Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
April 20, 2014

Posts by Eliza Newlin Carney

33 Posts

April 5, 2014

SCOTUS Spawns Search for Son of ‘Super PAC’

The chattering classes (no insult intended) are scrambling to come up with a snappy moniker for the joint fundraising committees that may emerge as political power centers in the wake of the Supreme Court’s recent McCutcheon v. Federal Election Commission ruling.

First, the Huffington Post’s Paul Blumenthal alerted readers that the McCutcheon ruling, which struck the aggregate campaign contribution limit, would force them to learn all about these until-now obscure joint committees. The headline said it all: “Figured Out Dark Money Groups, Super PACs? Thanks to the Supreme Court, You’ll Have to Learn About This, Too.”

Next, The Washington Post’s Matea Gold challenged readers of “The Fix” blog to come up with “some pithy names” to describe joint fundraising committees, as well as the turgidly-named “outside groups” that play such a big role in campaigns these days. Gold launched the contest on Twitter, and will announce the winners next week.

So what are joint fundraising committees, and what should they be called? Election lawyer Robert Kelner, who chairs Covington & Burling’s election law and political practice group, has already got his answer: “super joint fundraising committees” or “super JFCs” for short. In a statement on the day of the ruling, Kelner predicted: “We expect to see the emergence of so-called super joint fundraising committees (JFCs) involving many candidates to which a donor could write a single very large check.” Full story

April 2, 2014

Will McCutcheon Ruling Boost Political Parties?

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Priebus voiced his excitement on the ruling Wednesday. (Bill Clark/CQ Roll Call File Photo)

Republican National Committee Chairman Reince Priebus could hardly contain his glee during a conference call with reporters shortly after the Supreme Court ruled to strike the aggregate limit on campaign contributions.

“We are excited about the outcome of this case,” exulted Priebus, noting that the RNC bankrolled the constitutional challenge brought by businessman Shaun McCutcheon from beginning to end. In McCutcheon v. FEC, the court ruled 5-4 to overturn the overall limit on what an individual may donate collectively to parties, candidates and PACs in one election cycle, which was capped at $123,200 total.

The ruling “allows us to go to our donors and say: Look instead of being able to give to only nine Senate candidates, you can now give to the 14 that are most in play,” Priebus told reporters. “And you can give to the Senate committee, the congressional committee and the RNC, and you can max out to all three.”

Priebus wasn’t the only party official rejoicing in the wake of the high court’s Wednesday ruling. One Democratic campaign committee operative confided that he was “happy as a pig in shit.” While advocates of campaign finance limits on and off Capitol Hill assailed the ruling as an invitation to corruption and campaign finance abuses, party officials welcomed the decision. Full story

Supreme Court Rejects Aggregate Contribution Limits

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Campaign finance reform advocate Fred Wertheimer speaks at the Supreme Court after McCutcheon v. Federal Election Commission arguments last year. (Bill Clark/CQ Roll Call)

Updated, 11:45 a.m. | In a long-awaited ruling in the case known as McCutcheon v. Federal Election Commission, the Supreme Court today struck the aggregate limit on campaign contributions as an unconstitutional infringement on free speech.

Significantly, the high court left in place the base limit on how much individuals and political action committees may give to candidates and political parties. But today’s ruling makes a challenge to that direct contribution limit, which stands at $2,600 per election for an individual, all but inevitable in the near future.

What the court overturned today was the overall limit on the amount that one individual may give to candidates, parties and PACs in a two-year election cycle, a cap that now stands at $123,000. Republican businessman Shaun McCutcheon had challenged the aggregate limit on the grounds that giving the same amount to a larger number of candidates would not invite corruption. Full story

April 1, 2014

Christie’s Contractors: Backers Barred From Donating Found Loophole

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(Bill Clark/CQ Roll Call File Photo)

New Jersey Gov. Chris Christie may manage to put the George Washington Bridge scandal behind him, but even if he does, his ethics troubles won’t be over.

