From the New York Times

Advocacy Groups Spent Record Amount on 2004 Election
By MICHAEL JANOFSKY

Published: December 17, 2004

WASHINGTON, - Advocacy groups supporting Senator John Kerry's presidential bid outspent those supporting President Bush's by more than three to one during the last election cycle, according to a new report by the Center for Public Integrity, a nonpartisan investigative organization.
Advertisement The report also showed that Republican groups narrowed the gap in the final three months of the campaign, a period in which groups like Swift Vets and P.O.W.'s for Truth proved effective in attacking Mr. Kerry and helping Mr. Bush win by more than three million votes.
Over all, the study's authors said Thursday, the advocacy groups, known as 527 committees for the tax code section that created them, spent a record $550.6 million in all races in the 2004 election cycle. That was nearly twice the amount spent in the 2002 cycle and a total that reflects the changed landscape of campaign finance since unlimited soft money donations from companies, labor unions and individuals were banned in 2002.
"Hit-and-run 527 committees have been operating on the fringes of American politics for at least the least three election cycles," said Charles Lewis, the founder and executive director of the Center for Public Integrity. "But now, they have clearly arrived as significant forces in our electoral process."
Based on filings with the Internal Revenue Service, the report showed that Democratic 527's were organizing and operating much earlier in the 2004 election cycle than Republican groups, in part because Republicans were challenging the legality of 527's before the Federal Election Commission. By May, when the commission said it would do nothing to change the rules, Republican 527's had spent just $237,000 on the presidential race, compared with $73 million by Democratic 527's.
At that point, however, Republican groups rebounded quickly, spending $62 million through the end of the presidential election, as the Democrats spent another $115 million.
A major part of the Republican surge was the emergence of Swift Vets and P.O.W.'s for Truth, a group that used television advertisements in swing states to challenge a central Kerry theme: his leadership skills from his experiences as a Navy officer in the Vietnam War.
As a leading pro-Bush force, the group, originally known as Swift Boat Veterans for Truth, spent $22.4 million, the report said, a total that exceeded by $1.2 million one of Mr. Bush's greatest tormentors, the MoveOn.org Voter Fund, a 527 that made enormous use of the Internet to attract a lot of small donations.
Referring to the saturation of television advertisements during the campaign, Mr. Lewis said that "none probably had a bigger impact" than those from the Swift boat veterans, who suggested that Mr. Kerry was untruthful about events during his years of service. Mr. Lewis described the veterans' campaign as "incendiary character smear" and "factually flawed."
But it proved effective, he said. "In terms of political impact," he said, "the Swift Boat Veterans for Truth ads were easily the most successful amid the overwhelming din of paid propaganda throughout the year."
David B. Magleby, a professor of political science at Brigham Young University and senior fellow of the Center for the Study of Elections and Democracy who contributed to the report, called the Swift Vets' campaign masterly and added, "Bush got the best of both worlds because he could decry 527's and benefit from their activities at the same time."
Mr. Magleby also said groups were effective at mobilizing voters. That was especially true for Democratic 527's, he said, like the Sierra Club, which contacted 400,000 voters in nine swing states by phone, mail and door-to-door visits.
He called the impact of 527's on such efforts "the big story of 2004."
The report listed Democratic groups as 13 of the biggest-spending 527's, led by the Joint Victory Campaign, a fund-raiser for two other groups, America Coming Together (No. 2) and the Media Fund (No. 6). The big Republican 527's were the Progress for America Voter Fund (No. 3) and Swift Vets and P.O.W.'s for Truth (No. 4).
Democrats also dominated individual donors, with George and Susan W. Soros of New York leading the list after giving $23.7 million. The biggest Republican donors were Bob and Doylene Perry of Houston, who ranked fifth by giving $9.6 million.
Mr. Lewis said that the lessons of 527 activity in 2004 were obvious: Republicans learned they needed to start sooner; Democrats learned they needed to spend more and sustain their efforts. In the future, he predicted, groups would spend more and mount more pointed attacks.
"No one's going to cut back in fund-raising or strategy," Mr. Lewis said. "Like in World War I, they said new armaments have been tested here, so look out. Everybody's now emboldened, not dissuaded, by what happened in 2004."