Secretive donations top $170M in contests
WASHINGTON — In June, Scott Renfroe, a Colorado state senator running in a crowded GOP congressional primary, was hit with a slashing attack ad that accused him of supporting “taxpayer-funded bailouts” for a failed local bank.
“Not conservative,” declared the ad run by a Denver-based nonprofit called Citizens for a Sound Government. The spot hit two weeks before the primary, which Renfroe lost by 20 points.
The innocuous-sounding group was among a wave of organizations funded by secret donors that set a new high-water mark in the 2014 midterms, spending more than $170 million on congressional races, according to the nonpartisan Center for Responsive Politics.
And as the Renfroe case suggests, it wasn’t just high-profile, expensive Senate contests: Secret-money groups had a major presence in more than two dozen lesser-known House races as well, according to a Washington Post analysis of campaign finance data
compiled by the center.
In 13 House races, non-disclosing groups spent at least $1 million on political ads and voter outreach. In another 17 House campaigns, they made up more than half of the spending by independent groups.
The money spent by socalled “dark money” groups heavily favored Republicans, but a large chunk was also spent by liberal groups such as Patriot Majority and VoteVets.org.
The overall reach of groups financed by unknown donors was much bigger, as the analysis only includes campaign expenditures reported to the Federal Election Commission. Several hundred million dollars more was estimated to have been spent by tax-exempt groups on so-called “issue ads,” data gathering and voter outreach that was not disclosed publicly.
“People are sick of it,” said Sen. Jon Tester, D-Mont., a critic of secret money in campaigns who is set to be chairman of the Democratic Senatorial Campaign Committee next year.
Tester introduced a bill this month that would require nonprofits that report campaign-related spending to disclose any donors who give them at least $5,000 in a year. The legislation faces an uphill climb, as Republicans who will control both chambers of Congress next year have been hostile to such measures.
“The voters deserve to know who is trying to influence our elections,” Tester said. “They’re not doing it for no reason. I think they’re expecting a policy decision.”
Conservatives who defend keeping donors’ names private said the right of anonymous speech is essential, noting that Senate Majority Leader Harry Reid, D-Nev., spent much of this year publicly assailing the billionaires Charles and David Koch for their political activities.
“Increasingly, politicians in Washington want to shut down debate and silence those that disagree with them,” said James Davis, a spokesman for Freedom Partners
“The voters deserve to know who is trying to influence our elections. They’re not doing it for no reason. I think they’re expecting a policy decision.” — Sen. Jon Tester, D-Mont.
Chamber of Commerce, a tax-exempt group backed by the Kochs and other big donors on the right.
Much of the secret money injected into House campaigns this year was spent by well-known nonprofit advocacy groups such as the U.S. Chamber of Commerce, the National Rifle Association and the League of Conservation Voters, which have taken advantage of a Supreme Court decision allowing corporations to spend money directly on politics.
But the 2014 midterms also saw a slew of new groups powered by unknown financiers crop up in down-ballot races. Some were set up as super PACs that must reveal their donors but only reported getting money from non-disclosing nonprofits — leaving questions about who is ultimately financing their activities.
One such entity, Hometown Freedom Action Network, a super PAC based in Ohio, ran $123,000 worth of mobile ads supporting Don Ytterberg, a Republican challenging Democratic Rep. Edwin Perlmutter in Colorado. The group is funded solely by two Ohio nonprofits, A Public Voice and the Government Integrity Fund.
The Government Integrity Fund — run by Tom Norris, an Ohio lobbyist for the concrete industry — drew headlines in 2012 when it financed heavy attacks against Democratic incumbent U.S. Sen. Sherrod Brown in Ohio.
This year, the tax-exempt organization expanded its reach, pouring money into four super PACs that supported GOP candidates in the Arkansas, Georgia, Minnesota and Nebraska Senate races, as well as House campaigns in Arizona, Colorado and New York, according to Federal Election Commission filings.
Norris did not respond to requests for comment.
Groups funded by unknown donors have expanded their political engagement as federal regulators have taken a hands-off approach to scrutinizing their activities.
A politically divided six-member election commission has deadlocked on major disclosure cases involving nonprofits. The agency faces new pressure to tighten its rules after a federal judge on Tuesday threw out an election commission disclosure regulation as too narrow.
At the Internal Revenue Service, which oversees tax-exempt groups, officials are undergoing an extensive reassessment of how they judge political activities by nonprofits in the wake of accusations that the agency improperly targeted certain groups for investigation.
Groups funded by secret donors, meanwhile, are becoming political mainstays.
One prime example was the hotly contested Nevada congressional race this year between incumbent Republican Joe Heck and Democratic challenger Erin Bilbray, where $1.8 million was spent by independent groups. Of that amount, 69 percent came from non-disclosing organizations such as the National Association of Realtors, the U.S. Chamber of Commerce and the Everytown for Gun Safety Action Fund.
One of the most robust secret-money groups in 2014 was the Kentucky Opportunity Coalition, a tax-exempt organization that spent more than $13 million boosting Senate Minority Leader Mitch McConnell, including $7.5 million in ads directly advocating for his re-election.
Scott Jennings, an adviser to the group, said in a statement that it “engaged in limited political activity, but the organization’s mission and expenditures are geared toward the broader policy environment as it relates to the well-being of Kentuckians.”
That argument was rejected by Melanie Sloan, executive director of the liberal-leaning watchdog group Citizens for Responsibility and Ethics in Washington, which filed an IRS complaint Monday charging that the organization functioned for the private benefit a single politician, a violation of tax law.
“It matters so much, because we have no idea what politicians are doing for that money,” said Sloan, who predicted that every presidential candidate in 2016 will be boosted by a secret-money group.
Officials who ran some of the major non-disclosing groups this year said they helped contribute to a robust public dialogue.
“Healthy debate fosters the competition of ideas in a favorable way, and I think that’s good for democracy,” said Alan Philp, president of Citizens for a Sound Government and a former Republican National Committee staffer.
The nonprofit, which Philp formed in 2011 with two other GOP operatives, reported just $10,000 in income during its first year of existence, according to tax forms. This year, the group poured more than $45,000 into defeating Renfroe in the Colorado House race, and put more than $1 million into gubernatorial races in Connecticut and Nebraska. The organization also got involved in the U.S. Senate race in Alaska and a House race in Arizona, Philp said.
“We seek to engage the citizenry in a discussion and debate over issues and candidates across the country,” he said. “Our task is far more than just political races.”
For his part, Renfroe said he doesn’t have any idea who financed the ad slamming his conservative credentials.
“There are a lot of groups out there that have nice-sounding names, and you don’t know who is behind some of them,” said the state senator, who blamed the flow of money to independent groups on the strict limits on donations to candidates. “It gives power to the outside groups in a much bigger way.”
Does it bother him that the outfit that attacked him did not have to reveal its backers?
“People can express their free speech — that’s the way our process is set up,” Renfroe said. “And I don’t see where you’re going to change the system anytime soon.”
Information for this article was contributed by Alice Crites of The Washington Post.