Over the weekend, the New York Times published a sobering interview with the head of the Federal Election Commission, who confirmed that she had largely given up on the agency playing a meaningful role in restraining fundraising and spending abuses in the 2016 campaign. The commissioners are deadlocked, FEC chair Ann Ravel said, because Republican members of the commission think the FEC should exercise less robust oversight, meaning the agency has become “worse than dysfunctional” at a time when outside money is poised to play an even larger role than it did in the last two cycles.
When Republican Representative Cory Gardner of Colorado announced in March that he would run for the U.S. Senate, he knew he could count on backing from national Republican groups, including so-called super PACs. But he wasn’t allowed to talk to them directly. Federal election law prohibits campaigns from having contact with the super PACs and advocacy organizations that have come to dominate political spending since the U.S. Supreme Court’s 2010 Citizens United v. Federal Election Commission decision. Those rules were intended to put a wall between candidates, whose fundraising is constrained by federal limits, and special interest groups allowed to spend unlimited amounts of money promoting candidates and issues. In practice, campaigns have found ways to talk to super PACs while staying on the right side of the law. Gardner’s race illustrates how the system works. Within weeks of his declaring his Senate run, Americans for Prosperity, backed by billionaire brothers Charles and David Koch, told the Washington Post it would spend $970,000 on three weeks of television, radio, and online ads attacking incumbent Democratic Senator Mark Udall. That news was a signal that Gardner, who was unopposed in the primary, could hang back and focus on raising money—even as Democratic groups began running their own ads attacking him.
If you’re concerned about “dark money” in politics and the tsunami of cash from the super-wealthy and corporations pouring into the political system, or if you were outraged by the recent “scandal” involving the IRS’s clumsy assessment of 501(c)(4) groups, your ears probably perked up when you heard that the Internal Revenue Service has issued draft regulations to “provide clarity” to the rules that govern so-called “social welfare” organizations. Yet the new regs will do almost nothing to fix the things you think are broken and may, in fact, do some real damage to the ability of everyday Americans to have an impact on the political process. The proposed rules cover 501(c)(4) groups, named for the section of the tax code that governs them. Although this is the segment of the nonprofit world best known for notorious organizations like Karl Rove’s Crossroads GPS, it is actually made up of over 86,000 mostly small organizations nationwide, some of which are almost certainly active participants in your own community’s civic life. They weren’t invented in the last election cycle; they’ve been around for generations. Their purpose isn’t to hide donors but to advance policies. The big, famous guys and the shady newcomers get all the attention, but they aren’t typical of the sector, any more than Lady Gaga and Justin Bieber reflect the experience of the bulk of the people making a living in the music industry.
Campaign-finance activists vowed to take the Federal Election Commission to court Thursday after it disregarded a finding by its staff that Crossroads GPS, conservative nonprofit backed by Karl Rove, likely broke campaign laws during the 2010 elections. On Friday, the FEC quietly released a legal opinion by its staff lawyers that found that the “major purpose” of Crossroads GPS was to elect federal candidates, despite being registered as a “social-welfare” nonprofit group. The FEC’s general counsel recommended holding a formal investigation into the group. However, the FEC decided not to take any action after a deadlocked 3-3 vote by its commissioners along party lines. On Thursday, that decision drew sharp criticism from campaign-finance activists.
There’s an irony in the Internal Revenue Service’s crackdown on conservative groups. The nation’s tax agency has admitted to inappropriately scrutinizing smaller tea party organizations that applied for tax-exempt status, and senior Treasury Department officials were notified in the midst of the 2012 presidential election season that an internal investigation was underway. But the IRS largely maintained a hands-off policy with the much larger, big-budget organizations on the left and right that were most influential in the elections and are organized under a section of the tax code that allows them to hide their donors.
The Internal Revenue Service was absolutely correct to look into the abuse of the tax code by political organizations masquerading as “social welfare” groups over the last three years. The agency’s mistake — and it was a serious one — was focusing on groups with “Tea Party” in their name or those criticizing how the country is run. The I.R.S. should have used a neutral test to scrutinize every group seeking a tax exemption for “social welfare” activity — Democrat or Republican, conservative or liberal. Any group claiming tax-exempt status under Section 501(c)(4) of the internal revenue code can collect unlimited and undisclosed contributions, and many took in tens of millions. They are not supposed to spend the majority of their money on political activities, but the I.R.S. has rarely stopped the big ones from polluting the political system with unaccountable cash.
