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527s: The future of Libertarian politics

by Sean Haugh

The federal government, in their zeal for campaign finance reform, have given Libertarians a great gift. Quite simply, they have created the framework for a decentralized way of campaigning, a system perfectly suited to our way of doing politics.

From the Libertarian perspective, it was easy to predict that so-called campaign finance reform would not succeed in banning anything. People would simply find new creative ways to raise the money to do whatever they wanted anyway. And indeed this has come to pass. In the last election, we saw this new form of politics in action. It is the 527. This kind of organization is also the answer to many of the ugly internal squabbles over what the party should be doing. In the past, frankly we have expected the Libertarian National Committee and our state parties to do everything, which is way too much. The LNC is realizing that they simply cannot do it all and is making hard choices, leaving some essential activities such as ballot access and campus organizing to fend for themselves. Now if the expectation that the party will do everything was reasonable, we could say that they are turning their backs on core responsibilities. But if there was ever a “do it yourself” political philosophy, it is Libertarianism. The reasonable thing to do, when you see something that needs to be done, is not to argue that somebody else ought to do it. It would be better for everyone concerned if you just went out and did it yourself. Start a 527. What is a 527? The name comes from a section of IRS code which allows political groups to act like charitable nonprofits and engage in “educational” political activities tax-free. Unlike a political party, you can raise and spend unlimited money from nearly unlimited sources. Believe it or not, in this area the IRS is much less of a micromanager than the FEC. The FEC has a great interest in controlling all phases of operations, while all the IRS cares about is if you are paying the taxes you owe. And since most every political activity is exempt, that amount would almost certainly be zero. How you collect your income and what you do with it is of very little concern to them. As long as you are not directly advocating the election or defeat of a particular candidate within 60 days of an election, you can do anything you want as a 527. Even that restriction has significant loopholes and the rest is under direct challenge in court. Reading the IRS regulations on 527s is worthwhile, if only to glean certain entertaining tidbits. For example, as a 527 it is explicitly stated that you can: * pay the candidate a salary; * cover the candidate’s spouse’s expenses; * throw the election night party; and even, * pay the campaign’s debt after the election. The only organizations from which you cannot take funds are federal political committees. But unlike political committees, you can accept money from corporations, unions, and other entities otherwise prohibited from direct political support. The reporting requirements are easier as well. With the FEC, if your committee raises or spends over $5,000 you must start filing detailed disclosure reports. State laws usually place an even lower threshold for state level political committees. With the IRS, that threshold is $50,000. Similarly, you must report to the FEC information on donors who give over $200, while the IRS sets this bar at $500. Best of all, while there are strict limits on how much an individual can give to a candidate ($2,000) or a party ($25,000), there are no such limits on donations to 527s. One need only look to www.MoveOn.org to see the power of this new way of doing politics. If you spent any time at the polls on election day, you probably saw some of their “election protection” volunteers, monitoring the process and running one of the most elaborate traditional “get out the vote” efforts ever conducted. They have entered the lobbying arena with great success as well. They have brought people together with house parties and meet-ups. MoveOn is far more than a website. They have created and organized whole communities of people. Lots of people. While it retains the veneer of independence, it is deliberately establishing itself as a wing of the Democratic Party. By doing so, it is now in a position after a very short amount of time to take ownership of their party. A recent article on CNN gives a great rundown on how MoveOn has openly challenged the Democratic Party leadership with the bold declaration, “we bought it, we own it.” It used to be that Libertarians dominated the Internet. Those days are long past. Groups such as MoveOn have left us in the dust, harnessing the web as the new dominant tool for political organization. We would do well to study and follow their example. There are two groups within the Libertarian Party which have gotten the message, Freedom Ballot Access and DownsizeDC. Several other Libertarians are catching on and are busy launching their own independent groups designed to elect Libertarians and change public policy in a Libertarian direction. Freedom Ballot Access was founded by George Phillies, Richard Winger, Lee Wrights, and myself. Our mission is to change ballot access law and engage in other activities which will allow more people and parties to contest elections. Although we are all Libertarians, and our primary interest is in helping the Libertarian Party, most of what we expect to do long term is of benefit to all third parties and independent candidates. We can and will help non-Libertarian groups and thus retain a purely independent face. Since advertising is not part of our mission, we can do