The Eleven Million Dollar Man

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I missed this yesterday, but according to new campaign finance reports the Houston-based housing mogul Bob Perry, best known in politics for his support of the 2004 anti-John Kerry Swift Boat Veterans for Truth, has donated at least $11 million this year to independent Republican campaign groups operating under section 527 of the tax code. Seven million dollars of that money went to American Crossroads, the group founded (and funded) with the help of senior George W. Bush advisors Karl Rove and Ed Gillespie, and which is running negative ads against Democrats nationwide. (For esoteric tax reasons about which you can read more here, American Crossroads must periodically disclose its donors; its sister organization, Crossroads GPS, can provide complete anonymity to its givers. Here’s the latest Crossroads GPS broadside against Harry Reid.) Perry has given at least another $4 million to Haley Barbour’s Republican Governors Association, which also discloses its donors periodically.

Let’s put this in perspective. The federal limit for one individual’s contribution to any given candidate is just $2,400 per election. (A primary and a general election count separately). You can give $5,000 to any given Political Action Committee. And if you’re feeling really profligate, you can give a whopping $30,400 to a national party committee. But the law also says that your total contributions to whichever candidates and committees you choose can’t add up to more than $115,500 within a two-year election cycle.

So Bob Perry’s contributions to American Crossroads and the RGA alone–and who knows how much more he’s given to groups that do not disclose donor information–totals nearly 100 times the federal limit for giving to other types of political committees. (Read more about Perry’s history of political activity here.) Never mind that these 527 outfits provide much the same function as, say, the National Republican Senatorial Committee. (One key legal distinction: The 527 groups can’t coordinate with candidates or party committees, though in practice they’re run by experienced pols who game out what that coordination would entail and try to emulate it without actually picking up the phone.)

There’s something a little crazy about this; no one would design a campaign system this way from the ground up. What we have is a major loophole in election law that neither the IRS nor the FEC nor Congress is able or willing to address, something you can read more about in my new Time.com piece.

P.S. Republicans argue that Democrats have played the very same game in recent years to far less public scorn. And it is true that in 2004 527 groups like the Media Fund and America Coming Together spent more than $100 million on advertising and voter turnout operations to help defeat George W. Bush. For instance, a lesser-known liberal 527 (which in turn donated heavily to ACT and the Media Fund) known as the Joint Victory Campaign took in $16 million from Progressive Insurance founder Peter Lewis and another $12 million from George Soros. But the difference between then and now is that those liberal outfits were 527 groups which did periodically disclose their donors. Many of the conservative outfits now in operation, unlike American Crossroads and the RGA, don’t have to reveal anything about where their money comes from. (That list includes that top Obama nemesis, the U.S. Chamber of Commerce.) And that, reformers say, undermines a fundamental principle of post-Watergate campaign finance law.

Also, despite what Karl Rove may say, some top reformers did complain about those liberal groups back in 2004.

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