Federal Election Commissioner Caroline Hunter’s term expired on April 30. This wouldn’t be newsworthy except for one thing: It means that as of now, all the members of the agency that enforces the nation’s campaign laws—and is supposed to oversee the flood of money candidates and their allies spend—are working on borrowed time. President Obama hasn’t nominated anyone to succeed them. So the current commissioners are simply lingering in their expired seats. To say the FEC is broken is a parody of understatement. The agency’s structure—three Democratic commissioners and three Republicans, serving single six-year terms—means it often deadlocks along party lines. That’s what happened when it tried to update its own regulations in the aftermath of the 2010 Supreme Court decision in Citizens United, the case that helped open the door to unlimited political spending. The commission’s three Democrats wanted to consider tightening disclosure requirements; the Republicans insisted on reviewing only those rules that conflicted with the court’s ruling. That put the commissioners on the sidelines when spending by independent groups tripled to $1 billion in 2012, up from $300 million in 2008, according to the Center for Responsive Politics, a research group that tracks campaign spending.
It is an open scandal in Washington that the Federal Election Commission is completely ossified as the referee and penalizer of abuses in national politics. Karl Rove’s powerful Crossroads GPS money machine cruelly underlined the agency’s impotence last week with a snippy rebuff of a legitimate inquiry from the commission staff about the shadowy sources of the group’s war chest. Crossroads GPS archly replied that continued inquiries on the matter “are unnecessary,” but that if they keep coming, it will offer the same unrevealing response.
It has been suggested, here and elsewhere, that Fox News effectively became part of the Republican propaganda apparatus during the presidential campaign by giving pundit slots to many of the Republican candidates and relentlessly advocating for Mitt Romney once he won the nomination. Over many months, Fox lulled its conservative base with agitprop: that President Obama was a clear failure, that a majority of Americans saw Mr. Romney as a good alternative in hard times, and that polls showing otherwise were politically motivated and not to be believed. But on Tuesday night, the people in charge of Fox News were confronted with a stark choice after it became clear that Mr. Romney had fallen short: was Fox, first and foremost, a place for advocacy or a place for news? In this moment, at least, Fox chose news.
Supreme Court Chief Justice William Rehnquist began his political career intimidating blacks and Hispanics waiting in line to vote in his home state of Arizona. It was 1964 and Rehnquist, a practicing lawyer at the time, demanded to see identification and conversed with Hispanics to determine if they spoke sufficient English to vote. He was working as part of “Operation Eagle Eye,” a Republican plan to suppress the vote. In 2012, nearly half a century later, the Kochs and Karl Rove have fueled legislation to require stringent voter identification in states they helped pack with Republican lawmakers and governors in the 2010 Republican sweep. They turned that sweep into a below-the-national-radar campaign to suppress voter turnout in this election cycle, including in the battleground states of Wisconsin, Pennsylvania, Ohio and Florida. Like cheap paper targets at a carnival shooting gallery, the courts have at least temporarily shot down almost every onerous voter ID law that has passed in the last two years to protect Americans from “voter fraud” that doesn’t appear to exist.
This year, 32 states will be holding contested elections or retention votes for judges on their highest courts. An ideological battle inFlorida, an expensive and partisan one in North Carolina and others are providing uncomfortable lessons about why judges on the highest courts should be appointed rather than elected. Elections turn judges into politicians, and the need to raise money to finance ever more expensive campaigns makes the judiciary more vulnerable to improper influence by donors.Special interests, like the casino, energy and hospital industries and others, have been heavily involved and sometimes find their ways around disclosure rules and exert their influence through independent expenditures, reducing race after race into a contest of slogans. In six states where spending has been especially heavy — Alabama, Illinois, Michigan, Ohio, Pennsylvania and Texas — the harm to justice is well documented.
Two conservative nonprofits, Crossroads GPS and Americans for Prosperity, have poured almost $60 million into TV ads to influence the presidential race so far, outgunning all super PACs put together, new spending estimates show. These nonprofits, also known as 501(c)(4)s or c4s for their section of the tax code, don’t have to disclose their donors to the public. The two nonprofits had outspent all other types of outside spending groups in this election cycle, including political parties, unions, trade associations and political action committees, a ProPublica analysis of data provided by Kantar Media’s Campaign Media Analysis Group, or CMAG, found. Super PACs, which do have to report their donors, spent an estimated $55.7 million on TV ads mentioning a presidential candidate, CMAG data shows. Parties spent $22.5 million.
