Andrea Fuller stories from The Center for Public Integrity

'Upset' emissions: Flares in the air, worry on the ground

Exxon Mobil Corporation — 2013-05-21T12:56:19-04:00

BATON ROUGE, La. — Shirley Bowman noticed the smell after 8 a.m. on June 14, 2012, her 61st birthday. In Baton Rouge, where the petrochemical industry dominates the landscape, foul odors resembling burnt rubber or propane are perennial. But this odor, caustic and potent, seemed especially foul — “like some sort of chemical,” she recalls.

Bowman found her daughter crying over a migraine. Her neighbors experienced headaches, dizziness, nausea. One family reported a toddler son coughing up phlegm; another, an elderly father collapsing on the floor. She soon suspected the cause: A leak of “steam-cracked” naphtha, a liquid mixture of volatile petrochemicals, occurring at the ExxonMobil Baton Rouge petrochemical complex a half mile away.

Four hours earlier, Exxon operators detected an odor in the East area tank field, and discovered a “bleeder” valve on Tank 801 dripping naphtha into a sewer. The leaky valve dumped 411 barrels into the underground system, company records filed with the state show. The liquid traveled a mile before pouring into a separator pit, vaporizing along the way, and releasing tens of thousands of pounds of benzene and other toxic chemicals into the air.

What happened that day in Baton Rouge is one thread of a larger story about the often toxic, sometimes hidden releases emanating from oil refineries, chemical plants and other industrial facilities along the chemical corridor of Louisiana and Texas. Those unplanned emissions — known in regulatory parlance as “upsets” — are occurring more often than industry admits or government knows, according to more than 50 interviews with regulators, activists, plant representatives, workers and residents, and an analysis of tens of thousands of records by the Center for Public Integrity.

For many communities, these upsets have evolved into an invisible menace: They disrupt lives, yet offenders are rarely punished. In Texas, where activists have clamored for relief, state officials say enforcement efforts helped reduce incidents by 6 percent in the most recent year of reporting; Louisiana officials cite a 41 percent decrease since 2008.

Yet those numbers tell only part of the story. The mass of pollution emitted in Texas, the nation’s refinery hub, hit a five-year peak in 2011, the Center found — so even as the number of reported events dipped, the amount of pollution increased. And, experts say upset releases are consistently underreported. For communities straddling industry fence lines, worry and fear remain in the air.

This hidden pollution can produce harm. Over the last five years, records show, upset events have yielded almost four million pounds of toxic air pollutants in Texas alone — the 189 chemicals deemed so harmful to health Congress sought to bring emissions under control two decades ago. That’s two percent of all upset emissions.

“These are a major public health threat,” acknowledges Larry Soward, a former commissioner at the Texas Commission on Environmental Quality, who served on its board from 2003 to 2009.

“Upsets” occur when equipment breaks down or production units are shut off, restarted and repaired; or, as regulations state, when there’s an “unavoidable” accident.

Under law, plant managers must notify officials when accidental releases exceed certain hazardous air thresholds. In Baton Rouge, Exxon did this. Yet its numbers kept escalating.

At 5:10 a.m. that day, Exxon supervisors told the state the benzene leak would likely exceed the 10 pound reportable quantity. Within hours, they classified it “level 2,” barricading areas and monitoring the air. According to a call log, company officials found benzene levels “so high” bordering a rail yard, they advised the railroad “not to let anyone go through that area.” By 12:30 p.m., the company was testing 400 workers for exposure to the cancer-causing chemical.

The following day, Exxon reported that benzene emissions totaled 1,364 pounds during the leak’s first three hours. By June 20, it increased the number to 28,688 pounds. In its final report filed 60 days later, Exxon revealed the benzene total was actually 31,022 pounds — nearly four times what the refinery released in upset events in eight years, according to company reports compiled by the nonprofit Louisiana Bucket Brigade. State regulators later deemed the leak “preventable,” issuing an enforcement order contending that Exxon “failed to provide notification of a change in the nature and rate of the discharge.”

Exxon doesn’t dispute the leak was preventable. But the company, saying it accurately reported the release, is appealing the state’s order. While plant supervisors acknowledge the “large” leak, they say it didn’t threaten residents. Tests along the fence line showed “no community impact,” their records state; air sampling by regulators back up the company.

“It was a large number. We regret that number,” says Derek Reese, Exxon Baton Rouge’s environmental manager. “But we believe we did an appropriate response to mitigate the impact.”

That’s little consolation to residents, like Bowman. “Everything seems to stop at that magical gate,” she says, motioning to Exxon’s South Gate adjoining her neighborhood. “But if you live here, you know. Chemicals are let out on you.”

Upsets plague plant, community — time and again

Last spring’s valve leak has played out again and again at the sprawling, 2,400-acre ExxonMobil Baton Rouge complex, which encompasses an oil refinery and a chemical plant, and dwarfs the Standard Heights community. The leak marks the 1,068^th upset emissions event at the compound in the last eight years, according to a database of incident reports compiled by the Bucket Brigade. Of these events, 172 involved benzene, a carcinogen that can trigger headaches, dizziness and rapid heart rate.

Exxon’s chemical plant had 265 of all incidents. At the refinery, the data show 803 accidental releases over these years; at its height, the facility averaged two a week.

ExxonMobil Baton Rouge questions the Bucket Brigade’s analysis, calling it “likely another misrepresentation of data.” In an email, the company criticizes the environmental group’s methodology and findings, contending that incident numbers published by the group don’t match the reports catalogued by the state.

The Bucket Brigade stands by its analysis, and explains that Louisiana doesn’t have a standardized system for companies to report upset events. Instead, reports are filed on a rolling basis and then posted online.

The steady hazards extend far beyond Baton Rouge. In the Gulf states of Texas and Louisiana, the vast number of plastics, power and gas plants provide an on-the-ground case study of a national problem.

“Non-routine” upset emissions have become regular occurrences at oil refineries, chemical plants and manufacturing facilities.

Data collected by the Texas Commission on Environmental Quality, TCEQ, offer a rare window into this pollution peril; the state agency requires companies to report events online within 24 hours, as well as annual totals.

From 2007-11, just over 2,400 of the largest facilities across Texas spewed almost 180 million pounds of upset emissions, contamination on top of the 14.8 billion pounds of routine air emissions in that time. Nearly half the facilities experienced at least one event in that period, pumping out sulfur dioxide and other smog-inducing pollutants. The greatest concentration came in 2011: 58.1 million pounds.

The 20 biggest offenders — oil refineries and natural-gas plants in Kermit, Beaumont, Corpus Christi and beyond — account for more than half of all such emissions in Texas.

“It’s a lot of stuff,” says Neil Carman, a former state air pollution inspector who investigated upset events.

Carman now heads the air program for the Sierra Club’s Lone Star chapter, which has filed several citizen lawsuits targeting illegal emissions. Two facilities the Club sued rank among the state’s top emitters: ExxonMobil, whose petrochemical complex in Baytown has released 5.1 million pounds of upsets in the five years; and Shell Oil, whose Deer Park plant has emitted 2.5 million.

Studies have also explored this problem, documenting how the releases sometimes occur every day or two, and for largely avoidable reasons: Equipment breakdowns and poor maintenance, for instance. One researcher, Texas A&M University’s Melissa Jarrell, says they “are happening so frequently, it’s more likely companies know about the problems and know what to do to stop upsets.”

Industry portrays the discharges as an inevitable — and overwhelmingly harmless — byproduct of manufacturing. Regulators have encouraged this casual attitude, some say.

For decades, the U.S. Environmental Protection Agency and state regulatory agencies have effectively ignored the emissions. Officials don’t count upset events in facility permits and compliance records, notes Kelly Haragan of the environmental law clinic at the University of Texas-Austin, because they “aren’t supposed to happen.” In August 2004, Haragan penned a 215-page report showing how easily facilities can get away with releasing more pollution than allowed by the federal Clean Air Act — with little to no repercussions.

At times, she says, “It’s like having a whole other plant no one is even acknowledging.”

These incidents skirt normal pollution controls, venting through flares and leaks. Plants can have scores of events a year, giving off a constant cloud of invisible spoliation.

“A big dose of toxins are coming out of these facilities,” says Soward, the former TCEQ official, who now works for Air Alliance Houston, “and into fence line communities.”

The health effects are harder to measure; little research exists on the threat to residents. But recently, Dr. Mark D’Andrea, at the University of Texas Cancer Center, began tracking 4,000 residents exposed to the poster child of all upsets — the “40-day Release” at the BP refinery, in Texas City, which belched 514,795 pounds of benzene and 20 other pollutants throughout the spring of 2010. Earlier this year, D’Andrea unveiled preliminary data showing the residents have “significantly higher” white-blood cell and platelet counts than their Houston counterparts. The data suggests BP’s release may have increased their risk of developing such cancers as leukemia, the doctor says.

In a statement, BP says it does “not believe any negative health impacts resulted from” its 40-day release. “To our knowledge, the University Cancer Centers’ pilot study does not support a claim for any plaintiff alleging injury from that flaring and has no relevance to those claims,” the company wrote, referring to pending litigation filed by 47,830 residents and workers against BP alleging health ailments caused by the release. D’Andrea has not been hired as an expert witness for either side in the case, but has testified in pre-trial discovery.

‘An Invisible Poison’

In Baytown, Texas, about 250 miles from Baton Rouge, ExxonMobil operates the nation’s largest petrochemical complex, replete with an oil refinery and two chemical plants. The mass of stacks, tanks and pipes spans 3,400 acres on Houston’s ship channel, looming over blue-collar neighborhoods nestled in its shadow. In Harris County, a manufacturer’s Mecca, Exxon’s refinery tops all 155 upset emitters, spitting out 3.8 million pounds’ worth from 2007 to 2011. Its olefins plant ranks third in the county, with 1.1 million.

