The black hole of political disclosureBy Breanna Edwards, Jake Harper, Rebecca Heller and Lindsay Young Jul 16 2012 3:53 p.m.
Our Sunlight Foundation colleague, Lee Drutman, has written elsewhere about the amount of dark money -- political donations that come without donors attached -- flowing into this year's campaign. But what about the conduits? As the Senate debates the DISCLOSE Act this week, a measure that would take modest steps towards adding a little transparency back into the campaign finance system, it's worth taking a look at the entities that are taking advantage of the loopholes that allow them to avoid disclosing -- sometimes just donors, sometimes just about everything.
The groups run the gamut from long established organizations with a defined social mission -- think League of Conservation Voters or the National Rifle Association -- to organizations that sprung up to take advantage of the Supreme Court's landmark 2010 ruling allowing incorporated entities to play directly in politics. These include the Republican Crossroads GPS, and the Democratic Patriot Majority USA. The dark money landscape also includes labor unions, such as the SEIU, and trade associations, like the U.S. Chamber of Commerce.
Some groups show up on the Federal Election Commission's tally of campaign spending when they make "independent expenditures" -- payments for advertisements, phone banking or other types of campaign activity that advocate directly for or against the election of a federal candidate. But as non-profit groups, they are not legally required to register with the FEC or to disclose their donors. Other groups never show up at the FEC at all, because they run ads and conduct activities that stop short of urging a vote for or against a candidate. If the groups time their activities right -- and don't spend within 30 days of a primary or 60 days of a general election, they can keep their spending, as well as their donors, off the FEC's books.
Sunlight's Reporting group looked at non-profit tax forms, known as 990, via Guidestar, to get a sense of the size of some of the biggest dark money groups (that we know about) and the amount they've spent on advertising, promotions, grassroots activism, media and lobbying. These categories can help uncover some of the impact of dark money, but they documents can be hard to find. And even when they're available, they're woefully outdated: most of the ones we found were from 2010.
Here's our field guide to some of the biggest of the dark money groups. Just like bird-watchers do, we're hoping you'll help us log further sightings!
Off the Radar spenders
These are groups that we know are politically active -- either because they are advertising, or because they have bragged about spending plans, or because news reports have described some of their activities. However these either filed no reports with the FEC or reported $0 in outside spending this election cycle.
Republican strategist Karl Rove’s creation, Crossroads GPS, organized as a policy and grassroots advocacy organization under section 501(c)4 of the U.S. tax code, is a sister to conservative super PAC giant American Crossroads. According to its 2011 tax forms, Crossroads GPS spent a whopping $19 million on “grassroots issue advocacy” and another $1.6 million on “political direct." One of the group’s latest targets is former Gov. Tim Kaine, D-Va., who is vying for his state's U.S. Senate seat. Crossroads GPS made a $1.1 million ad buy, linking Kaine to President Barack Obama's spending policies, The Washington Post reported. The group is also targeting the president, last week announcing an $8 million TV ad campaign in swing states that criticizes his economic record.
Americans for Prosperity (AFP) is an organization with big name donors like billionaire brothers David and Charles Koch and Harold Simmons, a member of Sunlight's roster of Stealthy Wealthy. In 2010, tax records indicate, the group earned $22 million in total revenue. AFP is extremely skilled at spreading its message while staying off of the disclosure radar. AFP bragged about the work it did helping Gov. Scott Walker, a Republican, weather a recall effort this year in Wisconsin. But the group never filed any reports on its spending or donations with local elections officials because it contended its work was educational, not political. A few clues are available about the extend of AFP's political efforts:
- A database compiled by the Gannett newspapers in the state revealed more than $1.5 million in ad spending as of one month before Election Day. )The Sunlight Foundation and its partners, Free Press and theNew America are in the process of updating what we know about ad spending in the Wisconsin race.)
- In 2010, IRS documents reveal, the organization spent $11.2 million on communication, ads and media.
