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527

If money talks, the voice of the electorate is getting stronger each day. Political groups funded by private citizens are springing up like insurgents in an occupied country. Well-known groups like MoveOn are engaged in winning the hearts and minds of the voters via the Internet. 527s - referred to by the Internal Revenue Service code controlling their operation - are busy counting both hard and soft money contributions. Many are aimed primarily at defeating candidates. The funding levels of these organzations and the sheer volume of the collective voice may be the best indication yet of the deep polarization of voters in this election cycle.

In an exclusive Watchblog interview, Eric Carbone, founder of the new Fight Back Fund, talks about its formation, its mission and the impact he hopes it will have in November and beyond.

In the spirit of full disclosure, I spent more than four months working elbow to elbow with Carbone in the short Wesley Clark campaign. Over the course of many 16-hour, 7-day weeks, I watched him steer a hard course directing the campaign's Internet communications effort. It's hard to eclipse his intelligence and his wit. He makes an amazing pasta. He's a proud new father. If anything could surpass the impression those characteristics leave, it is, quite simply, his dedication. Though he could easily watch the world pass in comfort, he's been in the trenches both then and now for his good fight and ours.

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What was your political experience prior to the Clark campaign?

None. I had spent ten years at Internet startups, learning the ins and outs of online publishing and how to build interactive, web-based communities. My first start-up was acquired by AOL in 1997. I worked there for a few more years on interactive technology projects before starting another technology company in 1999.

How did you get involved in the Clark campaign?

Last summer, I was actually enjoying a nice retirement when I decided to help with the Draft Clark movement. It quickly became a full time, 60 to 80-hour-per-week commitment. When Wes Clark announced he was running, I left for Little Rock with a one-way ticket. After a few chaotic days, I became part of the core technology team and eventually earned a spot on the senior staff as Director of Internet Communications. I helped manage a team of 18 full time staffers that maintained the General's web presence, designed and built the campaign's supporter tools.

What type of organization is the Fight Back Fund? A PAC? A 527? What's the difference?

Actually, all PACs are 527's. Some are registered with the Federal Election Commission (FEC) and only accept hard money. Others aren't [FEC-registered] and accept soft money. Some do both. Currently we are an FEC-registered PAC, but we are starting a non-federal fundraising program, which will make us a hybrid similar to MoveOn and America Coming Together.

What motivated you to start Fight Back Fund?

After the Clark experience, I desperately wanted to stay involved with the effort to unseat George Bush and his Republican allies. I worked for a few months helping America Coming Together revamp its Internet strategy and consulted with a few Senate and House campaigns. It was clear to me that for campaigns that didn't have the scale of a presidential race, few would have the resources or national profile to create the critical mass necessary to build a really effective Internet strategy. There needed to be a national, outside group that could use the Internet to funnel people and resources from across the nation into the most competitive races. Other groups were helping John Kerry and big slates of candidates at every level of government, but no one was focusing exclusively on the Senate this year.

To me, aside from the presidential race, winning back the Senate is the highest priority for the Democratic party. If John Kerry wins, it's essential he has a congress that can help him govern. And, if George Bush win in November, we can't allow him to have a Senate that rubber stamps his budget decisions, domestic policies, and most importantly, his judicial nominations. Three or four Supreme Court justices could retire during the next four years.

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It's no secret that Washington, D.C. is a town driven by politics. In the presidential election seasons, the level of politics in D.C. rises to a frenzy. It can be an intimidating place to those on the fringes, those who haven't committed a lifetime to the backrooms, and to those distant from the subtle comeraderie of the political staffers. The excitement of the election cycle sweeps in from the suburbs, blowing the leaves of Constitution Avenue and Georgetown and K Street, fading only after the mandate of election day is executed in the inauguration. Elections are a quadrennial fifth season in Washington, D.C. with a meteorology uniquely their own.

D.C. is also a city of casualties in the election season, maybe more so in this than in others. As the candidacies of so many Democrats succumbed to attrition through the months of January and February, the staffers who fueled the campaigns descended on the city to continue the overriding mission - the election of a Democrat to the White House. Not all found their way to the staff of the nominee. Some moved into House and Senate campaigns. Some became critical players in media watchdog organizations. And some chose to volunteer their time and skills in 527s.

I asked Carbone about the staff of Fight Back Fund. If you listen, you'll hear the quiet harmonic resonance of political staffers whose ideological mission doesn't just simply die away.

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Tell me a bit about your staff.