The ploy of disguising secretly financed political machines as tax-exempt “social welfare” organizations has become one of the alarming trademarks of modern, big-money politics. Under cover of the tax code, the identities of donors are kept secret while they pay for attack ads against candidates, all the while claiming their main purpose is civic and nonpartisan. Operatives from both parties have gotten deep into this shell game. Fortunately, the Internal Revenue Service is, at last, promising to review and consider changing 50-year-old rules governing the limits of political activity for social welfare nonprofits that enjoy exemptions under section 501(c)(4) of the tax code. This is encouraging news for voters in the dark as ads thunder away and for taxpayers who underwrite the abuse. It follows a court finding that the Federal Election Commission had arbitrarily weakened disclosure requirements.
Secretive outside groups shelling out millions of dollars for political advertisements could now be required to disclose the donors who cut them big checks. Responding to a recent court decision, the Federal Election Commission said Friday that it will force nonprofit groups that air ads that refer to specific federal candidates, but don’t overtly advocate for or against them, to report the names and addresses of donors who give more than $1,000. The FEC’s enforcement could affect nonprofits such as the Karl Rove-backed conservative group Crossroads GPS, the U.S. Chamber of Commerce and the Democratic group Priorities USA. Those groups have been able to raise unlimited amounts from donors, but haven’t been forced to disclose their names. The agency will require groups to report their donors retroactively, it said Friday. Groups will be forced to report donors who gave more than $1,000 since March 30, 2012.
For all the headlines and hand-wringing about super-PACs, it is dark-money nonprofits like Karl Rove’s Crossroads GPS and Americans for Prosperity that dominate the political money wars. These politically oriented groups, which keep their donors secret, outspent super-PACs 3-to-2 in the 2010 elections. Through the spring of 2012, 91 percent of advertising by independent groups came from nonprofits and big business trade groups. And a growing pile of evidence suggests that it’s these nonprofits, not super-PACs, hauling in the bulk of corporate political cash. But come Saturday, the dark-money nonprofits face a dilemma. A high-profile court case known as Van Hollen v. FEC threatens to shine an unwelcome beam of sunlight on donors bankrolling these organizations. Nothing’s stopping Crossroads GPS or AFP from running more “issue” ads hitting Obama and other Democrats (that is, ads that don’t explicitly say “vote for” or “vote against”). Except now nonprofits will have to reveal who funded those spots. Dark-money nonprofits don’t want to name names. Their pitch to donors includes the promise of anonymity and a shield from public scrutiny. This means that Crossroads GPS and other politically active nonprofits—which aren’t supposed to make politicking their primary purpose—have to rethink their ad strategy, election experts say. Do they shift money to super-PACs? Go dark in the months before the election? Find another loophole to run ads and keep their donors secret?
Voting rights groups are struggling to hold back a tide of new laws that are likely to make it harder for millions of Americans to vote in the presidential election in November and could distort the outcome of the race for the White House. Since January 2011, 19 states have passed a total of 24 laws that create hurdles between voters and the ballot box. Some states are newly requiring people to show government-issued photo cards at polling stations. Others have whittled down early voting hours, imposed restrictions on registration of new voters, banned people with criminal records from voting or attempted to purge eligible voters from the electoral roll. The assault on voter rights is particularly acute in key swing states where the presidential race is likely to be settled. Five of the nine key battleground states identified by the Republican strategist Karl Rove have introduced laws that could suppress turnout – Florida, Iowa, New Hampshire, Ohio and Virginia. Between them, the states that have imposed restrictions account for the lion’s share of the 270 electoral college votes that Barack Obama or Mitt Romney must win to take the presidency. Sixteen of the states that have passed new voter restrictions between them hold 214 electoral votes. “We are seeing a dramatic assault on voting rights, the most significant pushback on democratic participation that we’ve seen in decades,” said Wendy Weiser of the non-partisan thinktank the Brennan Center for Justice, and the co-author of the definitive study of US voter suppression in the 2012 election cycle. “These laws could make it harder for millions of eligible American citizens to participate, particularly in swing states.”
When the super PAC backing Mitt Romney, Restore Our Future, files its June donation report on Friday with the Federal Election Commission, it is expected to show a six-figure contribution from Wyoming businessman Foster Friess, his first to the group. But an unwelcome scrutiny came to Friess, Nevada billionaire Sheldon Adelson and some of the other wealthy donors to these super PACs, and some are planning for much of their future generosity to be behind a cloak of anonymity. Friess said he has decided his financial donations in the future will mostly be to groups that do not have to disclose their donors. He said he is planning on contributing to five or six so-called 501(c)(4) groups named after the section of the tax code they are organized under. These are nonprofit organizations that can advocate on behalf of social welfare causes or to further the community. He refused to discuss which groups, but did say one recipient could be an affiliate of American Crossroads, the group founded by Karl Rove.
