ProPublica Explains Super-PACs, 527s, and 501(c)(4)s in Campaign Finance

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July 11, 2011; Source: ProPublica | ProPublica is circulating a very useful guide to the various kinds of campaign finance entities that we all read about and try to understand, particularly in the wake of the Citizens United decision.  Like every national election lately, this one promises to be the most expensive in history, with PACs, Super-PACs, 527s, and 501(c)(4)s vying for and spending money on behalf of House, Senate, and Presidential candidates.  What are the types of entities that we will all hear much more about in the months leading to the November 2012 elections?

  1. Super-PACs:  Officially called “independent expenditure-only committees,” Super-PACS “can raise and spend unlimited sums of money from individuals, corporations, unions, and other groups…they can’t donate directly to candidates but can promote them and attack their opponents so long as they don’t coordinate with any candidate or political party.” 
  2. 527s:  ProPublica calls them “yesterday’s Super-PACs” that could either register as PACs and give directly to candidates or focus on specific issues.  With the advent of Super-PACs, the heyday of 527s may be over. 
  3. 501(c) organizations:  ProPublica lumps the 501(c)s, including (c)(3) charities, (c)(4) social welfare organizations, (c)(6) business leagues and trade associations, 501(c)(5) labor unions, and others into one category it calls “the invisibles.”  ProPublica cites the Sunlight Foundation calling the 501(c) organizations “perhaps the most opaque political players since pre-Watergate days of anonymous cash contributions to candidates.” 
  4. Combinations:  The newest development is the American Crossroads dynamic, creating a linked Super-PAC and a 501(c)(4).  Donors can give to the (c)(4) which can then give to the Super-PAC.  Although the (c)(4) is identified as the donor to the Super-PAC, the donors to the (c)(4) are kept secret.  It’s a neat trick of disclosing without real disclosure.

Do realize that both national political parties are exploring the multiple forms of political instrumentalities for wealthy donors to exercise undue influence over the political process.  Republicans like Rove may be path-breaking innovators, but Democrats are quick to emulate and embellish these structures to support their own campaign agenda.  It is a problem that isn’t political party-specific.—Rick Cohen

  • Paul

    Really informative. The thing that still confuses me is whether a “Super PAC” is a 527 or a 501(c) organization. I guess since Super PACs are necessarily registered with the FEC, they aren’t a 501(c) organization?