The Return Of Soft Money

WASHINGTON - (08/16/04) -- Among the major political storiesmaking the rounds last week was the emergence of two well-fundedgroups taking out surreptitious ads attacking DemocraticPresidential candidate John Kerry for his service in Vietnam andvoting record in African-American issues. The ads were in fact paidfor by supporters of President Bush through so-called 527s,political advocacy groups organized under the section 527 of theInternal Revenue Code. Such groups have replaced so-called softmoney contributions, which was banned under last year's campaignfinance law. Though last week's controversy focused on theRepublican-sponsored 527s, Democratic groups have raised the vastmajority of the almost $240 million 527 groups have raised so farduring the current election cycle. Groups like the Media Fund,which has raised $28 million, Americans Coming Together, $27million, are planning to finance a multi-million dollar campaign inopposition to President Bush, independently of the Kerry campaign.To date, credit unions have been slow to the new game, but thebankers have raised more than $550,000 so far through their own527s, which can be used to run ads and campaign on pro-bankerissues during the elections.