The Mystery of the ‘Disappearing’ Soft Money

A previous report found that since enactment of the Bipartisan Campaign Finance Reform Act (the BCRA, also known as McCain-Feingold) in 2002, the Democratic Party benefited by gaining an increasing share of corporate campaign contributions — and now shares the “party of big business” title with the GOP.


Missing from that discussion was longtime Democrat supporter Big Labor, which is a story in itself. After BCRA’s ban on soft money, Big Labor’s campaign contributions declined dramatically. Superficially, it may seem that Democrats tossed aside their traditional ally in order to cozy up with their new corporate friends. But the truth is somewhat different, and perhaps frightening.

After BCRA, Big Labor’s candidate contributions declined over 31%. But one of BCRA’s consequences was 527 groups, of which National Public Radio says:

They’ve been a powerful and wealthy force in the presidential campaign so far, despite the fact that the soft money they thrive on was to be outlawed by the McCain-Feingold campaign finance reform in 2002.

Unlike the limits imposed by BRCA (e.g., $2,000 per candidate per election in 2002) 527s are limited only by the depth of an organization’s pockets. Campaign finance resource Open Secrets states:

527 groups are tax-exempt organizations that engage in political activities, often through unlimited soft money contributions. Most 527s on this list are advocacy groups trying to influence federal elections through voter mobilization efforts and so-called issue ads that tout or criticize a candidate’s record.

It is clear that 527s were Big Labor’s saving grace, giving them an opportunity to spend money influencing elections that was supposedly banned by BCRA.


Leading the 527 contribution list is the Service Employees International Union (SEIU), which Open Secrets calls “the largest and fastest growing member of the AFL-CIO.” SEIU contributed more money than any other organization, labor or corporate, for each election cycle since 2004, over $126.8 million total. The American Federation of State, County and Municipal Employees (AFSCME) is the second-highest contributing union, at $16.3 million. Open Secrets says:

The American Federation of State, County and Municipal Employees (AFSCME) is made up of 3,500 local unions representing 1.4 million members who work in public service and health care.

One of their top priorities is “battling efforts to privatize public sector jobs.”

This means that your tax dollars, earmarked to pay public employees, are being used to lobby for more government.

All told, the top-contributing unions have put more than $185 million into 527s since 2004. While not the biggest chunk of money in the campaign finance picture, it represents far more than the estimated drop in union campaign contributions following BCRA’s ban on soft money.

During the health care town meetings, video journalists caught examples of people wearing union T-shirts attacking tea party activists. While these incidents seemed to happen infrequently, there is a more organized group, with serious Big Labor money behind it, planning to discredit the tea party movement.


From Fox News:

A new Web site targeting the tea parties is a part of a complex network of money flowing from the mountainous coffers of the country’s biggest labor unions and trickling slowly into political slush funds for Democratic activists.

Under the umbrella of a group called the “American Public Policy Center,” union money flows into seven 527s, all run by the same people, which in turn promote this new anti-tea party movement. Here’s how it works:

1. Between 2006 and 2010, unions contributed over $15.8 million to these 527s.

2. Unions gave Citizens for Progress (aka Patriot Majority West) over $1.7 million during the 2006 and 2008 election cycles. AFSCME heads their donor list, which includes SEIU, Teamsters, and the National Education Association, one of America’s two largest teachers’ unions.

3. Oklahoma Freedom Fund received $4.1 million from AFSCME and $25,000 from SEIU in 2008, and then gave $161,000 to Patriot Majority.

4. In 2008, Oklahoma Freedom Fund also gave $77,432 to Citizens for Progress.

5. The same year, Citizens for Progress gave $300,000 to Patriot Majority under the handle of “Patriot Majority West.”

6. In 2010, Citizens for Progress gave $25,000 to American Public Policy Center (APPC), and Patriot Majority chipped in $5,000.

7. With the $30,000 start-up money, APPC created a web site “to prevent the tea party’s dangerous ideas from gaining legislative traction.”


Other contributors to these 527s include the Democratic Governor’s Association and the Democratic Attorneys General Association. All told, these 527s received over $26 million since 2004.

Compared to the $2.4 billion spent on federal campaign contributions in 2008, this may not seem like much money. But considering that the Swift Boat Veterans for Truth raised $17 million in 2004 to attack John Kerry’s Vietnam war record, modest amounts, applied judiciously, can make a big impact.

But that’s not the end of the story.

First of all, Big Labor has always been the Democrats’ strongest supporter, giving 92% of all campaign contributions ($630.4 million) to Democratic candidates since 1990. So it should be no surprise that their 527 contributions support Democratic Party causes.

Perhaps most importantly, since 2004, over $888 million has flowed into 527s supporting what Open Secrets calls “Democrat/Liberal” or “Republican/Conservative” causes, and 75% of this ($666.3 million) went to the former.

Soft money didn’t die; it went to the Democrats’ 527 heaven, courtesy of the BCRA.

Once again, Democrats benefited from BCRA, because Big Labor, along with other Democrat organizations, could funnel funds into 527s free of federal restrictions. While BCRA was in force, Democrats had more and more Big Business money flowing directly into their campaign coffers, while Big Labor and special interest money worked behind the scenes to benefit Democratic Party causes.


No wonder they are promoting a constitutional amendment countering the recent Supreme Court decision striking down key parts of BCRA.

Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek. – Barack Obama

Except when the status quo works so well.


Trending on PJ Media Videos

Join the conversation as a VIP Member