Christie’s complicated relationship with campaign contributors and state contractors, in particular, will draw scrutiny as he continues to mull a 2016 presidential bid. Christie’s donors have a history of gravitating to secretive and little-regulated political groups to promote the GOP governor and his agenda.

These include tax-exempt organizations that spent millions on Christie’s gubernatorial election and re-election campaigns, and that operate outside the disclosure rules. Political activity by nonprofits has become commonplace these days, and Christie’s opponents run their own non-disclosing tax exempt groups.

But Christie’s big backers, who have bankrolled several pro-Christie operations, stand out because many of them are state contractors otherwise barred from contributing to his campaign. New Jersey “pay-to-play” laws, considered the strictest in the nation, bar large state contractors, utilities and financial services firms that manage state pension funds from donating to state candidates.

Yet a long list of New Jersey contractors and pension fund managers have given generously to groups that either back or are closely linked with Christie. Such contributions have repeatedly raised questions as to whether Christie supporters are skirting the state’s pay-to-play laws — a suggestion that the state Treasury Department, which enforces those statutes, has rejected.

Full story

March 25, 2014

Democrats’ Anti-Koch Attacks Have a Familiar Ring

There is an oddly familiar ring to Democrats’ escalating attacks on the conservative billionaire Koch brothers.

In 2010, then-White House adviser David Axelrod decried the undisclosed, unrestricted money bankrolling outside conservative groups as “a threat to our democracy.” This year, Senate Majority Leader Harry Reid has been blasting the Kochs as “un-American” and accusing them of “trying to buy America.”

The comparison bodes poorly for Democrats now dumping millions into their campaign to demonize the Kochs in what appears to be a central piece of their midterm elections strategy. In 2010, unrestricted conservative outside groups funded by industrialists Charles and David Koch helped knock House Democrats out of power in a historic GOP upset. This time around, the Koch-funded Americans for Prosperity has already spent some $27 million attacking Democrats, focusing squarely on the party’s most vulnerable Senate incumbents.

But it’s unclear how much Democrats have learned from the last midterms. Yes, Democrats have established their own network of unrestricted super PACs, casting off any pretense of taking the political-money high road. This election’s top-spending super PAC so far is the pro-Democrat Senate Majority PAC, according to the Center for Responsive Politics, and liberal super PACs have spent almost double that of their conservative counterparts.

The anti-Koch attacks are now the subject of a $3 million Senate Majority PAC ad campaign — essentially a retread of liberal assaults on big money in 2010. In those elections, the first to follow the Supreme Court’s ruling in early 2010 to lift all limits on independent political spending, Democratic National Committee spokesman Brad Woodhouse bemoaned the “growing and pernicious effects of secret, special interest money being used to determine the outcome of our elections.”

This time, the Democrats’ attacks on big money are being leveled more personally at the Kochs and their Koch Industries Inc. conglomerate. The Democratic Senatorial Campaign Committee portrays Republicans as “addicted to Koch.” A Web ad by American Bridge 21st Century, the Democratic super PAC and tracking organization, calls the Koch agenda “bad for the middle class.”

Officials for Koch Industries have criticized the attacks as an intimidation campaign designed to deflect attention from Democrats’ own agenda. Organizers for Americans for Prosperity, a social welfare group that operates outside the disclosure rules, maintain that their objective is to repeal the Affordable Care Act.

But the group’s ads hammer on vulnerable Democrats in states such as Arkansas, Louisiana and North Carolina, and they are expanding into campaign-style organizing, door-knocking and voter mobilization. Some speculate that the anti-Koch attacks leveled by Reid and his allies are a distress signal to liberal donors.

Democrats say their complaints against the Kochs are rooted in their policy differences with Republicans. The anti-Koch campaign hammers on populist themes such as economic equity and entitlements for seniors, and portrays Republicans as the party of moneyed interests.

As American Bridge spokeswoman Gwen Rocco put it: “The real reason the Kochs have already spent tens of millions on attacks this cycle is to undermine voters’ confidence in government and drive their conservative agenda that enriches the wealthiest Americans at the expense of the middle and working class.”

