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527s Open Up Faith-Based Money Nightmare

The New York Times has an excellent article this morning about the 527 organizations that are working on behalf of, but with apparent independence from, the Barack Obama for President campaign.

With a little bit of a wink and a nod, Barack Obama pleads with people who donate to these groups, such as Vote Hope and PowerPAC, to donate to his official presidential campaign instead – so that his political consultants can take their cut of the money, perhaps. Yet, Barack Obama must know that such donations to an official political campaign are often impossible, due to campaign finance law.

Consider the donation of $95,000 to Vote Hope and PowerPAC by lawyer Steve Phillips. Phillips is able to casually toss out that amount of money in part because he is the son of a billionaire. “We have a chance to make an impact… You need a dedicated organization with a dedicated revenue stream.”

Yes, wealthy people like Steve Phillips have a special ability to make an impact, with their dedicated revenue, that the rest of us don’t have. That’s because the right wing Supreme Court last year made invalid part of a campaign finance law that blocked 527s, with their secret and unlimited sources of money, from getting involved in political campaigns for public office. Now, 527s can spend as much money as they want to, and take money from whatever people or corporations they want to, and they don’t have to tell where their money comes from.

So, Steve Phillips can now donate $95,000 to Vote Hope and PowerPac, whereas if he were donating to the Barack Obama campaign, he could only donate a little bit over two thousand dollars, and no more. With 527s able to operate without the restrictions of the official campaigns, wealthy people like Steve Phillips are able to buy as much influence over the presidential elections as they care to.

Other power brokers that once were held back by campaign finance law are also now able to buy their way in. Corporations can give. And what about churches?

Yesterday, I wondered how Barack Obama managed to perform so much better in the South Carolina primary with heavy churchgoers than with voters who only occasionally go to church and those who never go to church. The New York Times article this morning provides what could be part of the answer: Vote Hope and PowerPAC paid for targeted radio advertisements promoting Barack Obama in South Carolina. Those radio ads featured ministers from South Carolina churches.

The 527 organizations provide these church leaders with a legal loophole. Because their churches have tax exempt status, these ministers are not allowed to use their churches’ special tax-free power to promote political candidates. But now, it seems that the ministers are using their special status, facilitated by taxpayers, to support 527s, which in turn support political candidates. It’s the equivalent of having a fake offshore corporation in the Bahamas to avoid paying taxes.

And what about church money? Is church money going into 527 organizations, which in turn promote presidential candidates?

Well, we don’t know. We can’t know. 527s can take money from wherever they want to, including tax-exempt organizations such as churches, and are under no obligation to reveal where their money comes from. Churches could be donating money to 527s, which then spend that money to promote presidential candidates, and we would never know about it. Sure, it’s against tax law, but if the donations are undisclosed, then how’s the IRS ever to find out about it?

Churches are at risk, when they are led by unscrupulous preachers, of being used as shadow fundraising operations for political campaigns. In this sense, the rising power of 527 organizations in the presidential campaign does not just threaten our government’s independence from influence of wealthy individuals and corporations. The separation of church and state is threatened as well, as political candidates find that their fortunes rise and fall according to the success with which they pander to wealthy and influential churches.

We now know that Barack Obama’s victory in South Carolina took part with the assistance of church leaders, and that the core of his votes came from habitual churchgoers. How much longer, with this growing involvement of churches in presidential campaign, will it be before no candidate will be able to become President of the United States without approval from the nation’s most powerful churches?

The mechanisms are in place. The churches now only have to learn how to use them.

8 comments to 527s Open Up Faith-Based Money Nightmare

  • How much do you want to bet that the next Democratic President does not close the White House Office of Church Kickbacks (oops, I mean the White House Office of Faith-Based Initiatives)?

  • Jim

    Why, look, it’s Mike Huckabee getting money directly from Kenneth Copeland Ministries! Well, no, let me correct myself: you see, Kenneth Copeland stopped in the middle of a ministerial conference, said, hey, let’s stop the meeting and reconvene as a set of private individuals, right here in the same room, and then let’s give Mike Huckabee our money, and then reconvene as a ministerial conference. Uh-huh. Thank you, Jesus, for that big fat loophole, and for the blessings of tax-exempt status.

  • Joe Mama

    Sorry, but the whole premise of this post (that 527s pose the threat of a “faith based money nightmare”) is simply and demonstrably false.

    The law has required 527′s to publicly disclose their receipts since 2000, and those reports (including reports from Vote Hope) are searchable and available on-line at http://forms.irs.gov/politicalOrgsSearch/search/basicSearch.jsp

    What else you got?

  • Well, for one thing, “Joe”, that’s not the “whole premise of this post”.

    You’re not addressing the problem of church donations to 527 organizations that are dedicated to electing candidates.

    You’re also not addressing the problem that the donations are unlimited.

    I got that, and you’re very conveniently overlooking it, Joe.

  • For another thing, the IRS doesn’t allow me to search according to donor, does it, Joe Mama?

  • And yet another thing, the latest forms available are for those that were submitted in JUNE of LAST YEAR as an addendum to forms submitted in APRIL of LAST YEAR. At this rate, voters will be able to know about the 2008 donations to these 527 organizations HALF A YEAR AFTER the election is over.

    That’s why these 527 organizations are able to influence an election with donations that are operationally non-disclosed.

  • Oh, and another thing, “Joe”: Where are forms that show what the 527 organization is spending to promote political candidates, and what candidates the organization is promoting?

    The information isn’t there with the IRS search, and it isn’t on the FEC web site either – only the official campaigns run by the candidates themselves, and PACS – like PowerPac, which doesn’t show any expenditures on behalf of anybody, and like Vote Hope used to be.

    Yes, you can search for Vote Hope on the FEC web site, and find that there was a PAC with that name, which is not legally the same organization, but which did make the following donations to Barack Obama (and never gave to anybody else):

    OBAMA, BARACK 05/23/2007 443.00 27931025782
    OBAMA, BARACK 05/23/2007 800.00 27931025781
    OBAMA, BARACK 05/23/2007 1049.00 27931025783
    OBAMA, BARACK 05/23/2007 1650.00 27931025780
    OBAMA, BARACK 06/06/2007 1000.00 27931025781
    OBAMA, BARACK 06/07/2007 2527.00 27931025782
    OBAMA, BARACK 06/07/2007 3922.00 27931025780

    Dear me! All in 2007, right up until June 2007, when the Supreme Court made its ruling that 527 organizations could operate with operationally non-disclosed donations within the period of an election, and without revealing their spending, etc., etc.

    Right around the time of that Supreme Court ruling, Vote Hope suddenly switched its tune, and stopped operating as a PAC for Barack Obama, and set up shop again as a 527.

    Why, it’s as if the people at Vote Hope were purposefully trying to evade campaign finance law, and took advantage of the new 527 loophole! Is that all just a coincidence, Joe Mama?

  • One more thing, “Joe”: The IRS forms don’t show me a darned thing about how the 527 Vote Hope spends its money.

    For example, I can’t find any information at all that would enlighten me about Vote Hope’s work coordinating with church leaders to produce radio advertisements to benefit the Barack Obama campaign.

    Secret expenditures are just as troubling as secret donations, “Joe”.

    Now, what have you got, “Joe Mama”?

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