Michael Beckel stories from The Center for Public Integrity

Spurs owner brings the heat in political money game

2013-06-19T16:03:36-04:00

On the court, the San Antonio Spurs and Miami Heat are both powerhouses hungry for a National Basketball Association championship.

But in the political arena, it's a blowout in favor of the Spurs.

Ahead of the 2012 elections, Spurs owner Peter Holt and his wife, Julianna, donated four times as much money to federal politicians and political groups as Miami Heat owner Micky Arison and his wife, Madeleine, according to a Center for Public Integrity review of data maintained by the Center for Responsive Politics.

The Holts combined to contribute more than $500,000 during the 2012 election cycle. That includes $250,000 given to Restore Our Future, the super PAC that backed GOP presidential candidate Mitt Romney, and a $100,000 donation to the Texas Conservatives Fund, the super PAC that supported Texas Lt. Gov. David Dewhurst’s failed U.S. Senate bid.

The Holts also donated more than $90,000 to the National Republican Senatorial Committee over the two-year period, and they made more modest contributions to a dozen other federal candidates.

The Arisons, meanwhile, combined to give about $125,000 to federal candidates and committees. But they didn't donate to super PACs, which proliferated in the aftermath of the U.S. Supreme Court’s Citizens United v. Federal Election Commission decision in 2010.

Super PACs have no limits on the amount of money they may raise or spend to support candidates. They may not, however, coordinate their spending with the candidates they hope to elect, nor may they directly contribute money to candidates' campaigns.

The Arisons split their contributions almost evenly between Republicans and Democrats. But the Holts overwhelmingly favored the GOP, with only 2 percent of their political contributions supporting Democrats ahead of the 2012 elections.

Both Holts donated $2,500 to Sylvia Romo who unsuccessfully challenged incumbent Rep. Lloyd Doggett, D-Texas. They each gave Joaquin Castro $1,250 during his successful U.S. House bid. And Peter Holt gave $2,500 to Rep. Henry Cuellar, who is now in his fifth term.

By contrast, the political candidates and groups most favored by the Arisons included the National Republican Congressional Committee ($15,000); Rep. John Mica, R-Fla., who is now in his 11th term ($10,000); the leadership PAC of House Majority Leader Eric Cantor, R-Va. ($7,000); and the leadership PAC of Sen. Bill Nelson, D-Fla. ($5,800).

Micky Arison also contributed $10,000 to the political action committee of the Cruise Lines International Association during the 2012 election cycle. In addition to his basketball exploits, he serves as the chief executive officer of cruise operator Carnival Corp.

The Spurs and Heat tip off Thursday in a championship-deciding Game 7.

New super PAC forms in contested Calif. district

California,United States — 2013-06-17T12:35:34-04:00

A new super PAC called "Empower Central Valley" has registered with the Federal Election Commission, listing its address in California's 10th Congressional District, which is represented by sophomore Rep. Jeff Denham, a Republican.

Last year, the district was one of the top targets for partisans on both sides of the aisle. On top of the $4.4 million spent by the candidates themselves, outside groups spent more than $8 million on the race, according to the Center for Responsive Politics.

Just two other House contests in California saw more non-candidate spending during the 2012 election cycle.

The Democratic Congressional Campaign Committee alone pumped nearly $2.7 million into the district in 2012 on advertisements critical of Denham or supportive of Democratic candidate Jose Hernandez. Meanwhile, the GOP-aligned American Action Network spent about $2.5 million on such messages, according to the Center for Responsive Politics.

Empower Central Valley's objectives are not yet clear. The group lists its treasurer as Nancy Watkins, a Florida-based Republican accountant who did not immediately respond to requests for comment from the Center for Public Integrity. Its mailing address is listed as a box at a UPS store in Tracy, Calif., in San Joaquin County, and it does not have a website.

Watkins has served as the treasurer for dozens of GOP candidates and groups across the country, including Rep. Michele Bachmann's failed presidential bid in 2012. Earlier this month, she signed on as treasurer for a super PAC that's backing Republican Gabriel Gomez in Massachusetts' special U.S. Senate election.

While Republicans have a slight edge in California's 10th Congressional District, President Barack Obama beat out Republican Mitt Romney there by 3.5 percentage points in 2012, according to the nonpartisan Cook Political Report, which currently ranks the district among the top six dozen competitive House districts in the country.

Obama campaign fundraisers picked for plum ambassadorships

2013-06-14T18:39:47-04:00

President Barack Obama’s new picks to represent American interests in Denmark, Germany and Spain are all major Democratic fundraisers.

Rufus Gifford — who served as Obama’s 2012 campaign finance director and chairman of the president’s 2013 inaugural committee — has been selected to be the new ambassador to Denmark, the White House announced in a press release late Friday afternoon.

Obama also intends to nominate John B. Emerson, an executive at the investment firm The Capital Group Companies, and John Costos, a vice president at Home Box Office, to serve as the U.S. ambassadors to Germany and Spain, respectively.