pretty much anything we want. During the last election, we were able to raise over $18,000 in a very short amount of time, which we were able to give directly to state parties conducting ballot drives. While we could not take orders from the Badnarik campaign or the Libertarian Party, we could communicate with them to learn where we could be most effective. We could also call the list of maxed out donors to the Badnarik campaign (which they graciously provided) to allow these wonderful people the opportunity to help the campaign even more. This was well beyond our expectations. When we started in May, we thought we were building towards the future and would have little to no impact on the 2004 elections. Yet we were instrumental in helping six states gain ballot access for the Libertarian Party and able to assist in another half dozen efforts. The simplicity and power of 527 organization made it possible for us to do so much so quickly. Downsize DC was started by Jim Babka and Harry Browne as the next step in their activism after Harry’s two runs at the Presidency. They were present at the birth of the 527 in modern politics and saw their power first hand. Their group has chosen federal lobbying as its niche, but like MoveOn if they are successful they are primed to grow into other areas of mobilization. The power of the Internet is no substitute for the more traditional forms of political organization. Just the opposite, it is a powerful tool completely in the service of those who want to mobilize an army of bodies, whether to drive people to the polls en masse or convince our elected representatives, bureaucrats, and the media that they still answer to us. Babka and Browne get it. The growth and success of DownsizeDC will be defined by the number of people they can identify and motivate to engage in Libertarian activism. Here as well, they know they can work with and recruit people who are not Libertarians to do Libertarian work. A web search on “DownsizeDC” will quickly bring up plenty of examples of their campaign against the FCC’s new indecency regulations being talked up on non-Libertarian websites. Again, in a very short amount of time this tool has allowed them to already show tangible results at comparatively little cost. (An excellent article by Babka which goes into more detail on this point can be found at http://www.libertarian.to/NewsDta/templates/news1.php?art=art783.) So, although lobbying is core political activity, the national party doesn’t have to worry about it as long as DownsizeDC and similar groups rise up to do that work. Similarly, one sign that Freedom Ballot Access has achieved its desired level of success will be when the LNC no longer has to debate whether or not they will support state petition drives. In fact, in the current legal framework, the only things the party has to do is recruit candidates, put them on the ballot, and make the party name mean something which causes people want to vote for them. And as we have seen with the L Factor group out in Arizona [http://www.thelfactor.org/], even some of that can be farmed out too. It would be great if our national and state parties do more than that, but it would be greater still if they had help. Starting your own 527 is about the simplest thing in the world. The IRS website is not all that difficult to navigate. Start with this page: http://www.irs.gov/charities/political/index.html. That will give you quick links to all the basics. You have to obtain an Employer Identification Number (EIN) by filling out form SS-4 (your own social security number won’t do) and file an initial notice with form 8871. After that you send in form 8453-X so you can file your reports electronically. You use form 8872 to file your quarterly reports if you go over the $50,000 threshold, and form 990 annually if you go over $25,000. Then there’s an annual tax return. That’s it. It may sound like a lot on the surface, but these forms are written in plainer English, are far less detailed, and need to be filed less frequently than FEC forms. Another pleasant contrast is that as long as your papers are in order these regulators hardly give a damn what you do. (The fact that I am on a first name basis with many people at the FEC and none with the IRS is telling.) All of these forms can be found easily using the above link. Strangely enough, the only one that you can’t file over the web is the one that allows you to file electronically. That’s the end of the nuts and bolts. What you do with them is totally up to you. Anything and everything you can imagine under the rubric of doing politics is something that can be done as a 527. All you need to start creating an effective or even dominant political organization is an idea, a computer, a phone, and your own ambition. It is essential to realize that party committees and 527s are not competing groups within the Libertarian Party. We must work together closely and harmoniously to achieve our common goals. Instead of seeing each other as appealing to the same donors or competing for the same glory, we would be better served realizing that our success is success for everyone, and that success we make possible for others is success for us. Of course, if that doesn’t work, there’s always the Democrats’ ugly example. If you feel the party is failing us don’t complain, just start a 527.   Originally published at Liberty For All November 17, 2008.   Sean Haugh is assistant editor for Liberty For All. Sean is married to longtime Libertarian Pam Adams, and they have a family of three dogs and five cats.   Besides them, Sean loves God, Liberty, and Oklahoma Sooners football.   Write to Sean at seanhaugh@mindspring.com.

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