Here, residents describe fiery flares that have rattled windows, belched black smoke and cast a sooty substance on the ground. At times, they’ve unleashed a thunderous boom, “like an Air Force fighter jet,” says Shae Cotter, who lived across a highway from the complex. He remembers the sound jolting him from sleep at 3 a.m. Occasionally, he videotaped flares aglow like celestial globes, flames ballooning toward his home.

Residents say smells drive them inside. Stuart Halpryn, whose house sits a quarter mile from Exxon, says he tried to adapt to the odors, along with the runny noses and allergy-like symptoms. That changed in February 2009, he says, when his family became sick after a valve leak at the refinery. His four children suffered from such severe indigestion, he says, they missed school for a week. Later, he learned from reading Exxon’s report the leak had unleashed 17,432 pounds of six different toxic chemicals.

“Nobody really understands what’s being dumped on them,” says Halpryn, who moved his family to Kentucky in June. “It’s an invisible kind of poison that’s being rained down.”

The Exxon complex ranks among the state’s biggest emitters of upset emissions involving carcinogens and noxious gases. Top chemicals include hydrochloric acid, 1,3-butadiene and benzene, toxins that can trigger skin irritations, respiratory problems, neurological disorders and gastro-intestinal diseases.

Baytown residents Cotter and Halpryn, worried over Exxon’s emissions, are witnesses in a citizen lawsuit against the company in the U.S. District Court in Houston.

The Sierra Club, along with Environment Texas, filed suit in December 2010, charging that non-routine incidents at the Baytown complex since 2005 have heaved more than eight million pounds of “unauthorized emissions.” The complaint alleges “longstanding systemic problems,” and company records revealed in court show some facility units have encountered dozens of upset events: The refinery’s Fluid Catalytic Cracker Unit 3 raked up 34 incidents from 2005 to 2011; at the olefins plant, the Cold Ends Unit has had 32.

In a statement, ExxonMobil Baytown says it has worked with regulators to “greatly” reduce emissions. “We are proud of the overall reductions we have made,” the company wrote. Since 2000, Exxon notes, it has decreased total emissions at the Baytown complex by more than 50 percent. The company declined to provide similar statistics for the facility’s upset emissions. “ExxonMobil is committed to continuously improving the environmental performance of our Baytown Complex,” the company said.

In court records, Exxon doesn’t deny the 9,374 violations alleged by plaintiffs for “unlawful upset emissions”; they’re based on its reports cataloged with the state.

In August, the company filed a motion to dismiss the suit, contending, among other issues, that environmental groups aim to “second-guess” enforcement practices by the TCEQ. On April 3, a federal magistrate denied most of Exxon’s motion, paving the way for a possible trial.

For residents, the court proceedings might not come soon enough. Since December, the Baytown facility has set off a wave of upset emissions. One, triggered by a tripped compressor in the refinery’s Booster Station Four, pumped out 114,000 pounds of sulfur dioxide in 18 hours. It was the 20^th upset recorded there by company reports.

“Exxon is emitting all of these day after day,” says Marilyn Kingman, a long-time resident. “Anybody who lives in the Baytown area is suffering.”

Infrequent monitoring, incomplete data

The threat to fence line communities may be even greater than industry self-reports — and official data — suggest. One reason is that companies rely on infrequent air monitoring to estimate chemical emissions, including upsets. When monitors do measure toxic air pollution, they can miss the short spikes characterizing upset events. “Part of the problem with upsets,” says Jarrell, of Texas A&M University, “is you’re not getting a lot of true data.”

Companies can misstate the magnitude of events through faulty calculations, environmental advocates argue. Formulas used to estimate what’s spewed from tanks and flares are so antiquated — 19 and 20 years old, respectively — they “do an extremely poor job of predicting emissions,” says Eric Schaeffer, director of the Environmental Integrity Project. Attorneys from his nonprofit are suing the EPA to force it to update these “emissions factors.” Recent studies have shown discrepancies between what’s reported and what’s emitted.

Take the 40-day release at BP’s Texas City refinery. Plant supervisors assumed one flare had destroyed nearly 98 percent of the emissions, a regulatory requirement. Three years earlier, however, regulators concluded that, in some cases, actual emissions were six times greater than what the company reported. BP maintained it has “multiple bases for concluding that the flared hydrogen stream was well combusted.”

Others aren’t so sure.

“It’s a typical example of what goes on in these situations,” says Jim Tarr, a former Texas air regulator who serves as a consulting expert in pending lawsuits against BP over its 40-day release. “Not all companies do it this way,” he says, referring to the flaring forecast, “but a lot do.”

If the calculations seem questionable, critics say, so do all those upsets that don’t count. Company reports don’t account for unpermitted releases falling beneath the thresholds for reporting requirements — up to 5,000 pounds for some pollutants. Plant supervisors must keep records detailing the events and include their emissions in annual totals, but not in incident reports. Considered “below reportable quantity,” they essentially never happened.

“That’s the bigger story on upsets,” asserts Jay DeLouche, a Lake Charles lawyer who has sued facilities over the emissions. Some managers “just determine [an upset] is below reportable quantity … and say, ‘Nothing happened, it’s a non-event.’ ”

“Non-events” can translate into big numbers. Company records revealed in court in the ExxonMobil Baytown case show thousands more “non-reportable” emissions events than the “reportable” ones filed online with TCEQ. Filling 235 pages’ worth of documentation, the 2,158 non-events outnumber the 333 reportable events by more than six to one. In Baton Rouge, Exxon’s refinery has boasted a similarly high ratio of non-events; according to the latest data compiled by the Louisiana Bucket Brigade, the company has designated 70 percent of refinery incidents “below reportable quantity” in 2011, up from roughly 10 percent in 2005.

“We believe the refineries under-report,” says the Bucket Brigade’s Anne Rolfes.

Exxon says it “is very diligent in its reporting of incidents, no matter how small.” Plant supervisors must notify authorities of events within an hour of discovery, even if the amount is unknown, the company notes; often, they must report back to regulators that “the quantity is less than initially thought.”

Over the last five years, the company says it has reduced incidents exceeding the reportable quantity at the Baton Rouge refinery by 86 percent, and at the chemical plant by 47 percent. “We take every environmental incident seriously,” Exxon wrote. “We have a passion to reduce incidents and releases.”

Some residents and workers wonder whether ExxonMobil disclosed the massive amount of benzene released last June because regulators had swooped in to investigate. “If they could have hid it, they would have hid it,” contends Bob Landry, of the United Steel Workers Local 13-12.

The Louisiana Department of Environmental Quality is exploring that question.

In their 206-page report in 2012, LDEQ inspectors determined that Exxon supervisors failed to notify the agency once they knew a “substantial amount” of benzene was emitted. An Exxon Baton Rouge environmental manager informed inspectors the company had become aware of the leak’s extent at 12:30 p.m. that first day — just seven hours after notifying the state — when its engineers calculated the vapor loss. Exxon disclosed the calculations six days later.

The agency “believes Exxon knew more about the leak than it shared with us,” says Cheryl Nolan, LDEQ’s enforcement chief. She declined to elaborate, citing the company’s appeal.

Exxon supervisors insist they intended to notify regulators of the growing leak. “As the data came in we shared those concentrations with” the LDEQ, says environmental manager Reese, noting that his calculations kept changing as workers collected the naphtha and tested the air. “We want to be open and honest.”

The Trouble in Shreveport

Upstate in Shreveport, residents have for years complained of the Calumet Specialty Products oil refinery’s upsets, which have shattered windows and shaken foundations. Regulators wouldn’t necessarily know about the drama from company reports. The refinery has filed just 83 incident reports with the LDEQ from 2005 to mid-2011, among the lowest numbers in the state, the Bucket Brigade’s data shows.

Tired of the pervasive “rotten-egg” stench, residents have kept event logs and taken samples with specially equipped buckets, exposing unsafe levels of hydrogen sulfide. The gas causes headaches, eye irritations and sore throats. “It’s a battle every day,” confides Velma White, of the Residents for Air Neutralization, “and I’m tired.”

In August 2011, after a push by RAN and the Bucket Brigade, EPA inspected the refinery, uncovering a series of plant failures. The agency also found a litany of reporting problems. Calumet managers notified the EPA of six incidents in five years, yet their internal files documented nearly 600 — 100 times as many — a 2011 EPA document shows. Inspectors audited 161 records, finding most lacked the basic required information. Some offered no details.

Calumet’s plant manager, Tom Germany, didn’t respond to emails and calls seeking comment, and neither did other facility representatives. According to the EPA’s inspection report, Germany told regulators that “he knows what good looks like and recognizes that Calumet is not there yet.”

In the ensuing 18 months, Calumet managers have filed 19 reports of “unauthorized discharges” with the state, nearly one a month. “You’d have thought they’d be more cautious” since the EPA visit, says RAN’s White. “But they’re still piling it on us.”

Sometimes, the government stick is more tepid than expected. More than a year and a half after the EPA’s damning report in Shreveport, regulators have yet to issue violations. Advocate White says she met with EPA officials and Calumet supervisors as part of negotiations in a civil enforcement action — relaying community demands for anti-pollution projects including a medical mobile unit. While EPA officials told her to expect a “large” fine, she says past settlements with Calumet, including a $1 million fine levied by state regulators in 2010, have meant little in real terms.

“It didn’t solve the problem,” White says. “You send DEQ and EPA to Calumet, and they come out with roses.”