In Arkansas, where GOP Rep. Tom Cotton is challenging incumbent Democratic Sen. Mark Pryor, Pryor campaign officials estimate that Americans for Prosperity has spent $2.2 million on ads opposing the senator. Total outside spending against Pryor tops $5 million. Pryor accuses Cotton of being in the pocket of wealthy interests and argues that the representative’s votes against the farm bill and the Violence Against Women Act, for example, put him and the conservative groups that back him out of step with Arkansas voters.

“Obviously the outside money from these Republican groups is going to be large, and it’s likely that we will be outspent on TV,” Arkansas Democratic Party spokesman Patrick Burgwinkle said. “But what’s important for us is getting the message across that Congressman Cotton and these outside groups are just too reckless for Arkansas.”

In North Carolina, Democratic Sen. Kay Hagan has launched a digital media campaign showing her GOP opponent, state House Speaker Thom Tillis, as aligned with the Kochs’ “bad-for-the-middle-class” policies. Americans for Prosperity has spent $8.3 million on ads opposing Hagan, according to numbers released by Hagan’s campaign.

Republicans dismiss the anti-Koch attacks as a sign of Democratic desperation. In 2010, voters largely ignored Democrats’ assaults on secret, unrestricted campaign money and delivered the House to Republicans in a 68-seat sweep. Democrats’ recent anti-Koch assaults are more rooted in substantive differences with Republicans on issues such as Medicare and the minimum wage. Still, it remains to be seen whether their campaign against moneyed interests will resonate any better with voters in the 2014 midterm elections than it did four years ago.

Steeped in Overhead: A Look at the Expenses of Tea Party Groups

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Chocola runs the Club for Growth. (Tom Williams/CQ Roll Call File Photo)

Updated, 5:20 p.m. | Republican leaders are stepping up their campaign to discredit tea party activists who are challenging them on Capitol Hill and on the campaign trail, accusing conservatives of lining their own pockets at the expense of the GOP.

A recent radio ad for Senate Minority Leader Mitch McConnell, R-Ky. — who is under attack from the right in his own primary — blasts the Senate Conservatives Fund for spending its money “on a luxury townhouse with a wine cellar and hot tub in Washington, D.C.” House Republicans joke privately about the “conservative-industrial complex.” Even Ann Coulter has warned of “con men and scamsters” infiltrating the tea party movement.

Such claims hold more water for some groups than others in a movement with no clear leader. The tea party, loosely defined, is scattered among more than a dozen multimillion-dollar organizations, from the Club for Growth to FreedomWorks, to the Tea Party Express and the conservative startup Madison Fund, all with different bottom lines and spending patterns.

Some of the groups that have come in for the most criticism, such as the Senate Conservatives Fund — which calls the McConnell radio ad inaccurate — actually do spend most of their money on candidates. Others, such as the Tea Party Patriots Citizens Fund, have spent exactly zero in this election cycle on candidates, even as they raise millions from low-dollar donors.

Whatever their overhead, tea-party-aligned groups are spending tens of millions collectively, sometimes with little or no board oversight. Such groups tend to operate multiple fundraising entities, simultaneously pulling in checks for a 501(c)(3) charity, a 501(c)(4) advocacy group, a conventional political action committee subject to contribution limits and an unrestricted super PAC. Public records filed with the IRS and the Federal Election Commission revealed some unusual expenditures.

Full story

February 27, 2014

Facing 140,000 Comments, Treasury Braces for IRS Hearing, Legal Fight

As Treasury officials wade through more than 140,000 public comments on draft IRS rules to redefine permissible political activity by tax-exempt groups, they must now brace for at least one public hearing and a possible legal challenge.

Released last year in response to the scandal triggered by the agency’s overzealous scrutiny of conservative organizations and other advocacy groups, the proposed regulations were assailed on both sides of the aisle as sloppily written and over-broad.

Comments poured into Treasury steadily through the final hours of a Thursday deadline from activists on the left and right, tax and legal experts, academics, advocacy and trade groups of all stripes, and from thousands of ordinary citizens and taxpayers.