- In a CBS interview, AFP President Tim Phillips highlighted the organization’s grassroots organizing ambitions for battleground states this year.
- While it files with the FEC it reports nothing, saying it is spending $0 and raising $0. Yet AFP shows up in in the Time Warner political ad buy database, placing orders for political ads June and July
American Energy Alliance (AEA), has been underwriting advertisements that blame President Obama for high gas prices. Its planned $3.6 million campaign is funded in part, by the Koch brothers, Politico reports. The group's president, Thomas Pyle, worked for Koch Industries as well as for ex-House Majority Leader Tom DeLay , a Texas Republican who is appealing his conviction on campaign finance violations. Pyle is president of both the American Energy Alliance, a 501(c)4 "social welfare" organization, as well as of the its sister organization, the Institute for Energy Research. The latter is organized as a 501(c)3 philanthropy -- meaning it can take tax deductible contributions. In a 990 form filed last year with the Internal Revenue Service, the American Energy Alliance described its mission as advancing policies that will result in "affordable, abundant and reliable energy" for American consumers. That apparently does not include alternative sources: Pyle wrote to Congress last May in opposition to tax incentives for wind energy. In 2010, the group's tax records indicate AEA’s total revenue was $2.6 million. The group has records with the FEC but reports no donors or spending.
Groups who don't report donors to the FEC
These groups report "independent expenditures" -- spending on ads, phone banks and other campaign items that advocate for or against the election of specific candidates -- to the FEC. But they do not have to identify the donors who are underwriting those activities.
The U.S. Chamber of Commerce is the premier trade association for big business and Sunlight's Influence Explorer catalogues the extent of its clout : Since the early 1990s, the Chamber has made nearly $63 million in campaign contributions and spent more than a half-billion dollars to lobby Congress since the early 1990s. It has become a lightning rod in the controversy over undisclosed political spending: Earlier this year, a report surfaced that New York Attorney General Eric Schneiderman is investigating transactions between the Chamber and its 501(c)3 partner organization for possible illegal campaign and lobbying expenditures. Moreover, a top Chamber official recently told reporters the trade association will make technical changes in the political advertisements its underwriting to avoid being forced to disclose the identity of the donors underwriting the ads. According to 2010 IRS records , the Chamber raised $198.5 million in revenue, spent $53.9 million on advertising and promotions and an additional $14.5 million on lobbying in 2010. So far this election, the chamber has spent $3.3 million on electioneering advertisements and $95,000 on ads supporting Orrin Hatch.
The Service Employees International Union represents roughly 2.1 million workers in health care, building maintenance and security, and local and state government. The union spent nearly $13.3 million on something called "political subsidies" in 2010, and more than $18.1 million on equally ambiguous “contributions and special.” SEIU contributions go almost exclusively to Democratic candidates, and independent expenditures for SEIU's affiliate Committee on Political Education total more than $2.1 million for the 2012 elections. The union is expected to spend a total of about $85 million in the 2012 elections, focusing on eight battleground states.
American Federation of State, County and Municipal Employees is a labor union that in 2011 claimed more than 1.4 million members and reported spending $49 million on political activities and lobbying. AFSCME recently elected its first African-American president, Lee Saunders. Since taking office last month, Saunders has promised to up the union’s ante in protecting labor rights , regardless of the losses the union has suffered in the past.
He replaces the unapologetically partisan Gerald McEntee, who before retiring boasted that his union spent $90 million in the 2010 congressional midterm elections through a plethora of committees. Following the 2010 Citizens United ruling, AFSCME can also spend directly on elections. The group has so far spent $1.5 million for this election cycle according to Follow the Unlimited Money . According to its 2010 tax forms, the group spent more than $2.5 million on advertising, as listed on its 2010 tax forms.