The Fight Back Fund concept builds on the principals' real-world experience in online fundraising and constituency-building. The staff includes several members of the Internet fundraising and communications team from the Clark campaign, which raised $10 million online Ė largely in donations of $100 and less from previously unengaged donors - in less than six months. $3.5 million was raised in the Clark campaign's first two weeks, largely online and much of it from donors outside traditional Democratic neighborhoods.

This is a group of people that have been in the trenches of online politics for almost a year now. Few groups, and certainly no one on the Republican side, know more about online constituency building and fundraising than this team.

What difficulties, if any, did you face in staffing Fight Back Fund?

The biggest hurdles to building a staff for a project like this are 1) finding good people who are available and 2) convincing them to work for free until the organization is up and running. On both accounts, I've been incredibly fortunate. Not only have many members of the Clark campaign stepped forward to volunteer, but former employees and colleagues from my dot-com days have also volunteered. Everyone has seen the awesome potential of what we're doing and wants to see it succeed. It's been a real honor to work with a team like this.

How big is your volunteer base?

Right now, we're just starting out, so it's almost entirely volunteer. I am not getting paid anything for my work on the Fight Back Fund, and many contributors are working around the clock for little or no money. It's actually very inspiring to see how people come together when they're fighting the good fight.

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The 527 organizations have come under fire in this election cycle. The McCain-Feingold bill was intended to reform campaign finance. By limiting soft money, its sponsors hoped to limit the effect of outside organizations on political campaigns. Instead, the groups have taken on even greater importance, cloaked in the odd mix of money and consitutionally-guaranteed free speech. The right, in particular, has raised strong concerns about the activities of 527s, knowing full well that these groups represent a financial levelling of the political playing field.

As difficult as it may to be accept for those who counted on overwhelming financial superiority, the 527s are registered, recognized and regulated by the IRS. To tamper with their structure would jeopardize organizations upon which the right themselves might ultimately have to rely.

Carbone talks about the complexities of 527s; the elements that distinguish them from other not-for-profits and the regulatory environment controlling their formation and operation.

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Let's dig into the nuts and bolts and talk about the differences between your organization and other, maybe non-political non-profit organizations. In terms of your internal organization, what distinguishes you from other non-profits?

Like many new organizations today, we are a virtual team. I am based in Washinton, DC. Our technology point person is in Florida, our designer in Chicago. The servers are in New York. This makes good communication even more essential than in normal organizations. We use email, cell phones and instant messaging extensively to keep in touch with one another.

How are you different in terms of marketing?

Getting the word out is our biggest challenge. The airwaves and Internet have become so cluttered with messages not only from the campaigns and political parties, but also from other groups trying to advocate for their causes. It's hard to break through the clutter. The polarized nature of the campaign actually helps all of these efforts because it means people are really paying attention to what's out there. They're engaged and activated, on both sides.

That's one reason we're keeping our message simple. Aside from helping John Kerry win the presidency, winning back the Senate is the most important priority for our party. We are going to focus exclusively on this goal until November.

How do you differ from other non-profits in the eyes of the IRS?

There are not a lot of differences. We are a not-for-profit corporation incoroporated in the District of Columbia. Because we are funded through contributions from supporters, we have to track where every dime comes from and where it goes. We file regular reports with the FEC that are public. Our books are completely transparent.

What is the primary source of 527 funding?

Some groups raise money from a small group of high-end donors. A few high profile donors such as George Soros have given millions to 527s this cycle. Others raise money in small amounts from ordinary citizens across the country. This is the group that supported the Clark campaign in high numbers. We hope to tap into the same sense of community as the Clark campaign to help fund Fight Back Fund projects.

Describe any difficulties you had from a regulatory standpoint in forming Fight Back Fund. Are there any built-in institutional roadblocks designed to slow down the formation process? Or, conversely, is it just a matter of filing the proper paperwork and paying a fee?

As simple as incorporating. The filing prcedures at the FEC make sure groups such as this have transparent books.

Overall, does the organizational and regulatory environment favor the formation of a 527 over other non-profit organizational types? Or does the environment make it tougher to form a 527 than other organizational types?

The campaign finance laws place different restrictions on different entities. That's why, to be effective, groups are forming what are being called "flying fortresses" or a collection/group of entities (Federal PAC, 527, 501c3, 501c4, etc). Each individual entity in the group plays a specific role in getting the message out and conducting activities. Money for specific actions is directed at the entity best able to get the job done.