Some urged the IRS to police what Democrats call abuses of the tax and campaign finance laws by politically active nonprofits that operate outside the disclosure rules. But most were overwhelmingly critical, attacking the IRS for proposing to define political activity to include voter registration and mobilization, distribution of voter guides and candidate appearances.

“The IRS’s proposed rules would stifle political activity by preventing 501(c)(4) groups from engaging in political speech and voter registration that these groups have engaged in for decades,” wrote Sen. Ted Cruz, R-Texas, one of several members of Congress to weigh in. “Given the IRS’ recent targeting of conservative groups based on their political activity, these rules would only further politicize an already troubled agency.”

By contrast, more than a dozen Senate Democrats, led by Rhode Island’s Sheldon Whitehouse, urged the IRS to “make clear that it is impermissible for political operatives to create what are for all practical purposes PACs, obtain 501(c)(4) status for those PACs, and then spend essentially unlimited money to influence elections without disclosing their donors, as is now common practice.”

Rep. Chris Van Hollen, D-Md., a leading advocate of campaign finance disclosure, also joined with the watchdog groups Democracy 21 and the Campaign Legal Center in comments urging the IRS to rewrite its rules. The groups’ organizers have long argued that IRS regulations contradict tax laws that require 50(c)(4) organizations to operate “exclusively” for the social welfare.

But many progressive watchdog groups, while commending the agency for tackling existing rules that are widely regarded as subjective and confusing, said the proposed regulations are badly flawed.

A broad coalition of progressives, including civil liberties and environmental organizers, have joined conservative activists in assailing the proposed IRS rules as over-broad and chilling to free speech. Left-leaning activists have in essence told the Treasury Department “thanks, but no thanks” for the IRS rules.

“We would not be happy if the rules as they were initially drafted were finalized,” said Lisa Gilbert, director of Public Citizen’s Congress Watch and manager of the Bright Lines Project. The project has brought together a team of experts to examine how the IRS may clarify its hazy rules regarding what tax-exempt groups may do politically. Gilbert said the project is “happy that the IRS is tackling this problem” but has urged its allies to voice concerns to Treasury.

The Democratic senators’ comments do caution the IRS not to reach too broadly. The proposed rules are “a step in the right direction,” state the comments, whose authors include Sens. Richard Blumenthal of Connecticut and New York’s Charles E. Schumer. “However, it is important that nonpartisan activities with social welfare benefits, such as voter registration and get-out-the-vote drives, are excluded from the definition of candidate-related political activity.”

Newly installed IRS Commissioner John Koskinen has told members of Congress that the agency will review all public comments with care, and the draft regulations themselves state that the agency will hold a public hearing on request. Koskinen acknowledged at a recent House Appropriations subcommittee hearing that the chances that the rules would be finalized by this fall’s midterm elections are “fairly slim.”

Actually, the rules are broadly regarded as dead on arrival, given the innate challenges of distinguishing legitimate advocacy from overt political activity, and the ongoing uproar over IRS actions in this arena. Several congressional committees continue to investigate the agency’s mishandling of activist groups’ applications for tax exemption, and the House Oversight and Government Reform panel has called former IRS official Lois Lerner to testify again next week.

When Lerner first testified before the committee in May, she denied culpability then immediately invoked her Fifth Amendment right to remain silent to avoid self-incrimination. Her attorney has told the panel that she would do so again. But Republicans on the panel are threatening to hold her in contempt of Congress.

Republicans on and off Capitol Hill have renewed their assaults on the agency. The House approved legislation on Wednesday that would bar the IRS for one year from proceeding with its regulations. The Democrat-controlled Senate is not expected to take up that bill, and the Obama administration has threatened to veto it.

But conservative activists are pushing to keep the issue in the spotlight. FreedomWorks announced that it will mobilize its members for a Senate vote on the bill. Conservative activists have promised to sue the administration if it proceeds with the draft IRS regulations as written.

