Dec 27, 2007 -- The New York Times: Campaign Finance Advocates Raise Alarms Over Union Group
By: David D. Kirkpatrick

Advocates of stricter campaign finance laws are raising alarms about the legal status of a labor-backed group that is blanketing Iowa with mail and advertisements supporting the Democratic primary campaign of former Senator John Edwards.

The group, Alliance for a New America, was formed and financed by locals of the Service Employees International union that support Senator Edwards. One of his opponents, Senator Barack Obama, has derided Mr. Edwards for benefiting from the group's advertisements even though he has often criticized such independent organizations— known as 527 groups, after a provision of the tax code— for circumventing the limits of campaign finance laws. Actively coordination of advertising expenditures by a campaign and an outside group would be a violation of campaign finance laws.

The Edwards campaign has said it has only limited knowledge of the union officials' plans. The campaign has acknowledged talking to union officials about coordinating their endorsements and other permissible forms of support. But a spokesman for the campaign said the union cut off its communications with certain staff, who later turned out to be organizing the 527 advertising group.

Now two campaign-finance advocacy groups— Democracy 21 and the Campaign Legal Center—argue that the Alliance for a New America may be violating other campaign finance rules. An Oct. 8 e-mail message circulated between union officials that was leaked through a rival campaign and published online by The New York Time suggests that the union officials planned to create the Alliance for a New America explicitly to advocate the Mr. Edwards election. (The group's direct mail and television and radio commercials indeed strongly support Edwards, and its main staff worked for Mr. Edwards's 2004 Democratic primary campaign.) Such advocacy of a candidate's election could mean that the group falls under the restrictions governing so-called federal political committee rather than the looser rules applies to 527 groups; as a political committee, it could not accept contributions of union dues or other unlimited donations as it has. The Federal Election Commission fined several groups for violating the rules in similar ways in 2004.

"The SEIU memo raises serious questions about whether this 527 group is engaging in illegal activities," said Fred Wertheimer, founder of Democracy 21, including "whether this 527 group has failed to properly register as a federal political committee and to comply with the contribution limits and prohibitions that apply to the funds such a political committee can receive."

Paul Ryan, a lawyer for the Campaign Legal Center, said, "They may simply another in long line of 527 groups that simply ignore campaign finance law, and it may be doing so with a plan to pay a fine to the FEC."

Officials of the group did not return calls or could not be reached.

Eric Schultz, a spokesman for the Edwards campaign, said, "The email put forth by a rival campaign is an internal SEIU email about internal SEIU discussions and has nothing to do with the Edwards campaign."

"Apparently, based on the email we received from a reporter, SEIU officials were having two separate conversations - one with the Edwards campaign to discuss perfectly legal member-to-member activities and another one internally about their own independent activities - to try and link the two conversations together is false and misleading," he said. "As soon as SEIU officials informed us, later on, that some of their staff would no longer able to communicate with us about the campaign, we immediately stopped all conversation with them, as we legally had to. We found out the existence of this outside group the same way everyone else in the public did and we stand by our position that 527's should not be involved in the political process."