Entries in Not-for-profit (1)


Forget Super PAC’s, Outside Spending By Non-Profits, Businesses, Is Way More Secretive

iStockphoto/Thinkstock(NEW YORK) -- Super PACs aren’t the only deep-pocketed participants in this year’s elections.

Activity by independent expenditure committees, more commonly referred to as “Super PAC’s,” has dominated the political discourse since 2010, when a Supreme Court ruling in the case of Citizens United vs. the Federal Election Commission determined that corporations and unions could spend unlimited amounts of money on independent political expenditures.

Enter the Super PAC phenomenon. In 2012, these groups have been ubiquitous. Every major GOP candidate has had at least one Super PAC dedicated to his or her campaign, the majority of which were largely funded not by corporations, but rather by a handful of very wealthy and very generous donors.

However, there is another group of spenders who have been actively participating in the campaign cycle: non-profit groups and other businesses.  According to figures from the Campaign Media Analysis Group (CMAG), nonprofits and business groups have spent roughly $28 million on general-election related advertising so far. And these groups are much more secretive than Super PAC’s.

Super PAC’s have been heavily criticized for being “shadow campaigns” of the candidates they’re supporting. The groups typically spend money on the same types of political advertising as campaigns: mailers, voter contact sheets, and of course, TV ad buys. Additionally, the groups are frequently headed up by former employees of said candidate.

Restore Our Future, the Super PAC supporting Mitt Romney, was launched by Romney’s national policy director from his 2008 campaign, Carl Forti. The group’s treasurer, Charlie Spies, is also an alum of Romney’s 2008 campaign.

Priorities USA, the Super PAC supporting Barack Obama, was co-founded by two former Obama administration staffers, Bill Burton and Sean Sweeney.

However, for all the criticism they’ve received, these groups are relatively transparent. The FEC requires that Super PAC’s disclose their donors either once a month or once a quarter. Their disclosure schedule is up to the group, but each organization must submit the names of every donor, and the amount given by said donor.

The groups also notify the FEC of their expenditures within a 24- to-48 hour window, meaning that anyone can follow their activity in real (or at least slightly delayed) time.

The non-profit and other business groups however, are a different story. These groups take a variety of forms; they may be a not-for-profit organization that focuses on a particular issue, such as the environment, but also gives some of their money to specific campaigns. They may be even vaguer, their primary purpose may be to serve as a grassroots organization.

Because the primary purpose of these organizations is not listed as political activity, they are not subject to the same regulations as Super PAC’s and other political organizations. They are not required to disclose their donors; they do not submit monthly or quarterly financial reports; they do not file their expenditures with the FEC in real time or in any time for that matter. In short, their transparency level is akin to a heavy fog.

“In terms of organized groups, what we now have is essentially a voluntary system of disclosure in that donors are given the option of whether to give to an entity that discloses or one that does not,” explains Anthony Corrado, professor of government at Colby College.

“The fact that there is the opportunity to give contributions that are not disclosed strengthens the fundraising, and it allows you to receive contributions from those who might otherwise be hesitant to give because they don’t want their donation to be made public.”

Further complicating the already intricate world of these outside spending groups, the law is hazy at best when it comes to defining a group whose main purpose is to influence elections, such as an independent expenditure committee, versus a not-for-profit organization that just happens to spend some of its money on politically related activity.

“If your principle purpose is not to influence elections, then you have to file your form 990′s but you don’t have to give any details on where your money comes from,” Corrado notes. “The controversy is that there is no clear indicator of what fulfills that standard. There’s been no clear guidance by the IRS.”

As a result, these outside spending groups can be heavily involved in elections without ever having to disclose the source of their funds, so long as a sizable portion of said total funds is spent on non-political activity.

As the general election heats up, it’s likely that these groups will continue to spend heavily –- meaning that we may never actually know where a large portion of the money spent in 2012 actually came from.

Copyright 2012 ABC News Radio

ABC News Radio