“I think the IRS would have a difficult time [arguing] for these to withstand legal scrutiny,” said Cleta Mitchell, a GOP election lawyer at Foley & Lardner.

February 26, 2014

IRS Uproar Intensifies

As thousands of negative comments flood the Internal Revenue Service on the eve of a Feb. 27 deadline, GOP leaders are moving on several fronts to block the proposed IRS regulations that would curb political activity by tax-exempt groups.

The House has passed legislation that would bar the IRS from issuing new regulations for one year. Also, the House Oversight and Government Reform Committee has released a letter demanding further testimony from Lois Lerner, the ex-senior IRS official at the heart of an ongoing scandal over the agency’s self-admitted targeting of the Tea Party and other groups seeking tax exemption. Full story

February 18, 2014

Firewall Between Candidates and Super PACs Breaking Down | Rules of the Game

When the Supreme Court deregulated independent political spending four years ago, the court reasoned that unrestricted money posed no corruption risk because a firewall separates candidates from their outside benefactors.

As Justice Anthony M. Kennedy wrote for the majority in Citizens United v. Federal Election Commission: “By definition, an independent expenditure is political speech presented to the electorate that is not in coordination with a candidate.” Such expenditures, the court concluded, “including those made by corporations, do not give rise to corruption or the appearance of corruption.”

Four years after that ruling, the supposed barrier between candidates and unrestricted super PACs is flimsier than ever. As midterm elections approach, complaints are rolling into the FEC from both parties about super PACs that share vendors, fundraisers and video footage with the politicians they support.

Not that anyone expects much response from the FEC. The agency has been fighting in court for years to defend its definition of illegal coordination, which watchdogs allege is too narrow and contradicts campaign finance law. Indeed, FEC rules explicitly permit quite an array of candidate-super-PAC interactions.

Politicians may raise money for super PACs and even appear at their events, for example, as long as they never ask for checks larger than the amounts donors may write directly to their campaigns — $5,000 for a political action committee and $2,600 for an individual per election.

Super PACs launched by the close advisers and top aides of the candidates they end up backing do not necessarily run afoul of the law. Nor does the candidate’s sharing of consultants, fundraisers or media buyers with the PAC.

Even under these anything-goes rules, however, politicians and their backers are inviting fresh coordination allegations. Last month the Arizona Republican Party complained to the FEC that an ad paid for by House Majority PAC violated coordination rules because the Democratic super PAC had captured and broadcast video footage first posted by Rep. Ann Kirkpatrick, D-Ariz.

The state GOP accused Democrats of “stepping over the legal line to try to sway voters” for Kirkpatrick. A House Majority PAC spokesman called the complaint “absolutely, 100 percent without merit” and noted that the FEC closed the books without action on two previous complaints that ran along the same lines.

Several other Democrats have posted conveniently placed video footage on their websites, including House member and Senate candidate Bruce Braley of Iowa and Sens. Kay Hagan of North Carolina and Mark Begich of Alaska. Last year, several House Democrats sang the praises of House Majority PAC in a video testimonial aimed at donors.

Sen. Mark Pryor, D-Ark., recently created a website that features scripted attacks on his GOP challenger, Rep. Tom Cotton, some of which resurfaced close to verbatim in an anti-Cotton ad run by the Democrat-friendly outside group Patriot Majority USA.

In the meantime, Democrats in Michigan have called on the FEC to investigate GOP Senate candidate Terri Lynn Land’s apparent acknowledgment that her campaign had communicated with super PACs. Land reportedly said at a public forum that her campaign “had talked to a lot of those folks. They’re committed to Michigan.” A Land aide has denied any coordination.

Sharing video footage between candidates and super PACs may not violate the FEC’s coordination rules, said Paul Ryan, senior counsel at the Campaign Legal Center, but it runs afoul of another FEC law — one that treats dissemination of campaign materials as an in-kind political contribution. Such contributions are illegal for super PACs, Ryan noted.

“I think that political players are likely emboldened by the lack of enforcement action by the FEC in recent years,” said Ryan. The super PAC American Crossroads explicitly asked the FEC in 2011 for permission to work directly with candidates to produce issue ads, but the agency deadlocked and took no action.

