Why the Swift Boat Ads and the "527" Question Have Nothing to Do With Each Other

I haven't been able to fault Kerry's response to the Swift Boat ads and the other attacks. It took a day or two to know whether the media would choose to take this slander seriously, and as soon as it did, Kerry showed that he could respond quickly, sharply, gracefully and creatively. I'll accept that the attacks worked, in that they raised some doubts about Kerry, wiped out his misleading and temporary goodwill among conservative veterans, and helped knock a few points off his poll numbers. But Bush paid a huge price for a tiny advantage, the biggest price being that you only get one shot at an attack like that, and you had better shoot to kill. When the cycle turns, and Kerry is back on top, the Bush machine has incriminated itself and has no recourse to these same tactics. (Although the Republican convention suggests that perhaps Bush has realized that once you go into the gutter, you might as well stay there.)

One thing infuriates me about both Kerry's response and the media's gullibility, however, and that is the ease with which the factual argument about the Swift Boat vets' obvious collaboration with the Bush campaign has been conflated with the debate about the proper legal treatment of the independent political committees known as "527s," which has also allowed Bush to lure Senator McCain back to his side of the argument. I heard one CNN anchor casually refer to Americans Coming Together, which is a voter registration and turnout effort , as "another 527 attack group." The Swift Boat attack has very little to do with the legal structure formed to launch the attack, and everything to do with the nature, content, and truth-value of the attack itself.

I say this not to defend 527 groups. I agree with McCain and other reformers that 527s should be more strictly regulated. To be more specific, neither McCain nor Bush actually propose to "ban" 527s, since all political committees, such as the Democratic National Committee, the Republican Senate Campaign Committee, and the Sierra Club PAC, are regulated under Section 527 of the tax code and will continue to be. The ones I named above are also regulated by the Federal Election Commission and the size of contributions they can accept to influence federal elections is limited. But many 527s are not registered as political committees with the FEC. Often, that's perfectly legitimate. A committee that only intends to work on local or state elections doesn't have to register under federal law. But in the late 1990s, many of the short-lived front groups that were running attack ads in federal races chose to structure themselves as 527s for tax purposes, without registering as federal political committees. This allowed them to completely hide their contributors, until 2000 when a bill pushed by Senator Joe Lieberman required them to reveal their donors and the IRS to make public a database of those donors, one that only recently seemed to start working reliably.

It seems clear as day to me that those 527s formed solely to influence federal elections, like the Swift Boat gang, should be required to register as political committees and that those with a broader purpose and longer history, such as the moveon.org-affiliated 527, should have to attribute part of their spending to a federal political committee. The FEC has made a small, insufficient move in that direction, effective next year, and with all due disrespect to that flawed body, the line they have to draw is not an easy one to find. "Swift Boat" is not a hard case, but many of the others are.

But suppose that the FEC did everything that McCain could ask, strictly requiring any 527, and even many 501(c)4 nonprofits to register as political committees and use hard money for any expense related to a federal election? Would that effectively cut the Swift Boat group out of the game?

It would not. If it could not structure itself as a non-federal 527, the Republican operatives who created Swift Boat Veterans would have at least three other options:

1. A single donor could fund the entire ad. It's a well-established legal principle that a single individual cannot be limited in speaking in favor of a candidate, including buying ads, as long as he or she does not coordinate with a campaign. Texas Republican Bob Perry could have contributed $1 million if he wanted to, and funded the ads single-handedly. The same issues of coordination that apply to "Swift Boat" and to the Democratic 527s would apply here.

2. A hard-money committee could have been created. In this case, "Swift Boat" donors could give no more than $5,000, but if just one percent of the many thousand Bush Pioneers gave, it would go a long way.

3. Rely more on free media. It's obvious that the Swift Boat ad, like all the notorious attack ads of modern times (LBJ's "Daisy" and "Willie Horton," for example) earned free repetitions on the news that far outnumbered their paid placements. Swift Boat didn't need to buy all the time it did. A few spots in cheap markets, and an internet ad, can get as much coverage on the news as a much bigger buy. Thus, even with Bob Perry's $200,000 alone, the committee could have had most of the impact it had.

Given that the Swift Boat ads only happen to come from a 527 committee and could have taken these other forms, limiting the legal structure known as 527s would not have any effect on Swift Boat. That point needs to be made again and again. It also means that the "controlling legal authority" of coordination that would apply to a 527 or to an independent expenditure by a single individual are not the issue here. The issue should be the moral one of whether the Bush campaign knowingly permitted a false ad to go forward that they themselves would not have been willing to endorse.

There's also another misconception about 527s: The press routinely echoes the Bush line that there are more Democratic 527s simply because Democrats were slicker at finding the loophole. Wrong: Democrats turned to 527s because they anticipated that their candidate would agree to the voluntary limits set by the presidential public financing system and would be absolutely flat broke from March until August. They had no way to anticipate that their nominee would, like Bush, drop out of the public financing system for the primaries and thus be free to raise and spend money until the convention, or in particular, that a base of small and moderate individual contributors would suddenly appear on the Democratic side. The irony is that the Democrats are actually far less dependent on their big-dollar 527 donors than they expected to be as recently as Valentine's Day. McCain-Feingold didn't create 527s, but the limits it placed on parties increased the perceived importance of this particular alternative outlet.

The point is that there will be outside money in politics. That's just the way it is. Any campaign finance reform that is premised on the idea that we can "get big money out of politics" is naïve and doomed to fail. This is what I have referred to as "the limit of limits." And there will be dishonest attacks in politics, which often will ride on outside money.

If there will always be such attacks, the only solution is to make sure that campaigns can respond. Imagine how much more effective the Swift Boat ads would have been if they had run before the Democratic convention (and therefore, before the nominee received public funding for the general election), and Kerry had not opted out of the public financing system for the primaries, or had not been able to raise $180 million from individuals. During that anticipated "dark period," the "Swift Boat" attack would have gone without a response, unless another 527 got involved.

Public financing systems in Maine and Arizona have many appealing characteristics, but one of the most overlooked is that, because they are not based on limits, they can deal with this problem in a different way, by ensuring that attacked candidates have the opportunity to reply. A candidate who agrees to participate in the public financing system, and who is attacked by independent expenditure groups, regardless of legal structure, receives additional public funds to reply. This is not a perfect system. It requires a state official, typically the state's ethics officer or commission to determine very quickly whether an ad really is an attack intended to influence the election. It can allow plenty of stuff to sneak in, and it can also have a chilling effect on some non-electoral ads whose sponsors might hesitate to trigger the match. Another approach would be voluntary spending limits, as in the presidential public financing system or the New York City campaign finance system, but allowing the spending limit to increase for a candidate who is subject to attacks. None of these are immediate answers to the challenge presented by the Swift Boat ads, but the press should not have been so gullible in accepting that restricting 527s would somehow rid politics of false advertising.