“A hundred million dollars is nothing,” the venture capitalist Andy Rappaport told me back in the summer of 2004. This was at a moment when wealthy liberals like George Soros and Peter Lewis were looking to influence national politics by financing their own voter-turnout machine and TV ads and by creating an investment fund for start-ups. Rappaport’s statement struck me as an expression of supreme hubris. In American politics at that time, $100 million really meant something. Eight years later, of course, his pronouncement seems quaint. Conservative groups alone, including a super PAC led by Karl Rove and another group backed by the brothers Charles and David Koch, will likely spend more than a billion dollars trying to take down Barack Obama by the time November rolls around. The reason for this exponential leap in political spending, if you talk to most Democrats or read most news reports, comes down to two words: Citizens United. The term is shorthand for a Supreme Court decision that gave corporations much of the same right to political speech as individuals have, thus removing virtually any restriction on corporate money in politics. The oft-repeated narrative of 2012 goes like this: Citizens United unleashed a torrent of money from businesses and the multimillionaires who run them, and as a result we are now seeing the corporate takeover of American politics.
During their long campaign to loosen rules on campaign money, conservatives argued that there was a simpler way to prevent corruption: transparency. Get rid of limits on contributions and spending, they said, but make sure voters know where the money is coming from. Today, with those fundraising restrictions largely removed, many conservatives have changed their tune. They now say disclosure could be an enemy of free speech. High-profile donors could face bullying and harassment from liberals out to “muzzle” their opponents, Sen. Minority Leader Mitch McConnell, R-Ky., said in a recent speech. Corporations could be subject to boycotts and pickets, warned the Wall Street Journal editorial page this spring. Democrats “want to intimidate people into not giving to these conservative efforts,” said Republican strategist Karl Rove on Fox News. “I think it’s shameful.” Rove helped found American Crossroads, a “super PAC,” and Crossroads GPS, a nonprofit group that does not reveal its donors. “Disclosure is the one area where (conservatives) haven’t won,” said Richard Briffault, an election law professor at Columbia Law School. “This is the next frontier for them.”
Former Alabama Gov. Don Siegelman was charged with bribery and sent to prison because, prosecutors said, a wealthy hospital executive gave him $500,000 in exchange for appointing him to a state hospital planning board. But this half-million-dollar “bribe” did not enrich Siegelman. Instead, the disputed money was a contribution to help fund a statewide referendum on whether Alabama should have a state lottery to support education, a pet cause of the governor’s. The Supreme Court is set to decide as soon as Monday whether to hear Siegelman’s final appeal, which raises a far-reaching question: Is a campaign contribution a bribe if a politician agrees to do something in return, or is it to be expected that politicians will do favors for their biggest supporters?
Republican super PACs and other outside groups shaped by a loose network of prominent conservatives – including Karl Rove, the Koch brothers and Tom Donohue of the U.S. Chamber of Commerce – plan to spend roughly $1 billion on November’s elections for the White House and control of Congress, according to officials familiar with the groups’ internal operations. That total includes previously undisclosed plans for newly aggressive spending by the Koch brothers, who are steering funding to build sophisticated, county-by-county operations in key states. POLITICO has learned that Koch-related organizations plan to spend about $400 million ahead of the 2012 elections – twice what they had been expected to commit. Just the spending linked to the Koch network is more than the $370 million that John McCain raised for his entire presidential campaign four years ago. And the $1 billion total surpasses the $750 million that Barack Obama, one of the most prolific fundraisers ever, collected for his 2008 campaign.
This past March, standing outside a Shell station in Mellen, Wis., in the state’s far north, Mike Wiggins Jr. told me about a series of dark and premonitory dreams he had two years earlier. “One of them was a very vivid trip around the North Woods and seeing forests bleeding and sludge from a creek emptying into the Bad River,” Wiggins said. “I ended up at a dilapidated northern log home with rotten snowshoes falling off the wall. I stepped out of the lodge, walked through some pine, and I was in a pipeline. There was a big pipe coming in and out of the ground as far as I could see. “I had no idea what the hell that was all about,” Wiggins continued. But he said the dream became clearer when a stranger named Matt Fifield came into his office several months later and handed him his card. Wiggins is the chairman of the Bad River Band of Lake Superior Chippewa, and Fifield, the managing director of Gogebic Taconite (GTac), a division of the Cline Group, a mining company based in Florida. He had come to Wiggins’s office to discuss GTac’s desire to build a $1.5 billion open-pit iron-ore mine in the Penokee Hills, about seven miles south of the Bad River reservation. The proposed mine would be several hundred feet deep, roughly four miles long and a half-mile wide; the company estimated it would bring 700 long-term jobs to the area. Fearing contamination of the local groundwater and pristine rivers, Wiggins told Fifield he planned to oppose the mine. He didn’t know at the time that the company’s lawyers would be working hand in hand with Republican legislators to draft a bill that would weaken Wisconsin environmental law and expedite the permitting process.