The Campaign Legal Center has yet to hear back from the FEC following its complaint in 2012 that the super PAC backing Mitt Romney illegally coordinated with the GOP nominee when it rebroadcast an entire ad produced by the Romney campaign in 2007, during his previous presidential run.

The challenge for those lodging coordination complaints, said former Republican FEC Chairman Bradley Smith, is that they are tough to prove unless super PAC organizers and candidates engage in direct or face-to-face communications — the kind that could facilitate quid pro quo corruption. Telling super PACs they can’t pick up b-roll footage from candidate websites is both questionable and futile, he argued.

“I just don’t see how you are going to realistically tell people that you can’t use material that’s out there that everybody knows about,” said Smith, currently the chairman of the pro-deregulation Center for Competitive Politics. “It creates inherent line-drawing problems.”

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

February 4, 2014

Sarbanes Bill Aims to Draw in Small Donors

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(Tom Williams/CQ Roll Call File Photo)

Having road-tested a low-dollar fundraising system in his own congressional campaign, Maryland Democrat John Sarbanes wants the entire House to follow suit.

Sarbanes rolls out legislation Wednesday aimed at spurring House candidates to raise money from small donors instead of from the traditional large contributors on Wall Street and K Street. Dubbed the Government By The People Act, the bill would give small donors a $25 refundable tax credit, and match contributions of $150 or less at a rate of six to one, among other provisions.

“We need something that is about empowering the good actors, which are everyday people, and bringing them back to the town square,” said Sarbanes, whose legislation enjoys the backing of House Minority Leader Nancy Pelosi, D-Calif., and of more than two dozen environmental, labor and other progressive groups. Full story

January 28, 2014

Will McCutcheon Replay Citizens United? | Rules of the Game

Four years after the Supreme Court deregulated independent campaign spending in Citizens United v. Federal Election Commission, the high court is poised to yet again turn American elections upside down.

The court is expected to rule any day now on McCutcheon v. FEC, another potentially landmark constitutional challenge that could shake up campaign financing as dramatically as Citizens United did in 2010. While no one can predict how the court will rule, oral arguments in October suggest that conservatives in the majority remain as eager as ever to dismantle money limits.

At issue in McCutcheon is the constitutionality of existing overall limits on how much a contributor may give to candidates and political parties in a single election cycle. Alabama businessman Shaun McCutcheon, who brought the challenge, argues that the $123,200 cap on total contributions per cycle violates his First Amendment rights.

The limit’s defenders say that tossing it out will bring back the “soft money” days when donors freely wrote large, unrestricted checks to the political parties. That soft money, banned by the 2002 law known as McCain-Feingold, was raised by the elected officials who ran the parties — and wrote the bills that the big donors lobbied for and against. It was an invitation to abuse, a parade of lawmakers and donors told the court when it took up McConnell v. FEC, the constitutional challenge that upheld the soft money ban in 2003.

But the Supreme Court has partially changed hands since then, and today’s right-leaning justices appear to have forgotten that unrestricted, multimillion-dollar contributions to the political parties ever drew fire. In Citizens United, the high court concluded that unlimited campaign spending by unions and corporations (including incorporated nonprofits) can’t corrupt anybody when the spending is independent — not coordinated with candidates or parties.

Now some on the court argue that big money should be legal for political parties as well. As Justice Antonin Scalia told Solicitor General Donald B. Verrilli Jr., during the McCutcheon oral arguments: “It seems to me fanciful to think that the sense of gratitude that an individual Senator or Congressman is going to feel because of a substantial contribution to the Republican National Committee or Democratic National Committee is any greater than the sense of gratitude that that Senator or Congressman will feel to a PAC which is spending enormous amounts of money in his district or in his state for his election.”

Never mind that this argument undercuts the court’s own conclusion in Citizens United: that independent spending poses no corruption risk because politicians are not involved. A ruling in McCutcheon’s favor might well free up elected officials to collect unrestricted soft money for the political parties once again. That’s because without the aggregate limits, politicians in charge of joint fundraising committees could ask donors to write checks of as much as $2.5 million or more at a pop, advocates of campaign restrictions argue.