Some former regulators view such fines as “ineffective.” As TCEQ commissioner, Soward tried to change the way the agency determines financial penalties, to no avail. Today, he says, upset events aren’t treated “any differently than a common violation,” rendering fines so paltry companies have no incentive to stop.

Citizen suits, whistleblowers expose truths

The citizen suits in Texas may reveal deeper truths than regulators have found. In 2008, environmental groups sued Shell over recurring emissions at its Deer Park facility, which ranked among the state’s top 20 upset emitters at the time. By 2010, Shell had settled the case, agreeing to pay a $5.8 million penalty for its violations, a record in any Texas citizen suit, and to annually reduce the plant’s upsets in volume and number. Since then, Shell has cut upset emissions by 35 percent, court records show.

“That proves it right there,” says Karla Lande, who lives across a river from Shell Deer Park, and attributes her lost sense of smell partly to its upsets. When companies are forced to ease upsets, she adds, “They’re able to do it.”

In Baton Rouge, it took an ExxonMobil worker to shine a light.

The first day of the valve leak, Bucket Brigade advocate Anna Hrybyk remembers giving two EPA officials a “toxic tour” of Standard Heights and noticing a “rancid smell.” She got a headache; the officials, she recalls, “were like, ‘Quick, get in the car, roll up the windows.’ ” On June 15, Hrybyk asked regulators about the incident, and received an email assuring her the initial “estimated quantity was 10 lbs.”

The next day, a whistleblower worker tipped off Hrybyk to a different scenario. More than 48 hours into the incident, company records show, refinery employees were still collecting naphtha from the sewer, trying to suppress benzene vapors. Hrybyk dialed the state’s hotline, setting off a series of regulatory activities that would end in the LDEQ’s enforcement order. The July 2012 notice of violation says Exxon, among other things, was “emitting pollutants not authorized by a permit.” The action, pending the company’s legal challenge, could result in penalties.

Critics believe regulators never would have brought down the hammer without outside pressure. Nolan, the LDEQ enforcement chief, acknowledges that agency officials “didn’t act until we got a complaint,” but stresses that the enforcement order proves “we do act when a company has unauthorized releases.”

For residents, it all seems like more of the same. In the aftermath of the leak, Bowman displayed posters in her yard declaring, “ENOUGH IS ENOUGH,” helped form the Standard Heights Community Association, and traveled to the nation’s capital to lobby.

As the months have passed, feelings of helplessness have surfaced. She has noticed other pungent odors pervading her neighborhood. The Bucket Brigade’s latest data show 13 incidents at Exxon’s Baton Rouge complex since last June’s release, emitting more than 62,000 pounds of hydrochloric acid in one upset last November alone.

“I live up in fear here,” Bowman says. “I’m just sitting here, waiting to get poisoned.”

David Donald contributed to this report.

Corporations, pro-business nonprofits foot bill for judicial seminars

2013-05-13T12:14:21-04:00

Conservative foundations, multinational oil companies and a prescription drug maker were the most frequent sponsors of more than 100 expense-paid educational seminars attended by federal judges over a 4 1/2-year period, according to a Center for Public Integrity investigation.

Among the seminar titles were “The Moral Foundations of Capitalism,” “Corporations and the Limits of Criminal Law” and “Terrorism, Climate & Central Planning: Challenges to Liberty & the Rule of Law.”

Leading the list of sponsors of the 109 seminars identified by the Center were the conservative Charles G. Koch Charitable Foundation, The Searle Freedom Trust, also a supporter of conservative causes, ExxonMobil Corp., Shell Oil Co., pharmaceutical giant Pfizer Inc. and State Farm Insurance Cos. Each were sponsors of 54 seminars.

Other top sponsors included the conservative Lynde and Harry Bradley Foundation (51), Dow Chemical Co. (47), AT&T Inc. (45) and the U.S. Chamber of Commerce (46), according to the Center’s analysis.

Sponsors pick up the cost of judges’ expenses, which often include air fare, hotel stays and meals. The seminars in the Center’s investigation took place from July 2008 through 2012.

The Center identified 185 federal district and appeals court judges who reported attending one or more of the seminars over the period, according to disclosure forms, or about 11 percent of the more than 1,700 federal judges in the United States.

Two schools — George Mason University, located in Virginia just outside Washington, D.C., and Northwestern University based in Evanston, Ill., — hosted more than two-thirds of the seminars.

Roughly three-fourths of the more than 800 sponsors listed in documents were individuals, including a number of judges who took trips, raising the possibility that they may have offset the cost of the sponsorships with their donations. Most of the remaining underwriters were companies and foundations.

Determining exactly how much was paid by which sponsor is difficult to determine — amounts are not required to be reported under the disclosure rules.

Judicial conferences are billed as educational retreats intended to improve judges’ understanding of the law and economics. Judges and seminar hosts say the conferences, which feature lectures and panel discussions, provide helpful information that refines their legal expertise.

But they’ve long drawn scrutiny for how they are funded and organized.

Since the 1990s, critics have complained that many of the privately funded conferences serve state and federal judges a steady dose of free-market, anti-regulation lectures that could influence judges’ rulings from the bench.

Those concerns quieted in 2007, when the Judicial Conference of the United States, a group of senior circuit judges who oversee the U.S. Courts, implemented a policy requiring judges and seminar hosts to disclose information about the conferences.

Well-traveled jurists

The most-traveled judges, according to reports filed online by the judges, were U.S. District Judge Charles R. Wolle of the Southern District of Iowa and Chief Judge Thomas B. Bennett of the Northern District of Alabama Bankruptcy Court. Each reported attending nine seminars.

Wolle is a “senior status” judge, meaning he is semi-retired. He did not respond to requests for comment.

The next-most-traveled judges were:

U.S. District Judge Manuel L. Real of the Central District of California and Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals 9th Circuit, covering the Western states, who each took eight trips;
E. Grady Jolly, a federal appeals court judge for the 5th Circuit which includes Texas, Louisiana and Mississippi, and U.S. Bankruptcy Judge Michael B. Kaplan of the District of New Jersey, who each took six trips;
U.S. District Judge Kenneth M. Hoyt of the Southern District of Texas, Chief Magistrate Judge Thomas J. Shields of the Southern District of Iowa and senior-status U.S. District Judge Frederic Block of the Eastern District of New York, each of whom took five trips.

O’Scannlain declined to comment for this story. In an email, Kaplan wrote that the “seminars offer a valuable opportunity for new judicial appointees to enhance their knowledge and skills in complex areas of the law,” including economics.

Wolle, Real and O'Scannlain are all listed as seminar sponsors, though records do not indicate how much they contributed.

The Center identified instances where judges who attended seminars underwritten by certain firms and trade groups later issued rulings in the funders’ favor.

EPA loses case

In April 2009, for example, Jolly traveled to Northwestern University to attend the “Criminalization of Corporate Conduct” seminar sponsored by the American Petroleum Institute, the U.S. Chamber of Commerce and 13 other funders.

Last August, Jolly wrote the majority 2-1 opinion declaring that the Environmental Protection Agency broke the law when it rejected a Texas emissions cap generally supported by the fossil fuels industry.

Jolly, who did not respond to requests for comment, sided with two of the petitioners in the suit — the American Petroleum Institute and the U.S. Chamber.

Charles Geyh, an Indiana University law professor who specializes in judicial ethics, is skeptical that rulings are directly influenced by corporate sponsors of seminars, but noted, “in a cynic’s view that would smack of corruption.”

“Even if it has no effect in terms of the decisions judges make, the perception of influence matters a great deal,” he says. “It looks as if [corporations] are buying influence, even if it’s not true.”

Another attendee of the 2009 “Criminalization of Corporate Conduct” seminar was U.S. District Judge Carl J. Barbier, the Eastern District of Louisiana jurist presiding over a high-profile BP civil trial, which is being held without a jury in New Orleans.

Barbier is in charge of considering whether BP owes billions of dollars in fines for gross negligence leading to the 2010 Deepwater Horizon oil platform explosion and spill. The disaster killed 11 people and contaminated a large swath of the Gulf Coast.

In 2011, Barbier dismissed a wrongful-death claim in a suit brought against ExxonMobil and Chevron USA by the widow of a worker who was exposed to radioactive materials found on the companies’ equipment.

Barbier’s ruling in favor of the oil companies came two years after he attended the corporate conduct seminar, funded in part by ExxonMobil and the American Petroleum Institute, according to documents. The judge did not respond to requests for comment.

Corporate U?

George Mason University’s Law & Economics Center hosted 45 seminars while Northwestern University’s Judicial Education Program hosted 29. A total of 136 federal judges reported attending conferences conducted by the schools during the 4 1/2-year period analyzed by the Center for Public Integrity.

The remaining top five conference hosts, including The Sedona Conference and the Foundation for Research on Economics and the Environment (FREE), collectively organized 28 conferences.

The Koch Foundation and The Searle Freedom Trust supported most of the conferences organized by George Mason and Northwestern. The energy industry was a sponsor in roughly three-fourths of the conferences hosted by Northwestern.

Billionaire brothers Charles and David Koch, major supporters of conservative causes, and their foundations have given millions to George Mason University. As the Center recently reported, the George Mason University Foundation received $4.4 million in 2011 from the Charles Koch Foundation, making up 15 percent of its revenue that year.

The school is the top recipient of Koch foundation money since 1985. George Mason also houses several free market and libertarian research centers, including the Institute for Humane Studies, which received $3.7 million from the Koch foundations, and the Mercatus Center, whose board of directors includes Charles Koch.