Former Minnesota Republican Senator Norm Coleman formed American Action Network, Inc. (AAN) in February 2010 and currently serves as chief executive officer. The group’s board consists of some prominent GOP fundraisers and donors, and former National Republican Congressional Campaign political director Brian Walsh is president. The organization’s 2010 990 form was unavailable, but to support Republicans running for Congress, the AAN reportedly spent $26 million, and recently launched a $10 million campaign for competitive congressional races. The self-described “action tank” has spent more than $1.1 million on independent expenditures so far this cycle. Coleman also started the Congressional Leadership Fund, which as of June 30 had raised more than $6.2 million , including a $1 million gift from Texas political sugar daddy Bob Perry. The Congressional Leadership Fund has yet to report any independent expenditures.
Planned Parenthood Action Fund Inc. – a New York-based pro-choice social welfare organization – ranks as the second biggest spender according to information filed with the FEC on independent expenditures. The group is concentrating its political influence onpresidential battleground states. According to their 2010 tax forms, Planned Parenthood Action Fund Inc. has spent over $2 million in advertising and over $1.5 million in independent expenditures; however, its donors remain unknown. 99% of the group’s independent expenditures have been put towards opposing Republican candidates – chiefly Mitt Romney. According to Politico, some of the group’s ads have had an impact on women in West Palm Beach, Fla., and Des Moines, Iowa, where they conducted a survey.
On the other side of the spectrum, the Susan B. Anthony List Inc. a pro-life social welfare organization, has made a name for itself through political ad buys and independent expenditures. Its independent expenditures have been focused solely on supporting Republican candidates – with the bulk of its money going to former Pennsylvania Sen. Rick Santorum in the presidential race. The remainder went to two state representatives: Rep. Alecia Dawn Webb-Edgington of Kentucky, who lost a GOP congressional primary earlier this year to a tea party-backed rival, and Rep. Cherilyn B. Eagar, R-Utah. So far this year it has only recorded a total of $522,000 in independent expenditures, but the group has spent over $3.5 million dollars on advertising according totheir 2010 filing with the FEC. And thanks to some legal loopholes, the group’s donors can remain in the dark as long as the money is filtered through a parent group.
The American Future Fund (AFF) was started in 2007 by Nick Ryan, former advisor to Rick Santorum and founder of Concordia Group, LLC. To promote its “conservative and free market principles,” AFF spent more than $17.3 million on advertising, media services and telecommunications in 2010, and Republican candidates won in 76 percent of the districts where it spent money. According to Factcheck.org, some of AFF’s 2010 ads are false or misleading, and the group has recently launched more, criticizing President Obama’s record and thanking Sen. Mitch McConnell for his defense of free speech. In this case, “free speech” means millions in secret donations by anonymous billionaires. The organization issued a press release announcing it had spent "nearly $4 million" on an slamming Obama in nine states called "Obama's Wall Street", but has only disclosed spending about $50,000 in independent expenditures this year, mostly to support Richard Mourdock, Indiana’s Republican candidate for U.S. Senate.
Patriot Majority USA, which emerged in 2010 to help Senate Majority Leader Harry Reid, D-Nev., win a tough race, has worked its way onto the list of big spenders, with its 2012 independent expenditures adding up to nearly $1.3 million. The pro-Democrat group’s energies have been focused primarily on a senatorial level. Follow the Unlimited Money shows that its spending has been split between efforts to oppose Sen. Dean Heller, R-Nev., and Sen. Dennis Ray Rehberg, R-Mo., and efforts to support Sen. Claire McCaskill, D-Mo. A 990 for Patrioit Majority USA could not be found.
The League of Conservation Voters is a 501(c)4 based in Washington that focuses on environmental issues. In 2010, the most recent year for which its tax forms are available, it reported $19.5 million in contributions, and spent a little less than $6 million on advertising. So far in this election cycle, the league has spent more than $1.7 million, Sunlight's Follow the Unlimited Money shows. The group has a tradition of targeting congressional opponents of its environmental policies by placing them on its Dirty Dozen list. These candidates are usually from swing districts where the League thinks it has a chance to oust them.
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