A ruling for McCutcheon would also weaken the “base” contribution limit, a cornerstone of the remaining campaign finance rules. That limit bars an individual, for example, from giving a candidate more than $2,600 per election. Historically, the court has held that limits on contributions are less of a First Amendment burden than restrictions on spending. The McCutcheon challenge argues, in part, that contribution and spending limits should be treated as equally onerous. If the court agrees, a successful challenge to the base limits could be next.

“This case not only threatens to have a broad impact on laws limiting aggregate contributions, but could also, depending on the scope of the ruling, jeopardize even the longstanding ‘base’ limits on contributions to candidates and political parties at every level of government — municipal, state and federal,” warns a background memo circulated by the Campaign Legal Center.

The center is one of several watchdog groups bracing for a McCutcheon ruling that may well deal another blow to campaign finance restrictions. Public Citizen has also released a two-part “prebuttal” to the pending McCutcheon ruling titled: “Beware of a Naïve Perspective.”

When Justice Anthony M. Kennedy wrote the majority opinion in Citizens United four years ago, he asserted blithely that the Internet age would ensure enough “prompt disclosure” to hold corporations and politicians accountable. Nonprofits exempt from the disclosure rules, such as social welfare and trade groups, went on to spend more than $300 million on the 2012 elections, all without disclosing a single donor.

The question now is whether the high court, having freed outside groups to spend record sums of unrestricted soft money in campaigns, will also extend that invitation to political parties — and the politicians who run them.

January 16, 2014

‘Dark’ Corporate Money Bankrolled Tax-Exempt Groups, Report Says

The nation’s top corporations gave more than $185 million in 2012 to tax-exempt groups that spent heavily on politics and lobbying, according to a report released today by the Center for Public Integrity.

The report discloses for the first time the extent to which blue chip companies such as Exelon, Microsoft and WellPoint bankroll the activities of leading trade associations, advocacy groups and think tanks. An investigative journalism nonprofit, the center pored over voluntary disclosures filed by the companies that Fortune magazine ranks as the nation’s top 300.

The seven-month investigation covering the 2012 calendar year identified 1,000 politically active nonprofits underwritten by the corporate expenditures. More than two dozen such groups collected at least $1 million each from corporate givers, the report found. Since tax-exempt groups need not disclose their donors, watchdogs have dubbed their political spending “dark money.” Full story

January 14, 2014

Super PAC Boom Marginalizes Women, Report Says

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Stephanie Schriock, president of Democratic women’s PAC EMILY’s List, at the National Press Club. (Bill Clark/CQ Roll Call)

The proliferation of super PACs and other unrestricted outside groups is further marginalizing women campaign donors, who are already vastly outnumbered by men, according to a report released Tuesday.

Women make up only about 30 percent of political donors overall, a figure that has remained largely unchanged over the last decade, but they gave even less — just under 20 percent — of the money that went to outside groups in the 2012 elections, according to the report, titled “Money in Politics with a Gender Lens.”

“Amongst both general donors and ‘mega donors,’ to super PACs, women continue to be underrepresented and outnumbered by men,” said Kelly Dittmar, an assistant research professor at the Center for American Women and Politics at Rutgers University, which co-authored the report with the Center for Responsive Politics. “As super PACs increase in influence, we find that to be significant.” Full story

December 30, 2013

FEC Vulnerable to Hacking, IG Warns

Deficient computer security at the Federal Election Commission has already led to high-level breaches and puts the agency “at high risk” of continued hacking, according to a federal Inspector General report released this month.

FEC information systems, which in the previous election tracked more than $6 billion in political spending, “have serious internal control vulnerabilities and have been penetrated at the highest levels of the agency,” according to the FEC Inspector General’s final audit for fiscal 2013.

