Donors give money with less disclosure

During Richard Nixon’s re-election campaign in 1972, “contributors were flying into Washington with satchels of cash,” according to a recent New York Times article, “Return of the Secret Donors.” Although his election fell right before a campaign finance law went into effect, more than 30 years later secretive contributions are
still prevalent.

Earlier this year, a Supreme Court decision in the Citizens United v. Federal Election Commission case, declared the government is now banned from capping a corporation’s spending in elections. For the first time, nonprofit groups can also anonymously finance ads directly supporting or opposing a candidate.

From 2000 to 2008, the total cost of all federal elections increased 71 percent.
According to a recent study from the Public Citizen, a consumer advocacy organization, in 2004 and 2006, the large majority of independent groups revealed their donors.
But in 2008, only half of these groups disclosed their donors, and this year, that number has shrunk to a mere 32 percent.

If organizations wanted to influence an election before the decision, they could contribute to a Political Action Committee.

These groups are limited on how much they can contribute to a candidate, party or other PACs and were required to detail their donations or expenses as
public information.

Included in the Supreme Court’s Citizens United decision, independent expenditure committees known as 501(c) 4, 5 and 6 groups, named after a section of the tax code, are not allowed to directly contribute to candidates or parties, but they can advocate for or against a candidate by name without limit, such as in advertising.

They also don’t have to detail contributors because their main purpose is progressing social welfare, not politics.

Groups that are included in the “independent expenditure” category include unions and non-profit, tax-exempt organizations that have gained social welfare status by the Internal Revenue Service.

In response to the Citizens United decision, Democrats unsuccessfully tried to pass the Disclose Act, which would require corporations and unions to release details of their donors.

“Right now it looks like the Democratic Party is heading for a loss, so they are looking for someone to blame,” said Professor Leslie Lenkowsky of the School of Public and Environmental Affairs. “Easy to blame a Supreme Court Case.”

According to the Center for Public Integrity, GOP-allied independent groups spent $18.1 million on Senate ads from Aug. 1 to Sept. 20, 2010, while Democratic groups spent $2.6 million in the same time period. In U.S. House races, the GOP groups spent $6.7 million compared to $2.3 million by Democrats.

Such groups include American Crossroads, a non-profit group founded by former
President George W. Bush’s adviser Karl Rove and former Republican National Committee Chairman Ed Gillepsie.

American Crossroads funnels most of its money through its sister branch, Crossroads GPS, an independent expenditure organization, according to www.sourcewatch.org.

American Crossroads said it plans to spend $50 million this year to help GOP Senate and House candidates with television ads.

According to the Center for Public Integrity, Americans for Prosperity was the largest spender on House races in a one-month period during last summer. It plans to spend $45 million this year. 

According to its website, the American Future Fund, an independent expenditure committee, has launched a series of expensive ads targeting liberal
congressional candidates.

This past month the organization unleashed a television ad in Illinois opposing Democrat congressional candidate Phil Hare. It also reserved $1 million in Iowa’s 1st District this fall, as well as a $4 million television campaign that encompasses congressional seats in 13 different states, including Massachusetts, Illinois, Iowa and Washington.

While it is difficult to say who is funding these groups, there have been some links.
American Future Fund said it specifically targets members of Congress who vote with Nancy Pelosi more than 87 percent of the time and members of Congress who support government-run health care, bailouts and the various stimulus packages.

Like American Future Fund, many of these conservative groups play a leading role against Democrat-backed initiatives.

This may explain why groups like Southwest Louisiana Lands, Dixie Rice Agricultural Corporation and the CEO and president of Chief Oil and Gas each contributed $1 million to the American Crossroads groups, according to the Federal Elections Committee website.

Bruce Rastetter, co-founder of Hawkeye Energy Holdings, one of the country’s largest ethanol producers, also served as a major contributor to the American
Future Fund.

Groups helping to fund the Democratic candidates in this year’s elections include America’s Union Movement, Congress of Industrial Organizations, Service Employees International Union, United Food and Commercial Workers and American Federation of State, County and Municipal Employees, as well as all unions and all independent expenditure groups.  

Despite the surge in spending for this year’s election, Lenkowsky said he doubts election results will be effected, noting Meg Whitman has spent $140 million or so of her own fortune in the California Gubernatorial election and is still trailing in the polls.

“Past experience suggests there is not a very direct correlation between any kind of election spending and the success of candidates,” Lenkowsky said. “It could change, but I tend to doubt it. Organization counts, issues still count.”