The Clinton 527

Let's be clear: when a 527 forms for the express purpose of electing or defeating a particular federal candidate, and engages in public advocacy towards such ends -- as opposed to discussing issues -- it is breaking the law. Period.  The Media Fund, Swift Boaters and other 527s have paid six-figure fines for acting like a political action committee -- i.e., engaging in express advocacy and soliciting its donors with the major purpose of helping identifiable federal candidates -- but without abiding by any of the individual contribution limits or disclosure requirements attaching to PACs.

But when you've lost 25 of 36 contests ...

Allies of Hillary Clinton plan an expensive, stealth campaign to buttress her standing in the must-win states of Ohio, Texas and Pennsylvania.

They're canvassing Clinton donors for pledges of up to $100,000 in the hope of raising at least $10M by the end of next week. The money will be placed in the account of a political committee organized under section 527 of the tax code.

ABC News has more:

ABC News has learned that a group of Democratic politicos have set up a new independent 527 organization called the American Leadership Project (ALP) with the express purpose of helping Sen. Hillary Clinton, D-NY, beat Sen. Barack Obama, D-Illinois, in Ohio, and possibly Texas and Pennsylvania as well.

Free from campaign finance rules, ALP will not be legally permitted to coordinate with the Clinton campaign, but it is clearly intended to help her.

...ALP has developed three ads aimed at tarnishing Sen. Barack Obama, D-Illinois, as a talker and not a doer -- the ads are called "If speeches could solve problems" -- and they will contrast Obama and Clinton on issues of importance to middle class voters, such as the economy, health care, and the mortgage crisis.

The plan right now is for the TV ads to never actually mention Obama -- rather, the statements about rhetoric vs. reality will go after him through implication, the contrast between Clinton and Obama already being so well-known.

I want to highlight that last quote to make clear the lengths to which this 527 will have to go to even arguably have a case that it's discussing "issues" and not candidates.  Maybe they've found a magic loophole, but in all likelihood, they haven't, though their first ad follows all the rules in terms of "don't mention the election! just tell people to make phone calls!"

Why?  Because based on those FEC precedents, a group that forms on the eve of primary elections, advertises only in the immediate primary election states, and has no track record whatsoever of any kind of "issue advocacy" outside such context ... well, it's damn hard in those circumstances to claim you're not in it for the purpose of influencing the elections.  

[The only piece of the puzzle we don't have yet is what's being told to potential supporters, but since the website listed in that ad produces a dead link, we have no idea.]

The 527's leadership might be counting on two things: first, without a functioning Federal Election Commission, any complaint filed against this 527 remains a nullity; and, second, any subsequent fine might just be seen as a necessary "tax" on their efforts, the cost of doing business to get Clinton elected.  Two weeks ago, the WSJ quoted two of these Clinton bundlers:

"We're just trying to figure out things to do to help," Ms. Buell said. "We all feel very passionate about it, so the question is, what is the best thing we can do to get her across the finish line?"

Another Clinton fund-raiser, who didn't want to be named because he hasn't made a final decision, said he may pump as much as $500,000 into television, radio and newspaper ads for Mrs. Clinton.... This person says he feels he has done all he can for the campaign from the inside. He has donated the maximum $2,300 allowed by law for the primary to Mrs. Clinton, and he has tapped out his fund-raising network. He says Mrs. Clinton must win in Texas, Ohio and Pennsylvania to secure the nomination, but he worries that her campaign will not be able to afford to fund the ads she will need.

Having major campaign bundlers involved in gutting the individual contribution limits cannot be the answer.

In December, both Barack Obama and John Edwards demanded that 527s purporting to support them cease their activities and denounced their efforts; will Clinton do the same?    

update, 7:06p EST: We have our first Clinton reaction:

"I certainly can't imagine that Sen. Obama is in any position to make an issue of this, given the fact that there was a 527 organization -- I believe it was called Vote Hope -- that spent millions of dollars on his behalf in California."

According to FEC reports, Vote Hope spent $50,675.10 on pro-Obama independent advertising expenditures.