GOP Can’t Beat ‘3rd Party’ Groups, so It Forms Them

After their failed efforts to outlaw what they called “shadowy third-party groups,” Republicans are now playing a fast and furious game of catch up in the race for campaign cash. And they’re finding it’s not that easy.

In the weeks since the Federal Election Commission decided not to rein in the mostly Democratic groups this election cycle, several top Republicans have formed their own 527s, so-named for the tax-code section that governs the organizations.

But other GOP leaders have decided to stay on the sidelines, echoing earlier rhetoric from President Bush’s campaign that the groups are against the law.

“I got several calls that said, ‘Let’s do this,’ ” said Fred Meyer, a Bush fundraiser who is also Texas finance chairman for the Republican National Committee’s Victory 2004 campaign. But he -- and fellow Bush fundraiser Jeanne Johnson Phillips -- decided not to take any chances. They are continuing to raise money for the president’s campaign, the RNC and state races, but not for any 527s.

“I’m close to the [Bush] campaign,” Meyer said. “I’m not interested in causing anyone any trouble. We’re following the law.”

Many corporations, traditionally large givers of campaign cash, shrank their political budgets after passage of a 2002 federal law that significantly limited how much they could contribute. As a result, they have little money to funnel to groups just now forming.

The Leadership Forum is among the Republican 527s that has met some resistance. It accelerated its fundraising drives after the FEC decision last month, but the GOP’s aggressive stance against 527s has had “a chilling effect” on donors, said former Rep. Bill Paxon (R-N.Y.), vice president of the forum. “We’re definitely playing catch up. We have a long way to go.”

Even if fundraising improves for such groups, their late start poses other problems. Under federal law, ads funded with corporate or union money face content restrictions in the 30 days before an opposing party’s national convention and in the 60 days before the general election. For instance, such ads cannot attack a candidate by name.

With the Democratic convention set for late July, that essentially leaves only the next few weeks and August for the broadcast of corporate- and union-backed 527 ads that target Sen. John F. Kerry of Massachusetts, the presumptive Democratic presidential nominee.

“The Republicans miscalculated” in their legal war against 527s, said a GOP strategist who asked not to be named. “It was a gamble. They went with a legal course of action as opposed to a political course of action. We essentially ceded three months of time to [the Democrat-allied] groups....”

The 527s have become major political players in response to the 2002 campaign finance reform act, which banned individuals, corporations and unions from making unlimited contributions to political parties. Such contributions, known as soft money, were a mainstay of the Democratic Party.

Last summer, a group of Democratic insiders met at the Long Island estate of billionaire George Soros and hatched a plan to create several interlocking 527s that would raise millions of dollars to help defeat Bush. They contended that the soft money ban did not apply to 527s.

Other Democratic groups followed their lead. So far, the major liberal 527s -- which include America Coming Together, Media Fund and MoveOn.org Voter Fund -- combined have raised more than $100 million.

Since March, the liberal 527s have spent about $32 million on television ads, according to independent monitor TNSMI/Campaign Media Analysis Group. Most of those ads have criticized the president, and many ran at a time when Kerry could not afford to respond to a barrage of Bush attack ads.

In late March, the Bush campaign and the RNC filed a formal complaint with the FEC, alleging that Kerry was benefiting from an “illegal infusion of soft money.” The complaint claimed that Kerry’s campaign was part of a criminal conspiracy to illegally coordinate with the 527s.

The FEC, however, has not acted on the complaint. And in a separate action in mid-May, the agency effectively kept the 527s in business at least through election day.

Even as GOP strategists pursued their fight against the 527s, some top Republicans were hedging their bets.

Las Vegas publicist Sig Rogich said he met with Benjamin Ginsberg, a lawyer who serves as national counsel for the Bush campaign, and two others several months ago to discuss a revised Republican game plan if the FEC did not shut down the 527s. Rogich did not remember the names of the others at the meeting at his Las Vegas office, but he said they represented Progress for America, a conservative nonprofit advocacy group that set up a 527 on May 28.

“They were seeking people who might be effective in raising money,” said Rogich, who has raised more than $250,000 for the president’s reelection. “I was one of many, many people that they were looking at to see what we could do to even the playing field.”

Ginsberg said he was at the meeting as a lawyer for Progress for America, not as the president’s campaign counsel. “I was asked to be there to provide legal advice on a new and confusing law. The people in attendance wanted to know what could be done within the bounds of the law,” he said.

Ginsberg’s dual role is not unusual. The law firm representing Kerry’s campaign also represents Media Fund and America Coming Together, and the Democratic National Committee’s top lawyer represents MoveOn.org.

Progress for America is hoping to have a strong role in helping Bush and hindering Kerry.

“We’ve started reaching out to any and all Republicans,” said Brian McCabe, the group’s president. “One of the things we have said is we’ll work with other groups to quarterback on the conservative side to move the ball forward.”

Among the groups it will work with is the Leadership Forum, which Paxon said “was on the runway for a year-and-a-half waiting for clearance from ground control” to promote the GOP cause.

The Leadership Forum’s advisory board includes a number of prominent Republicans, including Ken Duberstein, White House chief of staff under President Reagan, former Sen. Lauch Faircloth of North Carolina, and former House members Bob Livingston of Louisiana, Tillie Fowler of Florida, Susan Molinari of New York and Bud Shuster of Pennsylvania. The group is planning a July 6 dinner featuring House Speaker J. Dennis Hastert (R-Ill.).

The group has not set a fundraising goal. “It’s clear the Republican 527s collectively will not have enough resources as the Democrats,” Paxon said.

The Club for Growth, a conservative 527 that raised about $2 million before the FEC decision, said it had received another $2 million since then. The group wants to raise $20 million to spend on the presidential race. It has spent about $500,000 in advertising and plans another $500,000 ad buy this week.

“I would definitely say people are a lot more willing to do this than before,” said David Keating, the group’s executive director. But he said there was still some resistance.

“We’ve been hearing for months that this was wrong, wrong, wrong. I guess people don’t realize there’s this new climate.”

Stephen Moore, Club for Growth founder and president, said the Bush campaign was “ill-advised” when it filed its complaints against the liberal 527s.

“It was a setback,” he said. “It froze out the money on the Republican side while the Democrats went hog wild on raising it.”

One new GOP group, Americans for Jobs and Growth, was formed by a group of Washington lobbyists and political strategists, including Cesar Conda, Vice President Dick Cheney’s former assistant for domestic policy. Conda is also one of the Bush campaign’s top fundraisers. The group hopes to raise $7 million.