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501(c)(3)'s jump into the campaign finance game

The New York Times reports: The so-called Wounded Warriors Act, legislation intended to improve health care for veterans, has attracted nearly unanimous, bipartisan support in Congress. So why would the newly formed Foundation for a Secure and Prosperous America begin running a television commercial urging the citizens of South Carolina to tell Congress to pass it?

The answer lies in the commercial’s glowing images of Senator John McCain, the Arizona Republican banking on a South Carolina victory to jump-start his cash-poor Republican primary campaign. The group that paid for the advertisement operates independently of Mr. McCain’s campaign, but was set up and financed by his supporters seeking to help him as much as possible up to the limits of the law.

The initial spending on the commercial, according to the group, is modest — commercials on the Fox News Channel in South Carolina only — but it represents the first trickle in a flood of hundreds of millions of dollars that are expected to pour from all sides into groups reminiscent of the Swift Boat Veterans for Truth of 2004, built to influence voting outside of campaign law limitations. The amount could swamp the record-breaking tens of millions that the top candidates are raising for their own, closely regulated campaign accounts. ...

The group running the commercial in South Carolina is registered as a 501(c)(4) nonprofit corporation. As such, it is allowed to raise and spend unlimited amounts from individuals without any disclosure, as long as it can argue that it is more concerned with the promotion of an issue — like the final passage of the Wounded Warriors bill — than the election of a candidate.

The lack of disclosure makes it hard to tell how the group spends its money, and impossible to say where it gets its money, and whether its donors have already donated directly to candidates. -- A New Channel for Soft Money Starts Flowing - New York Times

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