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In the world of campaign finance, 2004 was without a doubt the year of the 527 organization. No other aspect of campaign financing received as much press coverage or public attention as the rise of the 527s. Expenditures by 527s – named after the section of the Internal Revenue Code under which they are organized – active in federal elections amounted to at least $405 million, accounting for more than one-tenth of total federal election spending and perhaps twenty to twenty-five percent of spending in the presidential campaign. Federal Election Commission ("FEC") Chairman Scott E. Thomas recently observed that "[there is little doubt that 527 organizations … had a major impact on the 2004 federal elections," and Representative Mike Pence has called the 2004 election the "[s]ummer of 527s.” Indeed, probably the most famous political communication of the past year was the anti-Kerry advertisement sponsored by the Swift Boat Veterans and POWs for Truth ("Swift Boat"), a 527 organization. Of course, celebrity is not the same thing as popularity. The rise of the 527s drew extensive critical commentary, with many observers contending that contributions to and expenditures by 527s were little more than evasions of the recently enacted Bipartisan Campaign Reform Act of 2002 ("BCRA") and re-creations of the soft money problem that BCRA was supposed to have eliminated. Indeed, in the aftermath of the controversy surrounding the Swift Boat ad in late August 2004, President Bush denounced 527s (although not the content of the Swift Boat ad itself) and called for their elimination.


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