“I’m a se­cre­tive LLC with a mis­lead­ing name, and I ap­prove this mes­sage”

Non­prof­its are on track to spend more than ever on the 2016 race “It’s much harder for the pub­lic to see what’s go­ing on”

Bloomberg Businessweek (North America) - - Conntents - The bot­tom line Non­prof­its and LLCS are spend­ing mil­lions on political causes, but un­like su­per PACS, they can keep their donors se­cret.

Pres­i­den­tial cam­paigns face a Jan. 31 dead­line for dis­clos­ing their donors to the Fed­eral Elec­tion Com­mis­sion. So do su­per PACS, the in­de­pen­dent political groups that are al­lowed to raise un­lim­ited amounts of money from donors to sup­port spe­cific can­di­dates. The fil­ings, the first since June, will re­veal the iden­ti­ties of peo­ple who have spent mil­lions try­ing to in­flu­ence the out­come of the 2016 elec­tion.

But mil­lions more are be­ing spent by or­ga­ni­za­tions that are never re­quired to dis­close their donors at all: non­profit is­sue-ad­vo­cacy groups. Ac­cord­ing to Kan­tar Me­dia’s Cam­paign Me­dia Anal­y­sis Group data, such groups have spent more than $213.6 mil­lion on political ads in the cur­rent elec­tion cy­cle, $10.5 mil­lion of it for ads fo­cused on pres­i­den­tial can­di­dates. That puts the groups on track to ex­ceed the $309 mil­lion non­prof­its spent on ads and other political com­mu­ni­ca­tions in 2012, ac­cord­ing to the Cen­ter for Re­spon­sive Pol­i­tics.

Un­der cur­rent rules, non­profit ad­vo­cacy groups can spend up to 50 per­cent of their bud­get on political causes with­out ever hav­ing to re­veal any de­tails about the in­ter­ests of their fun­ders. Since the Supreme Court’s 2010 Cit­i­zens United de­ci­sion, which lifted re­stric­tions on political spend­ing for in­di­vid­u­als and cor­po­ra­tions, non­prof­its have been al­lowed to cam­paign for and against spe­cific can­di­dates. “The cam­paigns are more com­plex, as are the money net­works,” says Cen­ter for Re­spon­sive Pol­i­tics Ex­ec­u­tive Di­rec­tor Sheila Krumholz. “It’s much harder for the pub­lic to see what’s go­ing on be­hind the scenes.”

The big­gest spender in the pres­i­den­tial race among so-called dark money groups—those that don’t dis­close their donors—is the Con­ser­va­tive So­lu­tions Pro­ject, a non­profit formed in 2014 to sup­port Repub­li­can can­di­date Marco Ru­bio. (The Florida sen­a­tor also has an al­lied su­per PAC called Con­ser­va­tive So­lu­tions.) The non­profit has spent about $8.1 mil­lion on ads fea­tur­ing ex­cerpts of Ru­bio’s speeches. The group has spent $2.9 mil­lion on na­tional ca­ble, with the re­main­der di­vided among lo­cal sta­tions that reach view­ers in Iowa ($1.3 mil­lion), New Hamp­shire ($1.5 mil­lion), and South Carolina ($2.4 mil­lion). “They’re def­i­nitely gam­ing the sys­tem,” says Paul S. Ryan, ex­ec­u­tive di­rec­tor of the Cam­paign Le­gal Cen­ter, a watch­dog group that’s asked the Jus­tice Depart­ment to in­ves­ti­gate the group’s spend­ing, ar­gu­ing it con­sti­tutes a tan­gi­ble ben­e­fit for Ru­bio. The DOJ would nei­ther con­firm nor deny whether it’s in­ves­ti­gat­ing. Spokesman Jeff Sa­dosky says the group is sim­ply fo­cused on “ad­vo­cat­ing for a con­ser­va­tive agenda.”

How much money Con­ser­va­tive So­lu­tions Pro­ject has raised won’t be­come pub­lic un­til af­ter the elec­tion. Its an­nual tax re­turns are due four months af­ter the end of its fis­cal year in May. Fil­ers can get an au­to­matic four­month ex­ten­sion. That means in­for­ma­tion about its fundrais­ing and spend­ing dur­ing the pres­i­den­tial pri­mary sea­son won’t be­come pub­lic un­til 2017. Ru­bio isn’t the only can­di­date with non­profit back­ing. Jeb Bush has a group called Right to Rise Pol­icy So­lu­tions along­side his su­per PAC, called Right to Rise. The su­per PAC pays for ads, and the non­profit runs a web­site pro­mot­ing Bush’s po­si­tions on na­tional se­cu­rity, education re­form, and biomed­i­cal in­no­va­tion. Other non­profit groups that have gone af­ter pres­i­den­tial can­di­dates don’t have vis­i­ble links to ac­tive cam­paigns. The Foun­da­tion for a Se­cure and Pros­per­ous Amer­ica, a non­profit founded in 2007 to sup­port Repub­li­can John Mccain’s 2008 pres­i­den­tial run, spent $290,000 in April 2015 run­ning ads in Iowa, New Hamp­shire, and South Carolina at­tack­ing Rand Paul for sup­port­ing nu­clear ne­go­ti­a­tions with Iran. As re­cently as De­cem­ber 2014, ac­cord­ing to its most re­cent fil­ing with the IRS, the group had no in­come and was about $4,500 in the red.

Donors have also used lim­ited li­a­bil­ity cor­po­ra­tions to shield their political ac­tivism. An LLC called Op­por­tu­nity News Me­dia spent $14 mil­lion run­ning ads from July through Septem­ber in Ohio and Colorado that ended with this tag line: “There are still peo­ple who be­lieve op­por­tu­nity lives in Amer­ica, and we call our­selves Repub­li­cans.”

“There may have been one large donor who thought this was a great idea, or maybe it’s part of a larger strat­egy,” says Travis Rid­out, co-di­rec­tor of the Wes­leyan Me­dia Pro­ject, which stud­ies political ad­ver­tis­ing. “I’d be cu­ri­ous to know who’s fund­ing that.” �Bill Al­li­son

“They’re def­i­nitely gam­ing the sys­tem.” ——Cam­paign Le­gal Cen­ter Ex­ec­u­tive Di­rec­tor Paul S. Ryan

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