Strangely enough, the 2012 presidential campaign, expected to be the dirtiest in modern memory, may end up being relatively clean. That’s because both sides agree that the economy is the central issue and that sideshows like the Reverend Jeremiah Wright aren’t persuasive for voters. Karl Rove and Larry McCarthy, the creator of the infamous Willie Horton ad, think harsh personal attacks against President Barack Obama will backfire, and they’re offering more subtle messages of economic disappointment instead. Even economic assaults can boomerang nowadays. Newark Mayor Cory Booker, an otherwise strong Obama supporter, dealt the Obama campaign a blow last weekend on NBC’s “Meet the Press” when he said he was “nauseated” by an Obama ad lambasting Mitt Romney’s tenure at Bain Capital LLC. The president’s defense of the ad, in which he said “there are folks who do good work” in private equity, was too complicated to be effective. The controversy surrounding the Bain ad and a proposed Wright ad from a super-PAC backed by Joe Ricketts, the billionaire founder of TD Ameritrade Holding Corp. (AMTD), suggests that when “paid media” in the presidential race ventures out-of- bounds, “free media” will exact a penalty. (House and Senate races are another story.)
Editorials: Is Campaign Disclosure Heading Back to the Supreme Court? – Don’t expect to see Karl Rove’s Rolodex just yet | Rick Hasen/Slate Magazine
The news this week that a federal appeals court has refused to block a lower court ruling requiring the disclosure of more funders of campaign ads has campaign finance reformers tasting their first victory in a long time. “It’s the first major breakthrough in overcoming the massive amounts of secret contributions that are flowing into federal elections,” Fred Wertheimer of Democracy 21 told the Los Angeles Times. But don’t expect to see Karl Rove’s Rolodex just yet. Crossroads GPS and other groups have found that raising money from donors who don’t want to be disclosed is good for business, and they’ve got a few ways to keep the unlimited money poured into campaigns secret yet. And before you get too excited it’s worth considering that the Supreme Court could well help them keep their secrets in 2012, even though the court has so far been a big supporter of disclosure laws.
Since 1974, federal campaign finance law has required the disclosure of campaign donors and spenders. Opponents of disclosure have long argued that at least some disclosure is unconstitutional under the First Amendment’s guarantee of free speech and association, because compelling someone to reveal the names of those funding political speech will chill vigorous participation in politics. As I’ve explained, the Supreme Court rejected that constitutional challenge in the 1976 campaign finance case, Buckley v. Valeo. Confronted in that instance with a law that required disclosure of even very small contributions, the court held that the disclosure laws were justified by three important government interests: First, disclosure laws can prevent corruption and the appearance of corruption. Second, disclosure laws provide valuable information to voters. (A busy public relies on disclosure information more than ever.) Third, disclosure laws help enforce other campaign finance laws, like the ban on foreign money in elections. But the court has repeatedly said that if someone could demonstrate a real threat of harassment, they could be exempt from the disclosure laws.
National: Campaign Finance Disclosure Decision Means Rove, Others Could Suddenly Have To Disclose Donors | Huffington Post
One of the most consequential campaign finance loopholes affecting the 2012 race — the one allowing big-money donors to secretly funnel millions into campaign ads — is now closed, after an appellate court ruling on Monday. In April, a district court judge struck down a Federal Election Commission regulation that allowed donors to certain nonprofit groups — including those created by Karl Rove and the Koch brothers — to evade normal disclosure requirements. And on Monday, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit turned down a request to stay that ruling on a 2 to 1 vote. “This case represents the first major breakthrough in the effort to restore for the public the disclosure of contributors who are secretly providing massive amounts to influence federal elections,” said Democracy 21 President Fred Wertheimer, one of the lawyers who filed the original lawsuit that led to the April decision, in a statement. The office of House Administration Committee ranking Democrat Robert A. Brady issued a statement Tuesday saying, “As of today, any entity creating electioneering communications will have to disclose the identity of their top donors.”