The report, which reiterates security concerns flagged by federal auditors for several years running, identifies two specific, high-level hacking incidents. In May of last year, an adversary identified as an “Advanced Persistent Threat” compromised a commissioner’s personal user account, as well as several FEC systems, for eight months running. Full story

December 18, 2013

The Year in Political Money: Less Transparency, More Deregulation | Rules of the Game

Campaign spending trends were not as sensational this year as in 2012, when super PACs and other outside groups pumped more than $1 billion into politics, three times what they spent in the previous presidential election cycle.

Still, 2013 marked several important political money milestones that signal where campaigns are headed next. Perhaps invariably, elections continue to march toward less transparency and more deregulation, and lawmakers and federal agencies remain too paralyzed by discord to respond.

It was a bad year for disclosure, both on the legislative and regulatory fronts. Congressional Democrats lost no time reintroducing the transparency bill known as the DISCLOSE Act, which had come close to passing in the previous Congress. But the bill was quickly overwhelmed on Capitol Hill by politically charged disputes over immigration, health care and the federal budget.

Advocates of campaign finance limits managed to generate more than 600,000 public comments urging the Securities and Exchange Commission to require corporations to more fully report their political spending. Both the SEC plan and the DISCLOSE Act had set out to shed light on unreported political spending in the wake of the Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling, which deregulated independent campaign spending, including by social welfare and trade groups exempt from disclosure rules.

But the SEC backed away from its public disclosure agenda, omitting from its to-do list for 2014 any mention of a corporate disclosure rule that the agency had once flagged as a priority for this year.

Disclosure fared somewhat better in the states, where legislators and election officials in California, New York and elsewhere moved to pull back the curtain on politically active tax-exempt groups, which as a whole spent more than $300 million in the previous election. California’s Fair Political Practices Commission slapped a record $1 million fine on two Arizona nonprofits with ties to the billionaire conservative donors Charles and David Koch for failing to disclose the donors behind a multimillion-dollar ballot initiative campaign.

At the same time, more than a half-dozen states where unrestricted super PACs have flourished moved to relax limits on contribution to candidates, in part to put them on a more level playing field with outside groups.  Advocates of easing the campaign finance rules also continued their push for federal deregulation, mounting a constitutional challenge to the overall limit on what one individual may give to political parties and candidates in a single election cycle.

Known as McCutcheon v. FEC, the challenge received a receptive audience at the Supreme Court during oral arguments in October. The court’s conservative justices, who continue to hold the majority, cast the aggregate limit as a burden on donors, and some argued that political parties should not face stricter limits than outside groups. If the high court rules that aggregate contribution limits are unconstitutional, watchdogs warn that it would weaken the current ban on unrestricted “soft” money donations to the political parties, and set the stage for yet another challenge to the limits on contributions made directly to candidates.

Politically active nonprofits dominated the headlines in 2013, both because of the scandal over the Internal Revenue Service’s targeting of tea-party-affiliated groups, and because tax documents filed in November shed long-overdue light on how such groups moved money around last year. Three congressional committees launched IRS investigations this year, which are still ongoing, and several top tax agency officials were ousted or left under pressure.

The agency responded with draft rules aimed at more consistently regulating political activity by tax-exempt groups, but these just dragged the IRS further into controversy. Advocacy groups on both the left and right argue that the IRS restrictions will squelch constitutionally protected voter mobilization and pre-election issue advertising campaigns. Democrats say the rules are long overdue and should probably go further.

The FEC, in the meantime, had another roller-coaster year. In April the agency, down one commissioner, earned a dubious distinction: All five of its remaining commissioners were serving expired terms. The Senate confirmed two new commissioners this fall, a Democrat and a Republican, who came in with pledges to work together and issue long-overdue FEC regulations for the post-Citizens United campaign world. But so far there’s no sign that FEC deadlocks or backlogs have disappeared.

It all sets the stage for yet another round of highly contentious campaign finance fights in 2014, which is already shaping up as a high-stakes midterm that will feature plenty of undisclosed, unrestricted money. If 2013 is any indication, the next wave of big money will draw plenty of headlines but little regulatory response.

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