Officials from the Charles G. Koch Charitable Foundation did not return phone calls seeking comment for this report.

The Judicial Conference disclosure policy doesn’t require seminar hosts to reveal how much donors contribute to conferences. But corporate-giving reports and nonprofit tax records shed some light on the costs.

Oil industry support

In 2011, for example, ExxonMobil reported giving $20,000 to George Mason specifically for its judicial training program. The oil company gave an additional $30,000 to the university’s Law & Economics Center, which hosts the conferences. Between 2003 and 2007, the ExxonMobil Foundation gave the think tank $150,000.

ExxonMobil officials did not respond to requests for comment.

Another seminar funder, Donors Trust, gave George Mason’s Law & Economics Center nearly $450,000 in general support in 2010. As the Center reported, Donors Trust helps conservative foundations and individuals give money anonymously to nonprofits that may take controversial positions.

A representative of Donors Trust declined to comment for this story.

The Searle Freedom Trust, a foundation advocating “economic liberty” which regularly donates to conservative groups like the Cato Institute and the American Enterprise Institute, contributed a combined $400,000 to George Mason’s judicial education programs in 2010 and 2011.

The school conducted conferences on antitrust law as well as “Corporations and the Limits of Criminal Law,” both funded by AT&T, BB&T, BP America, Cigna, Coca-Cola, Dow Chemical, FedEx Corp. and others.

“The Moral Foundations of Capitalism” was funded by the same group, and was the most popular George Mason conference, drawing at least 10 federal judges.

BP spokesman Scott Dean says the company has no record of ever directly contributing to the seminars but he did say BP gave the law school and the Law & Economics Center more than $37,000 between 2001 and 2008.

Seminars at Northwestern are hosted by the school’s Searle Center on Law, Regulation, and Economic Growth. The think tank, according to its website, was founded in 2006 thanks to a “generous grant” from Daniel C. Searle, the late pharmaceutical industry executive.

In 2009, the foundation gave $200,000 to Northwestern’s Searle Center for its judicial education program.

Another Northwestern seminar funder, The Lynde and Harry Bradley Foundation — a major supporter of conservative organizations, including the Heritage Foundation — gave $210,000 to the Searle Center between 2008 and 2010.

Records show corporate sponsorship at Northwestern was highest from 2008 through 2010, when a man named Henry Butler — now in charge of George Mason University’s Law & Economics Center — ran the Searle Center.

Daniel Rodriguez, dean of Northwestern University’s School of Law, says corporate sponsorships at the school “ended the moment Butler left." Rodriguez, who became the dean of Northwestern's law school last year, says the school recently decided to terminate the programs. He says he's against corporate sponsorship of judicial seminars.

“These programs should be free from any real or perceived conflict of interest,” he says.

Some history

In the late 1990s and early 2000s, advocacy groups and media outlets raised concerns about judges attending privately funded conferences conducted in vacation destinations like Arizona, Montana and Florida.

Critics claimed that the undisclosed trips created conflicts of interest and cast doubt on the ability of judges to decide cases without bias.

Seminars hosted by the Foundation for Research on Economics and the Environment (FREE) attracted the most attention.

FREE, a Montana-based think tank championing “free-market environmentalism,” drew criticism for its ideologically conservative seminars. In 2011, for example, FREE hosted “Terrorism, Climate & Central Planning: Challenges to Liberty & the Rule of Law.”

Critics complained that judges spent their free time golfing, fishing and horseback riding at the conference’s Montana resort location. They worried that judges were being wined, dined and entertained by FREE’s funders, which included Koch Industries and Texaco Inc. (now part of Chevron Corp.).

Media scrutiny prompted members of Congress in 2000 to introduce legislation that would prohibit judges from accepting “anything of value in connection with a seminar.” The bill, which died in committee, was opposed by the Judicial Conference, which claimed it restricted judges’ free speech rights.

Similar legislation failed again in 2003.

In 2007, the Judicial Conference implemented a policy designed to provide “greater transparency” by setting up disclosure requirements for both judges and seminar hosts.

“Instead of banning anything,” says Geyh, the policy “was a way to mollify those who recognized the perception problem without causing the ones who treat [the conferences] as a First Amendment issue to go ballistic.”

Buying influence?

Even with the new policy, the seminars still have critics.

“These seminars are taking place because large corporate interests are hoping to influence the outcome of cases involving themselves or likeminded entities,” says Nan Aron, president of the Alliance for Justice, a liberal organization that first raised concerns about judicial education conferences in a 1993 report titled “Justice for Sale.”

Russell Wheeler, former deputy director of the Federal Judicial Center, an education and research agency for the federal courts, says it’s possible that funders could be truly dedicated to improving judges’ understanding of the law.

But, he says, “You’ve got to be pretty naïve to believe that.”

“It’s the funders that create the problem,” says Stephen Gillers, a New York University law professor who specializes in legal ethics. “The money comes from interests that have matters before the courts, and they’d like to have those matters settled in their favor.”

Many of the seminars are conservative in nature, especially those hosted by George Mason. But there are a few exceptions. A June 2010 conference sponsored by the Open Society Institute, a foundation founded by liberal investor George Soros, focused mainly on human rights law.

(The Center for Public Integrity has received funding from Soros’ Open Society Foundations.)

Events hosted by the Sedona Conference, a nonprofit whose seminars address legal issues like antitrust law and intellectual property, have been funded primarily by law firms.

Speaking from the right

According to The Center for Public Integrity’s analysis, the person who spoke at more judicial conferences than any other was Butler, a professor and prominent conservative formerly of Northwestern and now executive director of George Mason’s Law & Economics Center.

He has taught judicial seminar courses with titles like “Economic Thinking” and “Economics of Insurance.” A former Republican candidate for Congress — he lost a 1992 bid — Butler was a “Koch Distinguished Professor of Law and Economics” at the University of Kansas.

Butler’s resume cites his “professional affiliations” with the conservative Federalist Society and the Mont Pelerin Society, which decries society’s loss of freedoms “fostered by a decline of belief in private property and the competitive market.”

Butler declined to be interviewed for this story. In response to emailed questions about George Mason’s judicial seminars, he wrote, “You seem to have a well-established theme to your story, accordingly we don't see any advantage in collaborating with you.”

Daniel Polsby, dean of the George Mason University School of Law, also declined to answer questions for this story other than to say: “We're very proud of the activities and programs of the Law & Economics Center” via email.

Another frequent seminar instructor is Terry L. Anderson, president of the Property and Environment Research Center, a conservative think tank “dedicated to improving environmental quality through property rights and markets.”

Anderson, a senior fellow at the conservative Hoover Institution, has regularly led “Free Market Environmentalism” lectures at conferences hosted by both George Mason and Northwestern.

Green energy’s ‘false promise’

In January 2011, Anderson was one of four lecturers who spoke at George Mason’s “Advanced Institute on Environmental Economics” conference, which was funded in part by ExxonMobil, BP America and Shell Oil.

The other three speakers were Andrew Morriss, co-author of the book “The False Promise of Green Energy”; Robert K. Fleck, an economics professor who has received thousands of dollars in research grants from the Charles G. Koch Charitable Foundation; and Jason Johnston, a former fellow with the Koch-funded, Anderson-led Property and Environment Research Center and a critic of efforts to reduce greenhouse gas emissions.

“I don’t express views” during lectures, says Anderson. He says his talks are based strictly on economic analysis. “None of my lectures are aimed at changing any judge’s opinion” about a case before them in court.

George Mason law professor Todd J. Zywicki, another regular judicial program speaker, has taught judges about issues like mortgage markets and consumer credit.

He is a senior scholar at the school’s conservative Mercatus Center, and has ties to the Goldwater Institute, a libertarian think tank, and the Competitive Enterprise Institute, which is “dedicated to advancing the principles of limited government, free enterprise, and individual liberty." Zywicki did not respond to a request for comment.

George Mason “is known to stage conferences that have a conservative economic perspective,” says Gillers, the NYU law professor.

One frequent attendee of George Mason’s judicial seminars, Judge Bennett of Alabama bankruptcy court, told the Center “I’m not going to be snowed by anybody’s presentation.” He said he finds the seminars “infinitely invaluable.”

“You can accumulate information much more quickly than if you sit in your office and read stuff,” he says.

Bennett dismisses criticism of George Mason’s judicial conferences — even though he acknowledges that they often feature conservative voices.

“I believe they put on a fairly balanced program,” he says, noting that he doesn’t pay attention to who funds the conferences. “I’ve been to George Mason seminars where they’ve had people who are not conservative. It’s all in the eye of the beholder.”

Stacked panels?

Northwestern’s 2009 seminar titled “Criminalization of Corporate Conduct” included a speaker panel that was very corporate-friendly — something George Mason’s Henry Butler openly acknowledged during his presentation summing up the day’s events.

Butler noted “a question can be raised” about the panels’ balance and “do we have enough people here that are representing the prosecutor’s perspective.” (His remarks are posted on YouTube.) “And I certainly can plead guilty to that accusation.”

“On the other hand,” he continued, “I have to explain to you that we’ve had difficulty in the past getting the U.S. attorneys to participate in these programs.”

The December 2010 “Climate Change Litigation” session hosted by George Mason’s Law & Economics Center was sponsored in part by BP America, ExxonMobil and Shell Oil and featured four speakers.

Two were attorneys who have represented corporate clients like Koch Industries and ExxonMobil. A third speaker, Johnston, the former Property and Environment Research Center fellow, spent part of his presentation criticizing the American civil courts system for making American companies less competitive on the international stage.

Butler, who moderated the panel, acknowledged the imbalance as he introduced a last-minute replacement for the fourth panelist.

