The drive to eliminate 527 groups appears to have failed for this year. That is good news for free speech. But maybe the story is even better. Maybe Congress won’t eliminate 527s next year or the year after. Let me explain.
First, a little history. 527s rose to prominence in the 2004 presidential campaign. The Democrats used 527s to raise several hundred million dollars to help the Kerry campaign. The Republicans by and large did not use 527s. Party leaders wanted to keep control of the GOP campaign. For reasons of partisanship and control, Republican leaders wanted Congress to “close the 527 loophole.”
They have failed to do that. Democrats were willing to filibuster to block the legislation, and seven Republican senators were unwilling to support the effort to end 527s.
However, things could change. To succeed in the Senate, the 527 ban will need more unified Republican support plus a few stray Democrats (say, about 10 of them) voting contrary to the wishes of their party’s leaders. The latter could happen. An endangered incumbent of either party values his re-election more than party discipline. Twenty percent of the GOP in the House voted for McCain-Feingold, the wishes of their leaders notwithstanding.
If the Democrats use 527s to attack Republican incumbents, the GOP might be more unified on this issue. If the GOP in turn uses 527s to effectively threaten vulnerable Democratic senators, those incumbents might consider voting with the GOP to “close the 527 loophole.” (It's free speech, not a loophole, but you get my point).
But the GOP leadership does not want to use 527s. They highly value retaining control over campaigns. As long as that remains true, vulnerable Democrats will not be threatened by 527s and will not provide the necessary votes to override a filibuster in the Senate.
In sum, 527s will probably survive so long as Karl Rove runs the Republican show.