Catch-527: The New Political Conundrum

This is a partial transcript of "The Big Story With John Gibson," August 24, 2004, that has been edited for clarity.

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JUDGE ANDREW NAPOLITANO, GUEST HOST: Swift Boat Veterans for Truth (search), behind the anti-Kerry ad that sparked quite a bit of controversy. President Bush told reporters yesterday he would like to see all independent groups, or 527's as lawyers call them, put an end to their political ads. With more on this now, here's Heather Nauert.

HEATHER NAUERT, CORRESPONDENT: Hi there, Judge.

Well, many of the 527s groups that responsible for these ads attacking President Bush (search) and Senator Kerry are headed by Democratic and Republican Party activists. 527s have been a big boost to the Democrats in the election, but Republicans are now starting to take advantage of the 527s too.

Derek Willis of the Center for Public Integrity (search) studies 527s and joins us now.

Derek, that is a big question today: Who is behind the 527s and who is pulling the strings here?

DEREK WILLIS, CENTER FOR PUBLIC INTEGRITY: Well, a lot of different people are behind the 527s because they spin a lot of different ideological interest. For example, the Swift Boat Veterans, we know that many of the former Vietnam veterans are involved with that group but it involves other people — a Houston home builder Bob Perry who has been a long-time backer of Texas Republicans. So, it really spans the gamut.

NAUERT: This is just a minority when you look all the money that's gone to 527s. According to your organization, 95 percent of the money raised for 527 has gone to Democrats.

WILLIS: Oh, that is undoubtedly true.

NAUERT: Who is behind that?

WILLIS: For the most part, it's a collection of wealthy individuals. People like George Soros, also Peter Lewis, the chairman of Progressive Insurance, and Steve Bing, a Hollywood producer. Between the three of them, they've ponied up about $30 million to 527 groups in the last 1 1/2 years alone. So, it's a fairly small circle of very wealthy donors that have provided the strength and energy for a lot of these Democratic or liberal groups.

NAUERT: They're putting in the money. They are funding this entire operation, which is huge. It's staggering the amount of money that's been raised for this. But who is actually behind the groups pulling the day-to-day strings?

WILLIS: A lot are familiar faces to those people — to those of us who are so familiar with national politics. For the main anti-Bush 527s, groups like the Media Fund and America Coming Together, these are people like Harold Ickes, who was a former Clinton White House official, Steve Rosenthal, former political director for the AFL-CIO.

NAUERT: And now, Ickes still works for the DNC, is that correct?

WILLIS: He's still a DNC committee member. Now, he doesn't draw a salary from the DNC, but he's still obviously a member of the Democratic National Committee. He's not in what you would call an official leadership position with the DNC. That makes his role with the 527s possible.

NAUERT: On the other side with the Republicans, there is a woman who does some work for former House majority leader, Dick Armey, with his Political Action Committee.

So, with these people who are so inside the Beltway, if you will, such Washington insiders, they, obviously, have a lot of friends who work at both campaigns, how do they not have coordination?

Because coordination is supposed to be key here. That is supposed to be the illegal component of it.

WILLIS: Right. That is supposed to be the dividing line between the 527s and presidential campaigns and national parties. And obviously these people speak to each other. They're friends, as you said, with people in the campaign. I think the key to avoiding running afoul of the law is basically not to tell them what you've got planned if you're one of these 527 groups. Not to tell them, hey, we've got an ad in this state or that state or our next ad is going to attack this candidate on that position. Once you get into discussing specifics, that is where the law starts to draw the line and you really can run onto serious trouble quickly.

NAUERT: But there is a way to coordinate without actually picking up the phone. Tell me a little bit about that.

WILLIS: Sure. In this age of sort of ubiquitous media track, these groups can scribe to services that tell them where the presidential campaigns have run ads or the national parties have run their ads.

And they can sort of follow the landscape, see where the ads have been placed before hand and decide maybe we want to reinforce a particular message in this state. Or maybe we want to go and concentrate on another state that the presidential campaigns seem to be neglecting or at least not putting a lot of resources into. So, they know where the other part — where the opponents and their allies are playing, and that, obviously, has to factor into their decisions.

NAUERT: Why have Democrats so outraised the Republicans when it comes to the 527s?

WILLIS: Two reasons. The first is that Democrats started very quickly at the beginning of this election cycle last year to really start to put these groups together. They really felt they would be at a competitive disadvantage when it came to raising money. And the second reason is that Republicans upon seeing this tried to have these groups shut down by the Federal Election Commission.

NAUERT: They got a late start then?

WILLIS: Right.

NAUERT: Let me just ask you quickly: are we better off now?

I mean, I am read hearing $145 million for the Democrats, $9 million Republicans have put together for the 527s; are we better off now than before McCain-Feingold?

WILLIS: I think that is an open question. It really won't be settled until Election Day because then we'll really have the test of how well these groups performed or how much impact they have.

But we do have disclosure of these groups. We can see where the money is coming from and that is an important part of judging the electrical process.

NAUERT: All right, Derek Willis, thanks a lot.

NAPOLITANO: I think these 527's are really American politics at its best. You and I, save our money, buy a full-page ad, tell the world what we think.

NAUERT: All right, Judge.

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