"Eric Mayer is going to be pro-public nuisance, climate-change litigation cases, and the other three are basically going to express some skepticism," Butler said in his introduction, identifying Mayer, a lawyer who has represented plaintiffs as well as corporate defendants.

The announcement drew laughs from panelists and audience members.

"This may seem unbalanced,” Butler continued, “but Eric is not daunted by this challenge at all.”

Donor names disappear

The “transparency” policy regarding judicial trips may be weak, but the names of the corporations, foundations and individuals that pay for the conferences at least are available to the public.

Now, even that bit of sunshine is clouding over.

In 2012, George Mason’s Law & Economics Center began listing “xyz corp.,” as a sponsor before listing itself as the only donor on official disclosure documents. However, the think tank does provide a list of donors on its website.

The 2007 Judicial Conference policy allows such reporting if the support comes from general revenues or from endowments or gifts “not raised for the particular educational program or for the purpose of educating judges.”

Geyh, the Indiana University law professor, says the policy enables conference hosts to shield their donors and make it tough for judges to identify potential conflicts before attending seminars.

“It does raise transparency issues,” he says. “It strikes me as some semantic game-playing with the rules.”

John Dunbar contributed to this report.

Court opened door to $933 million in new election spending

2013-01-22T23:36:46-05:00

The Supreme Court’s Citizens United decision unleashed nearly $1 billion in new political spending in the 2012 election, with media outlets and a small number of political consulting firms raking in the bulk of the proceeds.

Spending records released by the Federal Election Commission show that throughout the 2012 election, corporations, unions and individuals that could take advantage of the high court’s ruling were responsible for about $933 million of the estimated $6 billion spent during the contest.

Nearly two-thirds of the new money — about $611 million — went to 10 political consulting firms, according to a Center for Public Integrity analysis. All but one of the top 10 recipients bought advertising in various media markets on behalf of super PACs and nonprofits. Eighty-nine percent of the expenditures made to the top 10 went to spots attacking candidates, the data show.

“For some in the industry, it has been a definite boon,” said Dale Emmons, president of the American Association of Political Consultants. “This election appears to have set a new benchmark on the amount of money that could be spent, because there were no limits on what could be spent.”

The 2010 Citizens United decision and a lower-court ruling allowed unlimited donations to super PACs and nonprofits, independent groups that used the funds primarily to fund ad campaigns.

Media buyers keep only a fraction of the total spending — usually 15 percent, according to Federal Communications Commission records, with the rest going to media outlets.

The winners

The top recipient of independent spending among media buyers was Mentzer Media Services, the Towson, Md.-based media placement firm run by longtime GOP consultant Bruce Mentzer.

Mentzer attracted nearly $204 million from conservative super PACs and other outside groups. In a tough year for Republicans, only 26 percent of the candidates who were supposed to benefit from the ads won their races, according to a Center for Public Integrity analysis.

The firm was the preferred vendor for the pro-Mitt Romney super PAC Restore Our Future, which paid Mentzer nearly $132 million to purchase air time in presidential battleground states.

A Mentzer employee who answered the phone declined to comment on the firm’s involvement in the 2012 election.

Second was Crossroads Media, which was paid about $163 million to buy media time for conservative super PACs and nonprofits in 2012. The firm is run by Michael Dubke, the former president of Americans for Job Security — a pro-Republican nonprofit and one of Crossroads’ top clients.

Waterfront Strategies, which worked for Democratic groups, ranked third, at $81 million.

Democratic-aligned Mundy Katowitz Media, fourth on the list, was the preferred vendor for the pro-Obama super PAC Priorities USA Action, placing more than $57 million in television ads for the group.

American Media & Advocacy Group, a favorite of conservative groups, ranked No. 5 at $27 million.

Target Enterprises — a Los Angeles-based media buyer for conservative super PACs — was paid $17 million, ranking it No. 6. The firm had a dismal success rate, coming in dead last among firms catering to super PACs and nonprofits. Seven percent of its preferred candidates won on Nov. 6.

A woman who answered the phone at Target Enterprises Tuesday said both principals of the company were “mid-flight” and unavailable for comment.

The Center analyzed FEC data compiled by the Sunlight Foundation and the Center for Responsive Politics. The $933 million in spending came from super PACs, nonprofits, and to a lesser extent, “527” organizations that were the favorite independent spending vehicle in past elections.

FEC coordination law a ‘joke’

The Citizens United decision opened a huge new potential market for consultants, but there was a catch. Consultants who work for candidates — but also work for “independent” groups that support those same candidates — have to be careful.

The high court’s decision did not affect the ban on donations to candidates from corporations and unions, nor did it affect contribution limits from individuals. Instead, it focused on spending by independent groups, unaffiliated with candidates.

As long as super PACs act independently of the candidate, there is no danger of corruption, the high court reasoned.

But sometimes the separation between the campaign and the like-minded super PAC or nonprofit can be hard to discern.

Waterfront Strategies, for example, in its FEC filings lists the same address as GMMB — a well-known Democratic media consulting firm and the preferred vendor for President Barack Obama’s 2008 and 2012 campaigns.

Waterfront was the beneficiary of $81 million paid by some of the biggest Democratic outside spending groups — including Majority PAC, a super PAC backing Democrats running for Senate, and the League of Conservation Voters.

The Huffington Post reported that Waterfront is an internal branch of GMMB. It was incorporated in Delaware, and its president is listed as Raelynn Olson, GMMB's managing partner.

Both Waterfront and its parent company, GMMB, worked to elect Democrat Richard Carmona in his unsuccessful bid for Arizona’s open U.S. Senate seat. Majority PAC hired Waterfront to purchase airtime for ads supporting Carmona and attacking his Republican opponent, then-Rep. and now Sen. Jeff Flake. Carmona’s campaign hired GMMB for its ad buys in the same race.

One Majority PAC ad used the same childhood photo of Carmona that was featured in an official Carmona campaign ad.

GMMB did not reply to requests for comment.

Setting up spinoffs is more about “optics” than skirting coordination rules, said Paul S. Ryan, senior counsel for the nonpartisan Campaign Legal Center.

Under current law, as long as a firm assigns each client separate consultants — and those two don’t coordinate their activities — that constitutes a satisfactory firewall, according to Ryan.

“That’s a pretty ridiculous and modest constraint on campaign coordination,” Ryan said.

Texas two-step

American Media & Advocacy, which also has no website, received nearly $27 million to buy media for super PACs and other outside groups.

The organization worked for the Congressional Leadership Fund, a super PAC that paid for ads attacking Pete Gallego, a Democrat who defeated Republican Francisco Canseco in the race for U.S. House of Representatives in Texas’ 23rd District. The firm also worked for Canseco’s campaign.

Records show that at least one of American Media’s buyers purchased media in the San Antonio market for both the Congressional Leadership Fund and the Canseco campaign.

Records show that American Media shares an Alexandria address with the high-profile, bipartisan consulting group Purple Strategies. Purple Strategies failed to respond to the Center’s repeated inquiries about any affiliation that it might have with American Media & Advocacy Group.

American Media and Advocacy is “well aware of the FEC coordination rules, including the common vendor rules,” said Jim Kahl, the group’s attorney, “and they have procedures in place to comply with them.”

In Ohio, American Media & Advocacy Group was paid by the Congressional Leadership Fund to purchase ads slamming Democrat Betty Sutton in the House race for District 16. American Media was also working for Sutton’s Republican opponent, Rep. Jim Renacci.

The same person was listed in records as buying media in the Cleveland market — at the same TV station in at least one case — for both the Renacci campaign and the Congressional Leadership Fund.

Candidates and super PACs can avoid charges of coordination altogether by sending up smoke signals in cyberspace.

For example, one of Target’s top clients was Freedom PAC, a super PAC that paid the firm nearly $3.4 million for ad buys supporting Rep. Connie Mack, the unsuccessful Republican candidate in the Florida Senate race.

Freedom PAC released an ad containing some of the same footage that was on the Mack campaign’s YouTube channel.

Under FEC coordination rules, campaign committees and the outside groups that boost their candidates may share material as long as it is publicly available.

“It’s a pretty big joke that anyone would really believe that these groups are truly independent from the candidates,” Ryan said. “They’re not.”

Adelson gave $40 million to super PACs in final weeks of election

2013-01-25T16:08:45-05:00

Billionaire casino magnate Sheldon Adelson and family poured nearly $40 million into the coffers of GOP-aligned super PACs In the final three weeks of the 2012 campaign, bringing their total giving to the groups to more than $93 million.

Adelson ranks as the top donor to the outside spending groups by a wide margin, according to a Center for Public Integrity analysis of campaign finance records.

Super PACs raised roughly $830 million in the 2012 election, with conservative groups accounting for about 60 percent of the total, according to the nonpartisan Center for Responsive Politics.

By contrast, President Barack Obama’s presidential campaign raised nearly $720 million and Republican challenger Mitt Romney’s raised almost $450 million, according to Federal Election Commission filings.

In all, the top 25 super PAC super donors doled out more than $310 million, about 37 percent of all super PAC receipts, according to the Center’s analysis of data from the FEC and Center for Responsive Politics. Ninety-one individuals gave at least $1 million to super PACs and collectively donated more than $330 million, according to the analysis.

The unlimited donations, which are used primarily to fund candidate attack ads, concern advocates such as Stephen Spaulding, staff counsel at Common Cause.

“People are able to distort the political process, open doors and be kingmakers simply because of the size of their bank account,” he said. “The threat of the spending just hangs over all the political decisions that are happening on [Capitol] Hill.”

