Old parties learn new tricks

Governors' 527s gave $13.2 million to state parties in 2004

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Missouri became a hotbed of activity for 527s—the political groups that had an outsized impact on the 2004 election season by funding controversial advertisements and organizing voters outside of the traditional party system. The Missouri Democratic Party, which bills itself as the "oldest political party west of the Mississippi," took in $3 million from the Democratic Governors' Association in 2003 and 2004.

Missouri is one of 13 states that allow unlimited contributions from all sources. Joe Carroll, the campaign finance director at the Missouri Ethics Commission, was not fazed by the influx of money.

"This election, we had an open seat for governor, lieutenant governor, secretary of state, and state treasurer," Carroll said. He mentioned that two of Missouri's seats in Congress were also open. "Those were in the largest metropolitan areas in the state. Those are expensive media buys there."

To support expensive media buys on their side of the aisle, the Republican Governors Association shifted $1.8 million to the Missouri Republican Party for the 2004 cycle.

That money turned out to be well spent. In a fiercely contested race, Republican Matt Blunt was elected governor over Democrat Claire McCaskill, Missouri's state auditor.

To operate outside the limitations set up by campaign finance regulations, these state-oriented groups—the DGA and the RGA—severed affiliations with their respective national party committees and organized as 527s. As a result, these two groups can accept the kind of soft money contributions that are no longer permitted at the federal level. Those types of donations cannot be given to federal candidates or political parties.

"We thoroughly review all state election laws prior to making any spending decisions, and fully comply with all federal and state laws and regulations," wrote Ben Jenkins, the RGA's press secretary, in an e-mail to the Center for Public Integrity. "Unlike many upstart or short-lived '527 groups' established to affect specific elections, the RGA is an established organization focused on supporting and electing Republican Governors."

The DGA declined the Center's requests for comment on this report.

The two organizations dole out funds to state parties for voter mobilization and party organization. The DGA gave $9.4 million to them for the 2004 election, making it the second largest organizational donor to state political parties. The DGA lavished the most money on the Missouri Democratic Party, followed by its counterparts in Washington, New Hampshire, Montana and Delaware. The RGA gave $3.8 million to state parties—the sixth largest organizational donor to them nationwide—focusing on Missouri, Mississippi and Washington.

While the DGA channeled a substantial amount of its funds through its state parties, the RGA brought in top political consultants and media firms, such as Sandler-Innocenzi and Mentzer Media Services. During 2003 and 2004, the DGA gave to 17 state parties across the country; the RGA gave only to five.

"[The] 527s provided a very reinvigorating approach to get Democratic activists up off their haunches," said Prof. Larry Sabato, the director of University of Virginia's Center for Politics. "I think a lot of Democratic donors, big and small, were disillusioned with the party organization."

Throughout the 2004 cycle, the DGA raised $24 million; the RGA raised $34 million.

The DGA took in six-figure donations from a number of unions, such as the American Federation of State, County, and Municipal Employees, the National Education Association and the Service Employees International Union. As reported in The Seattle Times, several big donors to the organization were law firms and attorneys linked to Washington Gov. Christine Gregoire, who was the state's lead attorney in the state's tobacco litigation during the late 1990s. Many of the DGA's sizable contributors benefited from the multi-billion dollar lawsuit settlement.

The RGA drew funds from various business interests, taking in hundreds of thousands of dollars from Citigroup, Pfizer and tobacco company UST.

Even newer tricks

While the Republicans used the RGA and another 527, the Republican State Leadership Committee, to help with state party finances, the Democrats got help from more 527s at the state level.

"My guess is that the Democrats have not succeeded in building a list of small to moderate donors like Republicans, so they rely on these institutions," said Prof. Raymond La Raja, a campaign finance expert at the University of Massachusetts at Amherst.

Grassroots Democrats, one of these 527 groups, gave more than half a million dollars to state parties in Arizona, Iowa, and New Hampshire, among others. Its leadership is filled with prominent Democratic politicians and consultants, such as Pennsylvania Gov. Ed Rendell and former DNC chair Don Fowler, while the group's major donors are the Association of Trial Lawyers of America and several national unions.

MoveOn.org and America Coming Together, brand-name 527 groups since this last election, contributed to state races as well. The two groups contributed more than $400,000 altogether to Democratic parties in Florida, Nevada, Texas, and Washington.

Another 527 group, 21st Century Democrats, gave nearly $400,000 to state parties, primarily in Minnesota. While helping to win numerous races for Democrats in Minnesota's legislature, 21st Century also earned itself the largest campaign finance fine in the state's history for not properly registering as a political committee.