Magazine says Newt Gingrich leads in fundraising

Twelve years after he resigned amid Republican Party defeats and ethics troubles, former longtime Georgia Congressman Newt Gingrich is "ascendant," a recent Esquire magazine article reported.

Gingrich, who gained renown for helping orchestrate the historic 1994 Republican takeover of Congress, has managed to maintain his position as the party's philosopher king, according to "Newt Gingrich: The Indispensable Republican" a profile by John H. Richardson.

This accomplishment may have produced real political gains. Although Gingrich has not said he is running, he is an early leader in polling for the 2012 presidential election, the article said. Plus, he's trouncing the competition in the thing that matters most in contemporary politics: raising cash.

This year, Gingrich "has raised as much money as Mitt Romney, Tim Pawlenty, Sarah Palin, and Mike Huckabee combined," the article states.

Is he really beating all of them? Even Palin?

Granted, the 2012 race is far from beginning in earnest, and Gingrich's real chances are unclear. Thanks in part to his conservative fan base, his name comes up regularly as a possible presidential contender, but he has yet to commit.

Still, his fundraising is well worth a look. Even though it's not clear whether Gingrich plans to run for president, federal law allows him to operate a "527 group," a type of political organization capable of raising massive amounts of money. His American Solutions for Winning the Future raised the cash mentioned in the Esquire article. It describes itself as "a unique tri-partisan organization designed to rise above traditional gridlocked partisanship, to provide real, significant solutions to the most important issues facing our country."

American Solutions has opposed stringent regulation of the energy industry and advocated for giving more leeway to school districts that want to fire mediocre teachers, among other things.

One of Esquire's fact-checkers backed up the article's claim by pointing us to a page on the website of Media Matters for America,a liberal group that fact-checks claims by the media. It referenced articles about the fundraising efforts of various political action committees, or PACs, and American Solutions. They show that American Solution's haul dwarfed those of the PACs for potential political candidates.

So what are PACs and 527 groups? We asked Paul Ryan,an attorney for the Campaign Legal Center,which advocates for campaign finance reform and strengthening federal ethics rules and enforcement. We also consulted Federal Election Commission rules and tax code.

It's complicated, so bear with us.

527 groups are a type of nonprofit named after the section of federal tax code that outlines what they can do. They exist to raise money to get a candidate elected.

Political action committees, or PACs, raise money to elect candidates, too. Many are also free from paying income tax under the same code that creates 527 groups. There are several types of PACs, and the kind that's controlled by candidates can't accept money directly from corporations or labor unions. They have strict donation limits that can be as small as $2,400 per individual.
527 groups such as Gingrich's try hard to avoid being regulated as a PAC, and that's a tricky business. A bunch of local, state and federal laws chime in on what it means to be a PAC, but if a 527 can avoid being pigeonholed, the payoff is big: Corporations and labor unions can give non-PAC 527 groups as much money as they choose and as often as they want. 

According to OpenSecrets.org, Newt Gingrich's 527 received $350,000 from a single corporate donor during the 2010 election cycle.

Politicians interested in running for major offices find it useful to start 527s or PACs to lay the groundwork for their campaigns. They help them exert influence over issues or races. Which one they start depends on how they want to spend.

Yes, 527s can raise far more money, but PACs can do things that 527s can't. For instance, by law, current federal officeholders have to play by PAC rules when they raise funds. And it's easier for a PAC to give money to a specific candidate.

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So 527 groups and PACs are not the same thing, a fact that the Esquire article acknowledges, albeit imperfectly. It said that 527s are barred from promoting the interests of a specific candidate when, in fact, that's what they're all about. But a lot of them avoid contributing to candidates to duck being regulated under tougher PAC rules.

Pawlenty, who is governor of Minnesota, does not have a 527 group, a PAC staffer confirmed. Press representatives of the other candidates did not respond to our requests for comment, and a Web search found no evidence that they currently have 527 groups either.

Now it's time to examine the numbers.

We looked up American Solutions' Internal Revenue Services filings, plus the FEC filings for the PACs of Huckabee, Palin, Pawlenty and Romney.

By June 30, American Solutions had raised $6,081,984.00.The others had raised $6,015,422.33. Gingrich wins.

Federal filings confirm that Gingrich has indeed raised more than the other candidates combined -- but with a very important caveat. Comparing 527 groups with PACs is not entirely fair because it's much easier for a 527 group to raise money.

The Esquire article acknowledged the difference between PACs and 527 groups. And while it mixed up some details, it got right the overall point that they're hard to compare.

Given that Esquire gave its statement adequate context, we rule this statement True.