After focusing primarily on the presidential contest, in the final weeks of the campaign, Adelson ramped up his giving to GOP-aligned super PACs active in House and Senate races.

In Virginia alone, Adelson invested $4 million into a super PAC that ran attack ads against Democrat Tim Kaine in the final days of the election.

His million-dollar contribution to a super PAC called the “Hardworking Americans Committee” accounted for the bulk of the money used in an unsuccessful last-ditch effort to defeat incumbent Sen. Debbie Stabenow, D-Mich.

And a GOP-aligned super PAC known as the “America 360 Committee” received $500,000 from the Adelsons as it touted incumbent Sen. Scott Brown, R-Mass., and criticized Democratic challenger Elizabeth Warren in telephone calls and mailings.

Despite the spending, however, Democrats prevailed in the most contentious races — including battles for U.S. Senate seats in Massachusetts and Virginia.

Adelson’s donations to super PACs — which can accept unlimited donations from individuals, corporations and unions — set a new standard in political giving.

Texas businessman Harold Simmons, the billionaire owner of Contran Corp., ranked a distant second among super donors, giving $30.9 million, including donations from his company and wife, Annette Simmons.

One of Simmons' business ventures includes a site in West Texas built to store nuclear waste. The Nuclear Regulatory Commission is currently debating rules that could result in sizeable contracts for Simmons' company.

Another Texan, millionaire Bob Perry, ranked third, giving $23.5 million to conservative super PACs. Perry is the owner of Perry Homes and an advocate for the business-led effort to limit damages awarded in lawsuits.

Millionaires and billionaires pepper the Center’s list of the top 25 super donors. The list also includes seven unions and the Republican Governors Association, a so-called “527 committee” that used a super PAC to direct funds into state races. None of these donors broke the $20 million mark.

Billionaire New York City Mayor Michael Bloomberg, No. 9, was a new addition to the list. Bloomberg gave more than $10 million to a group he launched called Independence USA PAC, whose priorities include stronger gun control laws and marriage equality for same-sex couples.

Other new additions to the Center’s list of top donors include:

William S. Rose, Jr., No. 6, the 61-year-old attorney tied to two companies that gave more than $12 million to conservative super PAC FreedomWorks for America since the beginning of October;
the American Federation of State, County and Municipal Employees, No. 12 at $8.2 million;
the American Federation of Teachers, No. 15 at $5.8 million; and
the United Association of Journeymen and Apprentices of the Plumbing, Pipefitting and Sprinkler Fitting Industry, tied for 23rd at $4.2 million.

Rose’s companies — Specialty Investments Group, Inc., and Kingston Pike Development, LLC— both list their address as Rose’s $634,000 private home outside of Knoxville, Tenn. Both were registered with the state of Tennessee in late September, and neither have websites.

Rose, after intense press scrutiny, went public saying Specialty’s mission is to "buy, sell, develop and invest in a variety of real estate ventures and investments." Rose released a lengthy press release, but did not indicate where the money for the donations originated.

Rose did not respond to requests for comment for this story.

The top Democratic-aligned super donor was Chicago media mogul Fred Eychaner, who gave $14.1 million over the course of the election cycle, split among five groups. That sum earned him the No. 4 spot on the Center’s top 25 list.

The pro-Obama Priorities USA Action super PAC collected $4.5 million from Eychaner, ranking as his top beneficiary. He also backed Majority PAC, House Majority PAC, Women Vote!, the super PAC of abortion rights advocacy group EMILY’s List, and America Votes Action Fund, a super PAC that funded get-out-the-vote efforts.

Liberal billionaire hedge fund manager George Soros* made it on the list, donating about $2.8 million split among four Democratic groups. His children Andrea, Alexander and Jonathan also each donated six-figure sums to Democratic super PACs, as did his daughter-in-law Melissa, bringing the family’s total giving to $5.1 million, enough to rank 18th.

Soros' children collectively gave $1.1 million to the pro-campaign finance reform super PAC "Friends of Democracy," which was launched by Jonathan Soros.

This is a far cry from the $23.7 million Soros donated during the 2004 election to 527 groups — the predecessors of super PACs — when he ranked as the top 527 committee financier, according to the Center for Responsive Politics.

Despite fears to the contrary, donations from blue-chip corporations were rare, although a month before the election, Chevron, the third-largest American company according to Forbes, donated $2.5 million to a Republican super PAC closely allied with House Speaker John Boehner, R-Ohio.

One of the largest, high-profile corporate donors was Weaver Holdings, the parent company of the Indiana-popcorn company known for its brands “Pop Weaver” and “Trail’s End,” which is sold by Boy Scouts across the country. Weaver Holdings, along with Weaver Popcorn, donated $3.4 million to American Crossroads, including $1 million during the final three weeks of the election.

American Crossroads was co-founded by GOP strategists Karl Rove and Ed Gillespie.

Unlike traditional political action committees, there is no limit on contributions to super PACs. They emerged following the U.S. Supreme Court’s Citizens United decision and a federal court ruling called SpeechNow.org v. Federal Election Commission.

Adelson is a staunch ally of Israel and an opponent of unions. He first hit the news when he and his relatives pumped more than $16 million into a super PAC that supported former GOP House Speaker Newt Gingrich’s failed bid for the Republican nomination for president.

He and his wife Miriam gave $30 million to the pro-Romney super PAC Restore Our Future, which accounted for nearly 20 percent of the nearly $154 million raised by the group.

In late October, the Adelsons also gave $23 million to American Crossroads, their first donations to the group. Crossroads spent more than $90 million in an unsuccessful effort to help Romney oust Obama.

Roughly two-thirds of Adelson’s $93 million went to super PACs that backed just one or two specific candidates. None of Adelson’s preferred candidates prevailed in any of the 10 races in which these super PACs were active.

Earlier this month, a defiant Adelson told the Wall Street Journal that he would spend even more money in future elections.

"I happen to be in a unique business where winning and losing is the basis of the entire business," Adelson told the newspaper. "I don't cry when I lose. There's always a new hand coming up."

*George Soros is the chairman of the Open Society Foundation, which provides funding for the Center for Public Integrity. For a list of the Center's donors, visit this page on our website.

GOP gov's group raises $100 million in mostly losing effort

2012-12-12T13:12:27-05:00

Despite outraising its Democratic counterpart by a 2-to-1 margin, the Republican Governors Association won only four of 11 races in the 2012 election, a far cry from the success it enjoyed two years ago.

The Washington D.C.-based political organization raised almost $100 million, according to recently released Internal Revenue Service data. The group targeted six states it considered winnable, losing five of them. Overall, Democrats won seven of this year's 11 contests, but the GOP still managed to pick up one seat in North Carolina, long held by Democrats.

The top donors to the so-called “527” organization, which can accept unlimited contributions from billionaires, corporations and unions, are familiar Republican Party patrons — No. 1 is Bob Perry, a Texas homebuilder and perennial RGA supporter, who gave $3.25 million. That’s a little more than half of what he gave in 2010.

Billionaire casino magnate Sheldon Adelson is No. 2, with $3 million in donations between him and his wife. According to the latest Federal Election Commission reports, Adelson is the top donor to super PACs in 2012, doling out more than $93 million along with his family.

Conservative billionaire David Koch — who has not made any contributions to super PACs — was the organization’s third-highest donor, writing two checks totaling $2 million. Koch is co-owner of the second-largest privately held company in America, Koch Industries, an energy conglomerate.

Seven of the RGA’s top 10 donors are corporate executives who gave at least $1 million. Two of them, Paul Singer and Kenneth Griffin, are hedge fund managers.

Six of the Democratic Governors Association's top donors were unions. The American Federation of State County and Municipal Employees topped the DGA donors list, giving about $1.3 million. The Service Employees International Union gave about $1.1 million while the American Federation of Teachers gave at least $772,000.

Top corporate donors to the DGA included pharmaceutical giants Pfizer, which gave almost $700,000, and AstraZeneca, which contributed nearly $600,000. The companies also gave comparable sums to the RGA. The DGA also got corporate support from health insurer United Healthcare Services Inc., and AT&T.

The DGA raised nearly $50 million, the organization's "strongest fundraising year ever," according to spokeswoman Kate Hansen.

The DGA and RGA have devised national strategies for collecting unlimited funds from unions, corporations, and wealthy individuals, and funneling the money into state races. Using a network of state-based PACs, the RGA and DGA have maneuvered around various state limits on campaign giving.

“They’ve had an enormous impact on state elections across the nation,” said Ciara Torres-Spelliscy, an election law expert at Stetson Law School. “In many states they were consistently a top spender.”

The circuitous methods used by both organizations to inject corporate and union cash into state races and mask the identity of its donors have raised legal questions, prompted lawsuits, and tested the capacity of state election boards to enforce limits on outside spending.

Both organizations have told the Center for Public Integrity that they fully comply with campaign finance laws, and that they report their donors and spending to the IRS.

The RGA set up a federal super PAC called RGA Right Direction, and fed it with $9.8 million in contributions. The super PAC — another type of organization that can accept unlimited donations from individuals and corporations — then made a large contribution to Indiana Republican candidate Mike Pence, and bought ads in tight state races in Montana, Washington, New Hampshire, and West Virginia.

Super PACs are normally used to spend money on federal campaigns. By passing the funds through the super PAC, which reported its sole donor as the RGA, the association effectively shielded the identities of the donors who paid for ads in the state races.

In North Carolina, the RGA spent millions of dollars, directly from corporate treasuries to win in a state long led by Democratic governors. The unlimited contributions from dozens of corporations across the country went toward ads supporting Republican candidate Pat McCrory, who won convincingly over Democratic Lt. Gov. Walter Dalton.