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There should be little doubt by now that the 2004 election will be remembered as the first in which the power of online politics came to fruition. Candidates built, delivered and refined their messages online. The constituency at large had, for the first time, a real-time voice in the campaigns. The political arena added some new phrases to the time honored language of elections. Chat rooms. Blogs. Blogcasts. Communities. Email blasts. Contribution pages.

While the online fundraising efforts received the bulk of the media attention, the other pieces played perhaps even more critical roles in the campaigns. 2004 opened the book of online experience upon which all campaigns to follow will rely. Those staffers whose candidates left the races have taken that experience to the 527s.

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Does the pervasiveness of technology make the formation and financial maintenance of a 527 easier? Does it present any additional problems?

The Internet has opened a whole new chapter on political fundraising. It allows groups such as 527s (as well as candidates and parties) to reach a group of donors that for many reasons, weren't being reached by traditional fundraising techniques. For this reason, a group that focuses on the needs of this audience and uses the online fundraising knowledge learned in the political trenches during the past year, can tap this source of support. This makes maintaining new kinds of political groups such as 527s easier, but the benefit is not limited to them.

When soliciting funding, what's the approximate mix of traditional (mass mailings, etc.) and non-traditional (email blasts) communication with potential contributors?

The Fight Back Fund will use a mix of online fundraising and traditional offline fundraising techniques (houseparties, paid fundraisers, etc). We will probably not use direct mail until after November because mail programs tend to need a few months to break even, and we don't have the luxury of time. We are directing all the resources we can marshall into winning back the Senate for Democrats.

Can an organization such as yours create and host fundraising events? In other words, are you ready to insert Fight Back Fund into the rubber chicken circuit?

Yes, like any traditional PAC, we can create and host fundraising events. In fact, we may already have one tentatively scheduled for Sept. in Florida. Unlike some traditional pacs, we can also take non-federal contributions above and beyond the $5,000 federal limit into our non-federal account.

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According to a recent press release from Fight Back Fund, the group's primary mission shakes out as follows:

The Fight Back Fundís core project through November is Win the Senate, an Internet fundraising campaign to help regain Democratic control of the Senate. The program, at WinTheSenate.org, is a three-month online campaign to mobilize 100,000 people nationwide to contribute $10 to each of 10 highly competitive Senate races Ė thatís $10 million, in small contributions, in select races where the money really matters.

Unlike party committees that raise funds and then disburse them to candidates, the Fight Back Fund is not collecting Win the Senate contributions; instead, it is collecting online pledges, including credit card information, and forwarding them securely to the campaigns directly for processing using technology tools developed by the Fund. Donors may choose to contribute any amount to one, all ten, or any number of the spotlighted campaigns.

But press releases rarely distinguish one organization from another. I asked Carbone about the real distinction between Fight Back Fund and other organizations of its ilk.

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How does Fight Back Fund differ from other 527s involved in this election?

The group uses a structure and tactics similar to other independent organizations such as MoveOn.org, Democracy for America and The Media Fund but is focusing on races other than the presidential campaign. As its first initiative, the Fund announced the launch of WinTheSenate.org, an online campaign to raise up to $10 million in small donations for Democrats in ten of the tightest, most winnable Senate races.

What happens to Fight Back Fund if Kerry wins? If Bush wins?

We're going to take everything we've learned in the past year and use it to funnel $10 million into the most competitive Senate races this year. And starting Wednesday morning, November 3rd, we're going to do the same thing to win back the House in 2006. Over the coming years, online groups such as the Fight Back Fund are going to unleash hell on the Republicans. I don't think they fully understand what they're dealing with yet.

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527s have, indeed, taken on the political voice of the electorate. If you doubt that proposition, you need only look to the protestations raised by the Republicans regarding the activities of these groups during this election cycle. Then, look to such groups as Swift Boat Veterans for Truth. You'll see that the voice is growing stronger on both sides of the fence, regardless of how loud the protests may be.

Under constitutional protection, it seems that the 527s will only grow in influence in coming years. Though held to a tighter regulatory scheme, their formation is, in essence, no more difficult than that of a normal non-political non-profit. The tools of the Internet help spread the message in ways undreamed of only four years ago. As those tools are refined by experience, by success and by failure, the messages will become much more clear and much more focused on the untapped masses.

In an election, perhaps more than anywhere else, money talks. Fight Back Fund and other 527 groups are leading the conversation.

Posted by Tony Steidler-Dennison at August 7, 2004 11:10 PM