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Money Matters: Late to the Party?

Democratic presidential nominee Sen. Barack Obama’s (Ill.) recent signal that he may look away this fall while left-leaning 527s do his party’s dirty work may send some political operatives scrambling for a plan — and perhaps last-minute financing.

[IMGCAP(1)]Political blogger Marc Ambinder wrote this week that Obama is ditching his year-old strategy of encouraging outside groups, which were a huge asset for Republicans during the previous presidential election, to stay away this cycle.

But can Obama simply flip on the outside financing switch, which he has bashed throughout his presidential bid, and expect the groups to come running? According to a prominent Democratic source who spoke with Money Matters, with eight weeks left until Election Day the answer is yes — but there is little room for error.

Perhaps most important, the source said, the liberal 527 community — not known for its ability to play nice together in the sandbox — needs to set egos aside until Nov. 5, the day after the election.

“There’s not going to be any magic bullet. One of the problems with the effort on the left to begin with was that there wasn’t a consensus around a single enterprise,” the source said. “There were competing interests [that] started during the primary: There were Clinton people and Obama people.”

Another possible caveat: Unlike political action committees, 527s typically serve as hands-on vanity projects for wealthy donors moonlighting as activists. When Obama “called off the

dogs” earlier this cycle, the source suggested, many would-be donors and organizers may have moved on to other gigs.

“Generally donors don’t give big pots of money for these types of efforts without some idea of what the payoff or message is going to be,” the source said.

But all hope may not be lost for Democrats. Unregulated outside political groups run by labor unions, which raise huge chunks of money in small increments from their members, continued to raise money despite Obama’s initial pleas.

Plus, building an ad campaign is hardly rocket science, the source said. “There are some filthy rich people in this country. If you take $50 million, $20 million, a pollster, creative people and an ad firm, you could probably make some noise.”

A union source agreed that organized labor has the best footing this late in the game, claiming that “it’s different for us,” and as a result may be the conduit for late pro-Obama independent ads.

“When Barack Obama said he didn’t want 527 groups, that didn’t impact us at all because our members were still going to give,” the source said. “That was important for us to see, but didn’t really have a direct impact on us.”

No Chance. Federal Election Commission lawyers recommended on Monday that online fundraising tools such as ActBlue cannot act as escrow accounts cycle-to-cycle, perhaps thwarting a loophole that could allow individuals and campaign committees to skirt federal campaign contribution caps.

The six-member commission panel is expected to rule on Thursday in the case of Boston resident Jonathan Zucker, who asked the agency on July 30 whether a contribution he sent the month before, which was “earmarked for the 2010 Democratic nominee for the United States Senate in Arizona,” counts toward this cycle’s cap or next.

Agency lawyers argue that Zucker’s contribution should count toward the 2007-08 caps.

“The answer to your question turns on when the contribution was ‘made.’ … A contribution is considered ‘made’ when the contributor relinquishes control over it,” FEC lawyers wrote in their draft guidance. “A credit card contribution is ‘made’ when the credit card or credit card number is presented, because at that point, the contributor is strictly obligated by the card agreement to make payment of the credit bill and incurs substantial penalties with possible collection fees and cancellation of future credit privileges.”

Earlier this cycle, the FEC agreed that ActBlue could raise money for the Democratic presidential nominee even before the nomination was officially bestowed at the Democratic National Convention two weeks ago.

As of late Tuesday, Zucker’s request was the lone item the agency was expected to take up at its meeting tomorrow.

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