The DGA, too, used a network of state-affiliated PACs, to fund ad campaigns in battleground states like Montana and North Carolina. It was the primary funder of a PAC called North Carolina Citizens for Progress, which purchased ads attacking McCrory.

While America’s wealthiest corporate executives tend to prefer the RGA, and unions give almost exclusively to the DGA, some donors played both sides this election.

Agricultural giant Monsanto, credit card company Visa and health insurance company Humana were large donors to both the RGA and DGA — each giving about $100,000 to both groups.

Despite the Republicans' win-loss record, RGA spokesman Michael Schrimpf called 2012 "a successful year by any standard" with Republicans now in control of governorships in 30 states. Most of those gains, however, came in 2010. The North Carolina win and the failed effort to recall Scott Walker, Wisconsin's Republican governor, in June, were high points for the GOP.

In addition, in five states targeted by the RGA where it lost, the Democrats held advantages unrelated to fundraising.

Missouri and West Virginia featured Democratic incumbents. Three other states — Montana, Washington and New Hampshire — had open seats where a Democrat had previously been in power.

The two organizations will put their fundraising powers to the test again in 2013, when Virginia and New Jersey choose their next governors.

Michael Beckel contributed to this report.

Super PACs spend big for Romney in final weeks of campaign

2012-11-06T21:01:05-05:00

Outside groups spent more than $190 million on the presidential election in the final three weeks of the campaign, with about $155 million aiding Republican presidential nominee Mitt Romney.

The total is more than 40 percent of spending by super PACs, nonprofits and other organizations in the presidential contest since the general election began and is more than any other three-week period in the race.

Since Oct. 29 alone, GOP-aligned outside spending groups outspent their Democratic counterparts in the presidential race $84 million to $20 million, according to a Center for Public Integrity analysis of Federal Election Commission records collected by the Sunlight Foundation.

“Memories are short,” said attorney Dan Backer, whose clients include several conservative outside spenders. “The more you can define the message in the final days, the more likely you are to motivate your base, sway undecided [voters] and turn off supporters of your opponents.”

The outside spending no doubt helped Romney in his fight with his better-funded opponent, President Barack Obama — the Romney campaign reported about $53 million in the bank through Oct. 17 compared with the Obama campaign’s nearly $94 million.

The top spenders during the home stretch were super PACs Restore Our Future, which spent more than $45 million on ads in the presidential contest since Oct. 17 and American Crossroads, which spent $35 million.

Restore Our Future was created by several former Romney aides. American Crossroads was co-founded by GOP strategist Karl Rove.

A study by the Wesleyan Media Project reports nearly 100,000 ads were aired by all political organizations, including campaigns, between Oct. 22 and Oct. 29.

GOP groups dominated the airwaves in Columbus, Dayton, and Toledo, Ohio, as well as Tampa, Fla., the study found. Democratic groups, led by the Obama campaign, enjoyed an edge in Las Vegas, Milwaukee, Norfolk and Roanoke, Va.

Last-minute ads from conservative groups slammed Obama on everything from foreign policy to the economy.

One American Crossroads ad accused the president of “making China stronger and America weaker,” while ads produced by Restore Our Future accused him of “flat-lining” the economy and argued that it could “stay dead” for four more years unless Romney was elected.

Meanwhile, Romney was hit in the final days by ads emphasizing his Medicare proposals and private equity background.

One ad from the pro-Obama super PAC Priorities USA Action, created by two former White House aides, alleged that Romney was “director of a company that stole millions from Medicare” and contended that as president, Romney would “end Medicare as we know it.”

Overall, Priorities USA Action pumped more than $21 million into ads during the final three weeks of the election.

Thanks to changes to campaign finance law in the wake of the U.S. Supreme Court’s 2010 Citizens United ruling and another federal court decision, nonprofits and super PACs are free to collect donations of unlimited size from nearly any source.

Money raised from individuals, corporations and unions is used to pay for advertisements — so long as they are not coordinated with the campaigns they are designed to aid.

The advertising surge included several high-profile U.S. Senate races.

Republicans need a net gain of four seats to wrest control of the Senate away from Democrats.

In Indiana, allies of Richard Mourdock have poured at least $7 million into the race during the past three weeks, according to the Center’s analysis of data from the Sunlight Foundation. That’s about half all money spent by outside groups backing Mourdock during the general election race to date.

Mourdock beat six-term incumbent Sen. Richard Lugar in the primary.

Outside groups supportive of Democratic Rep. Joe Donnelly got a boost after Mourdock said pregnancies arising after a rape were “something God intended to happen” at an Oct. 23 debate.

Pro-Donnelly outside spending groups have spent more than $10 million over the course of the general election and more than $5 million in the final three weeks.

Polls now show Donnelly with a slight lead over Mourdock in the Republican-leaning state.

Not all outside spending has favored Republicans.

During the past three weeks, conservative groups sunk at least $1.8 million into the Missouri race for U.S. Senate, where they hoped to defeat incumbent Democrat, Sen. Claire McCaskill.

McCaskill’s allies spent about $3 million during the same period.

Rep. Todd Akin, her Republican opponent, bucked calls from his own party to drop out of the race after he said women who were victims of “legitimate rape” rarely get pregnant. Many deep-pocketed conservative groups that had been spending in the race directed their resources elsewhere following the comment.

In the final three weeks, outside groups have spent nearly $70 million on advertisements in five hotly contested Senate races — Montana, North Dakota, Ohio, Virginia and Wisconsin.

Conservative groups account for 62 percent of the spending, the analysis found.

The contentious race between Republican George Allen and Democrat Tim Kaine, both former governors, has drawn more than $50 million in outside spending so far with almost $22 million coming in the past three weeks —about $14 million from conservative groups and about $8 million from liberal groups.

Crossroads GPS, the conservative nonprofit sister group of American Crossroads, sought to tie Kaine to Obama, saying both “ran up spending” and endorsed “defense cuts that could kill over 200,000 Virginia jobs,” according to one attack ad.

Meanwhile, VoteVets Action Fund, a Democratic-aligned nonprofit, launched an Oct. 26 ad saying Allen has repeatedly “turned his back” on veterans, a key voting bloc in Virginia.

“If George Allen thinks veterans’ programs are a waste, maybe voting for him is the real waste,” says the David Nasse, a veteran of the wars in Iraq and Afghanistan.

Rachael Marcus contributed to this report.

Investment managers top list of super PAC donors

2012-11-05T11:17:13-05:00

Despite his vast wealth, Sheldon Adelson was not exactly a household name when the Republican presidential primary campaign got under way. But the casino magnate’s multimillion-dollar contributions to a pro-Newt Gingrich super PAC ended that.

Adelson’s support was linked to a shared stance with Gingrich as staunch supporters of Israel. Not quite so well publicized was Adelson’s financial stake in who wins the presidency.

A second Obama term, thanks to the incumbent’s proposed tax policies — could cost Adelson billions if he brought home profits earned at his overseas casinos, according to tax experts.

Since Gingrich flamed out in the primaries, Adelson and his wife Miriam have shifted their allegiance to GOP presidential nominee Mitt Romney, giving the pro-Romney super PAC Restore Our Future $20 million.

With Romney as president, Adelson, the billionaire chairman and CEO of the Las Vegas Sands Corp., could bring his profits home tax-free.

The Las Vegas Sands’ overseas operations account for 86 percent of its revenue from casinos, hotels and shopping, according to its 2011 annual report to the Securities and Exchange Commission. The Sands’ most lucrative holdings are in Macau, a special administrative region in China.

Super PACs like Restore Our Future can accept unlimited contributions from billionaires, corporations and unions and spend the money on ads helping their favorite candidates, thanks to the U.S. Supreme Court’s 2010 Citizens United decision.

Adelson and family’s nearly $54 million in contributions through Oct. 17 to conservative super PACs puts the gambling industry at second place among super PAC donors’ corporate interests, according to the Center for Public Integrity’s analysis of data from the Center for Responsive Politics and the Federal Election Commission.

With no limits on giving, economic analysis of donations to super PACs are more about a few wealthy individuals’ interests than fulfilling an industry’s legislative goals.

Adelson and family are responsible for more than 98 percent of all casino industry contributions to super PACs — or $53.7 million out of $54.6 million — but his legislative agenda does not necessarily reflect that of the American Gaming Association, which lists as major issues online gambling and visa reform to allow more high rollers to come to American casinos.

Finance industry tops list

The top industry-donor to super PACs in the 2012 election cycle by far has been securities and investments at roughly $94 million, according to records.

The list of donors is dominated by a relatively small number of extremely wealthy hedge fund and private equity millionaires and billionaires. The top 10 individual donors to this industry are responsible for almost half of its super PAC contributions. Twenty-one people and two corporations have given $1 million or more.

The average itemized individual contribution to all super PACs is a little more than $23,000, according to the Center’s analysis. The average contribution to a super PAC from the investment industry is more than $96,000.

The third-leading industry-donor, chemicals and related manufacturing, accounts for $31 million of all super PAC contributions, and almost $27 million comes from Harold Simmons, his wife Annette and his company. Contran Corp. controls several subsidiaries involved in chemical manufacturing, waste disposal and other businesses.

Topping Simmons’ agenda is minimizing the regulatory reach of government, according to an interview he gave to The Wall Street Journal in March. Many of Contran’s subsidiaries are subject to environmental regulations that cut into profits.

The fourth-leading donor by industry is real estate at about $23 million thanks to seven-figure donations from the National Association of Realtors and Harlan Crow and Crow Holdings. The NAR favors access to credit and tax breaks so more people can afford to buy homes.

