Jump Into the Lead (The Washington Post, Oct 17, 2004)

The recipient of the largess, America Coming Together (ACT), is one of the so-called 527 organizations playing a crucial role in the presidential campaign. Named after a section of the tax code, the 527 groups are doing much of the advertising and field work traditionally left to party organizations.

This election year, the groups have become the main way for the wealthy to affect events. Six of the top 10 donors to 527 groups are billionaires, and all are on Forbes magazine's list of richest Americans. Eight dollars out of every $10 collected from individuals by Democratic-leaning 527 groups have come from donors who have given at least $250,000 each, according to an analysis by The Washington Post of data on 527 donations maintained by Center for Public Integrity.

Until recently, virtually all the money going to 527s went to Democratic groups. But in the last few months, Republicans have balanced the equation, collecting $1 out of every $3 raised through such groups as the Swift Boat Veterans for Truth, according to the Center for Public Integrity. Their donors have followed the same pattern as the Democratic ones: $9 out of every $10 collected by the GOP groups have come from people who have given more than $250,000 each, according to the latest data available from the Internal Revenue Service.

In the most recent filings of 527s to the IRS for the third quarter of 2004, pro-Republican groups outraised their Democratic counterparts $62.8 million to $36.5 million, including organizations financing both television ads and get-out-the-vote activities.

Among the first GOP givers were Carl H. Lindner Jr. and A. Jerrold Perenchio, both top Bush fundraisers known as "Rangers." They were quickly followed by other Rangers such as Alexander G. Spanos, $5 million, and Dawn Arnall, $5 million.

These big donors have stepped into the vacuum created by the continuing controversy over the role of the 527s. By banning the use of large "soft money" contributions to party organizations, the McCain-Feingold campaign finance law essentially made 527s the only conduit for unregulated and unlimited contributions. But many traditional sources of big money -- corporate chieftains and companies such as Microsoft, Boeing and General Electric -- have been reluctant to give to them for fear of becoming entangled in lawsuits challenging the legality of the groups.

In their place, two dozen superwealthy and largely unknown men and women have emerged as key contributors, each giving more than $1 million. They espouse an eclectic mixture of causes and ideological motives. Among the pro-Democratic donors are Pritzker, a Hyatt hotel heiress who founded a Buddhist enclave in Montana; Bing, a Hollywood producer with a highly publicized love life; and Lewis, an insurance executive who has spent millions trying to legalize marijuana.

Only Soros, a Hungarian immigrant whose hedge fund investments have given him a personal wealth estimated at $7.2 billion, has been willing to publicly discuss his reasons for spending so much to defeat President Bush, and whether he intends to continue giving to political groups. He said in a recent interview that he regarded the 2004 election as "an exceptional" one, and that after it is over, "I hope to return to the more less-engaged, less-participatory position that I had before."

But not before setting a record for the most money donated by an individual in an election cycle. Soros has now given almost $24 million to more than half a dozen groups, including $10 million to America Coming Together and its fundraising committee since Aug. 1, according to records filed Friday and data released by his office.

While ACT says it has worked hard to develop a list of hundreds of thousands of grass-roots supporters, 91 percent of contributions to ACT's 527 committee have come from donors giving $100,000 or more, according to a Washington Post analysis of ACT's donations, including ACT's disclosure report filed Friday. Separately, ACT's political action committee has collected $24 million in $5,000 or less contributions.

The founders of the biggest 527s -- ACT and The Media Fund -- vow to continue after the election. But the form and size of what survives is in doubt given the uncertainty over the future intentions of donors such as Soros, and pressure from advocacy groups, the Federal Election Commission and, until recently, the Republican Party, to diminish their power.

Their impact, however, will soon be clear. ACT says its 4,078 employees have registered 450,000 voters, and ACT's partner, America Votes, sets their voter-registration tally at more than 2 million. On Election Day, ACT says it will put 45,000 people on the street trying to get these new voters to the polls in crucial cities such as Akron, Ohio, Philadelphia, Milwaukee and Portland, Ore.

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