Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
November 24, 2014

New FCC Disclosures Reveal Underground Election | Rules of the Game

A trove of new public records recently opened up by the Federal Communications Commission sheds light on the ways undisclosed political ads are creating an underground midterm election that’s increasingly hidden from view.

It’s already well known that unreported political spending is rising, thanks in part to Supreme Court rulings that have nullified campaign finance limits on several fronts. As of April 30, undisclosed political spending was three times higher than at the same point in 2012, according to the Center for Responsive Politics.

But new FCC records, which on July 1 vastly expanded the number of TV stations that must post their political ad files online, offer concrete metrics to document what the Sunlight Foundation’s Kathy Kiely calls the nation’s “gross political product.”

“It really has demonstrated how incessant the advertising is, and how much ‘off-the-radar’ political advertising has been spent,” said Kiely, Sunlight’s managing editor.

The Sunlight Foundation played a lead role in urging the FCC to require full online disclosure of political ad buys. Long required on paper, the political ad files were first made available online in 2012 by the four major broadcast affiliates in the nation’s top 50 markets, about 230 stations. Now 2,000 stations are filing disclosures online, virtually a tenfold increase.

With the help of a new tracking tool, researchers at Sunlight and other investigative outfits have started poring over the disclosures. These show for the first time just how much political air time is being bought by organizations that don’t report their activities to the Federal Election Commission — typically tax-exempt social welfare and trade groups that need not reveal their donors.

Among Sunlight’s findings: In the North Carolina Senate contest between incumbent Democrat Kay Hagan and her GOP challenger Thom Tillis, 65 percent of the ads supporting Tillis or attacking Hagan were not reported to the FEC. That’s because the ads, aired on WBTV Channel 3 in the state’s most costly media market, consisted of “issue” messages that didn’t directly advocate for a candidate’s election or defeat.

“Here is one station in one race,” said Kiely. “And if that is indicative, it’s telling us that almost all the early money spent so far is outside money, and that the FEC — the agency set up to create campaign accountability after Watergate — is not seeing half the money that is going into the political system.”

It’s a measure of the trend toward underground political spending that the Crossroads operation launched by GOP strategist Karl Rove is heavily lopsided in this cycle toward its non-disclosing tax-exempt arm. The group’s American Crossroads super PAC and its social welfare arm, known as Crossroads GPS, have together spent and reserved air time for about $23 million worth of political ads over the summer and into the fall, according to news reports and to sources familiar with the organization.

But less than a third of that — $6.5 million — is being spent by American Crossroads, which reports its activities to the FEC. The majority, some $17.3 million, is being spent by Crossroads GPS, which is exempt from disclosure rules.

It’s all legal, because Crossroads GPS and other politically active tax-exempt groups are airing “issue” messages that ostensibly constitute advocacy, not election activity. But such ads can be awfully hard to tell from campaign ads.

One North Carolina spot by Concerned Veterans for America, a social welfare group heavily funded by the billionaire industrialists Charles and David Koch, spotlighted the scandal involving health care delays at the Department of Veterans Affairs. (Hagan has said she supports a bill to address the delays.)

The ad featured an ominous soundtrack, unflattering black-and-white images of Hagan and of President Barack Obama, and a voice-over intoning that Obama “won’t hold the VA accountable,” and that Hagan “can, but she’s done nothing, putting her loyalty to her party and the president ahead of America’s veterans.”

Advocates of the First Amendment argue that such ads are a form of constitutionally protected public education, and the donors behind them have a right to remain anonymous. Outspoken Republicans on Capitol Hill opposed the FCC’s move toward greater disclosure and regard the push for transparency as a move to silence political adversaries and tread on free speech.

But Kiely says the disclosures offer valuable information about the increasingly obscure world of election spending: “I think we know a little bit more about what we didn’t know. There are still too many obstacles between voters and the information they need to make informed decisions at the polls. But this is progress.”

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

  • Snertly

    Has anyone done a better show and tell on the sham and scam of political action committees than The Cobert Report? Seemingly, one set of rules with no purpose but to evade a different set of rules. The lasting effect of such hijinks is to undermine the nation’s faith in its political system.

  • karlleuba

    Maybe we need to label political speech that mentions a Candidate name as what it is, campaign spending (speech) and require the names of the people paying for it. Instead of playing loophole games with the organizations paying for “issue” ads, just make the gossip mongers tell us who they are.
    Oh, I forgot, the organizations are corporations. So we do know, we just don’t know who the non corporate people behind the are.

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