Fifth is the homebuilding industry with about $22 million, again a category dominated by a single wealthy individual — Texan Bob Perry. He has given $21.5 million to conservative super PACs to date.

Perry is perhaps best known for financing the Swift Boat Veterans for Truth ads during the 2004 election that helped sink John Kerry’s presidential campaign, but he has been a major donor to Texas political campaigns since the 1980s. He favors limiting damages a jury can award plaintiffs in civil suits.

Romney is ‘one of them’

The largest donors from the investment industry are not investment banks but an exclusive sub-group known as “alternative investing” — hedge funds and private equity firms.

Among the 26 donors to Restore Our Future who have given $1 million or more, 11 are in the hedge fund or private equity business.

Among the alternative investment industry’s top donors are Robert Mercer, a co-CEO of the hedge fund Renaissance Technologies, who gave $1 million to Restore Our Future and $600,000 to Club for Growth Action, which favors eliminating the capital gains tax.

Other top donors include TD Ameritrade founder Joe Ricketts, PayPal co-founder Peter Thiel, who now runs an investment firm, Paul Singer of Elliott Management, Wyoming investor Foster Friess and John Childs, chairman and CEO of a private equity firm.

Eighty percent of super PAC contributions from the investment community have gone to conservative super PACs, according to the Center's analysis.

James Simons, the founder of Renaissance Technologies, and George Soros*, the chairman of the hedge fund Soros Fund Management, have given a combined $10.1 million to pro-Obama and pro-Democratic super PACs.

Romney himself was a private equity man in his days at Bain Capital, which he co-founded.

“They view [Romney] as one of them,” said David Kautter, the director of the Kogod Tax Center at American University. “They tend to view him as someone who accumulated substantial wealth doing what they do, someone who understands what they do and someone who believes that what they do provides substantial value to the economy.”

Romney has said he would maintain, lower or eliminate the capital gains rate at various points during the race. Low rates benefit hedge fund and private equity managers, whose compensation comes primarily from investment returns.

Obama supports treating this type of compensation as regular income and subject to income tax rates up to 39.6 percent. In addition, Obama advocates raising the capital gains rate to 20 percent.

Adelson’s gamble on Romney

Romney was not Adelson’s top choice. Adelson invested $16.5 million in former House Speaker Gingrich via Winning Our Future, the primary pro-Gingrich super PAC, before the candidate dropped out May 2.

Now the top supporter of Restore Our Future, Adelson has said he is willing to spend $100 million electing Romney and a Republican Congress. The spending has made him newsworthy.

Adelson’s steadfast and occasionally controversial positions on Israel’s national security have also increased his profile in the national media and provided fodder for the opposition.

He opposes a two-state solution for Israel and the Palestinian Authority, once calling it a “stepping stone for the destruction of Israel and the Jewish people.”

He was also once one of the biggest backers of AIPAC — the American Israel Public Affairs Committee. But Adelson broke off relations with the group in 2007 when it supported increasing U.S. economic aid to Palestinians.

Adelson shifted his financial support to the Republican Jewish Coalition, where he sits on the board. The politically active nonprofit has reported spending $4.6 million on ads attacking Obama.

In an op-ed for the JNS News Service, Adelson wrote that American Jews should not trust Obama when it comes to Israel.

“For Obama, the issue is only political; for Israel, it’s existential — a matter of survival,” he wrote.

On paper, both Obama and Romney have similar positions on Israel — they both are committed to having a “special relationship” with the nation.

“Where they differ is in the way the current president perceives Israel,” said Aaron David Miller, an Israel expert at the Woodrow Wilson Center. “Israel is more of a matter of national security interest than it is a values argument.”

While Romney has a more “spontaneous, emotional instinct” to identify with Israel, Miller said, Obama seems less emotionally connected.

“In part it’s a generational thing,” Miller said — Obama came of age after the Israeli occupation. “And in part it’s a matter of temperament.”

Idealism or self-interest?

It is impossible to say for certain whether Adelson’s support of Romney is based on idealism or self-interest or both. Adelson’s spokesman refused to comment for this report.

Romney’s tax policies and Adelson’s financial interests are aligned, especially when it comes to tax treatment of overseas profits.

The Romney-backed “territorial tax system” would allow the Sands to bring its future foreign profits back to the U.S. free from U.S. income tax. Romney’s plan also calls for a “tax holiday” that would allow American companies with profits stashed abroad to repatriate them tax-free.

A 2004 tax holiday resulted in the repatriation of one-third of all offshore earnings, according to a report from the Congressional Research Service.

Experts predict a territorial system would have a similar effect.

“I think it is very likely that more foreign earnings will end up back in the U.S. than we would have under the current worldwide system,” said Kautter.

Obama opposes the territorial tax system and has proposed a minimum tax for multinational corporations’ overseas earnings.

Under the current system, American companies that have operations abroad pay income tax to the country in which they earn the money then pay U.S. income tax when they bring profits home. Income taxes paid to the foreign government are deducted from the U.S. income tax when the money is repatriated; earnings left abroad are not subject to U.S. taxes.

Will McBride, the chief economist at the conservative Tax Foundation, calls the U.S. income tax on foreign profits a “repatriation tax.”

“Naturally that discourages business from bringing that money back home,” he said.

Obama and others argue that a territorial tax system would encourage American businesses to move overseas.

The Sands holds $5.6 billion in in overseas profits, according to its 2011 annual report. Under Romney’s policy, Adelson and his company could repatriate it all for free.

The tax holiday combined with a switch to a territorial tax system would potentially provide a $1.8 billion tax break to the Sands the first year, according to a study from a liberal think tank, the Center for American Progress.

Adelson himself, as majority owner, stands to benefit.

“By a reasonable but conservative estimate, the tax cut he stands to get from Romney’s tax policies over a four-year term would be well over $2 billion,” said Seth Hanlon, the author of the study. “When you consider he’s going to spend $100 million on the presidential race, the return on investment is more than 2000 percent.”

*George Soros is the chairman of the Open Society Foundation, which provides funding for the Center for Public Integrity. For a list of Center donors, visit the website.

Christian college asks for refund of donation to super PAC

2012-10-17T06:00:03-04:00

A nonprofit college says it has asked for a refund of a $5,000 donation to a conservative super PAC after an inquiry by the Center for Public Integrity.

Colorado Christian University gave the money last month to “Jan PAC,” the super PAC of Arizona’s Republican Gov. Jan Brewer, according to records filed with the Federal Election Commission on Monday. The college is a 501(c)(3) nonprofit, meaning it is legally prohibited from making political contributions.

After being contacted by the Center on Tuesday, John Andrews, director of the university-affiliated Centennial Institute, said the payment was a bookkeeping error. Andrews said that Jan PAC promised to refund the amount within 24 hours.

This past summer, Brewer spoke at the Western Conservative Summit, hosted by the institute and the university. According to Andrews, the college wanted to thank the governor for her appearance and her representatives requested a donation to the PAC.

“It goes down as the stupidest mistake I’ve made in a while,” Andrews said.

Super PACs were made possible following the 2010 U.S. Supreme Court's Citizens United decision which allowed corporations and unions to spend unlimited amounts on political advertising. Super PACs are banned from coordinating their activities with federal candidates.

FEC records show Brewer's super PAC has paid for a mailing opposing Arizona Democrat Kyrsten Sinema, who is running for a new U.S. House seat in the state.

Charities run the risk of losing their exempt status if they engage in political campaign activity, according to Marcus Owens, former director of the Exempt Organizations Division at the Internal Revenue Service. More likely, though, the donation would be subject to a 10 percent excise tax.

Owens warned that other types of indirect campaign support, such as providing electronic equipment or access to mailing lists, are also prohibited.

“If it’s more pervasive, then that could conceivably trigger more significant consequences,” he says.

Located in Lakewood, Colo., the small Christian college has deep political connections. Its president, William L. Armstrong, served as a Republican congressman and U.S. Senator from 1973 to 1991.The college is also home to the Centennial Institute, a conservative public policy think tank.

Andrews was a Republican state senator in Colorado from 1998 to 2005 where he served as senate president. He also worked for the administrations of Presidents Richard Nixon, Ronald Reagan and George W. Bush.

On Oct. 12, Jan PAC reported spending about $23,000 on a mailer opposing Sinema, who, if elected, will be the "first openly bisexual member of Congress," according to The Advocate. The mailer calls Sinema, a lawyer and former state legislator, “wrong for America” and accuses her of putting "liberal self-interest" ahead of the public’s, according to a story in the Arizona Republic.

Sinema is running against Republican Vernon Parker in Arizona’s 9th Congressional District, a new seat created thanks to the state’s population growth. It has been targeted heavily by both national parties.

Sinema has been the subject of more than $900,000 in negative ads paid for by the National Republican Congressional Committee, according to the Center for Responsive Politics. Parker has been hit by more than $440,000 in negative ads paid for by Democratic super PAC House Majority PAC. Sinema has been helped by almost $700,000 in spending by the Democratic Congressional Campaign Committee, according to CRP.

According to Jan PAC's newly filed documents, in addition to Colorado Christian, another educational organization, the Apollo Group, the parent company of the University of Phoenix, also donated $5,000 during the third quarter. But as a for-profit corporation, the Apollo Group is legally allowed to make donations to super PACs.

Jan PAC did not return request for comment.

This isn’t the first time a 501(c)(3) group has made a donation blunder. Last July, pro-Mitt Romney super PAC Restore our Future accepted $100,000 from the Rod and Leslie Aycox Foundation. The super PAC returned the donation in February.

John Dunbar contributed to this report.