Emerson raised at least $500,000 for Obama’s 2012 re-election efforts, according to a Center for Public Integrity review of information released by the campaign.

So, too, did Costos, along with his partner Michael Smith — whom the Obamas selected in 2008 to redecorate the White House and who currently serves on the Committee for the Preservation of the White House.

The actual amounts raised by the men could be much higher as the Obama campaign only voluntarily released information about their bundlers using broad ranges, the highest of which was “more than $500,000.”

Gifford, Emerson and Costos are among the first individuals to be nominated for ambassadorships since Obama’s re-election that are not career diplomats.

Like Costos, Gifford is openly gay. His former partner, Jeremy Bernard, currently works as the White House social secretary.

Their nominations come as gay rights activists have expressed frustration with the president for being slow to implement campaign promises that would guarantee more equal treatment.

First Lady Michelle Obama was heckled by a lesbian member of GetEQUAL at a Democratic National Committee fundraiser earlier this month.

The U.S. Supreme Court is also set to soon rule on two high-profile gay rights cases.

Obama also announced support for two career diplomats to be ambassadors to Brazil and Ethiopia, as well as Ken Hackett, the former head of Catholic Relief Services, to serve as the ambassador to Vatican City.

All ambassador-nominees must be confirmed by the U.S. Senate.

Elizabeth Warren, nonprofit seek green together

2013-06-12T10:54:06-04:00

During Sen. Elizabeth Warren’s race last year against incumbent GOP Sen. Scott Brown, the League of Conservation Voters spent more than $1 million on “independent expenditures” that either advocated for Warren’s election or Brown’s defeat, including mass mailings and paid canvassers.

The 501(c)(4) nonprofit’s treasury, as well as its related political action committee and super PAC, accounted for the spending, which helped push Warren to victory in a race that ranked among the League’s top electoral priorities. The League also bundled more than $100,000 in earmarked campaign contributions for Warren, federal records show.

Now tonight in Washington, D.C., supporters of the League — one of the nation’s most politically active environmental nonprofits — will gather for a fundraising gala during which Warren, a Democrat, is scheduled to address the crowd.

The event is the latest illustration of how politicians and special interest groups, which by law can’t coordinate election spending, nevertheless forge mutually beneficial ties.

Sen. Al Franken, D-Minn., will also speak at the League’s fundraiser — notable since the nonprofit could play a role in helping propel him to a second term next year.

League spokesman Jeff Gohringer said the two senators should be commended for being “two voices in Congress who are working hard on environmental priorities.”

Lacey Rose, Warren’s press secretary, told the Center for Public Integrity not to “read into” the senator’s appearance “too much.”

“Sen. Warren is a strong advocate for clean energy and environmental protection,” Rose said. “She supports the LCV’s mission to educate the public on global warming, energy and conservation, and was honored to be asked to speak at their event to share her passion for these important issues.”

Warren ultimately raised an eye-popping $42.5 million from all donors ahead of her 7.5 percentage point-victory over Brown.

Next year, Franken, who was narrowly elected to the U.S. Senate in 2008, will again face voters.

The former comedian, who serves as the Senate’s Energy and Natural Resources Committee’s energy subcommittee chairman, is currently one among a handful of candidates promoted on the League's “Give Green” website.

The site steers prospective donors toward pro-environment candidates.

“Franken is a fierce advocate for combating climate change,” said spokeswoman Alexandra Fetissoff, adding that the senator “shares many of the same values and viewpoints on energy and the environment as members of the League of Conservation Voters.”

At the end of the first-quarter of 2013, Franken’s campaign had $2 million in the bank, federal records show.

The League has conducted its annual “Capital Dinner” fundraiser for more than 20 years, said Gohringer, who added the event is about both “celebrating our successes” and rallying for “the fights that lie ahead” in Congress.

Charitable 'matches' used to entice PAC giving

The Coca-Cola Company — 2013-06-11T10:42:36-04:00

Federal law prohibits companies from donating directly to political candidates, which is why individual employees must voluntarily fund corporate-sponsored political action committees — and their bosses can't force them to donate.

Yet one enticement companies are using to attract PAC support is a program that will "match" employees’ donations with contributions to charities of their choosing.

Take Coca-Cola Co., for instance. Employees who donate to the company's PAC can designate charitable organizations to receive a gift equal to their PAC contributions.

In 2012, Coca-Cola gave $217,000 to charities in the name of employees who contributed to its corporate PAC, according to information disclosed online by the company. That's up from $148,000 in 2011.

Among the most popular charities in 2012 were Children’s Healthcare of Atlanta (nearly $80,000); Special Olympics International (about $35,000); United Service Organization (roughly $30,000); and The Nature Conservancy (about $18,000).

At a national conference for PAC professionals earlier this year, a Coca-Cola official even evangelized such programs to "improve your fundraising numbers."

Coca-Cola spokeswoman Amanda Rosseter told the Center for Public Integrity that the PAC match program was started five years ago to "encourage employees to engage in the political process and at the same time provide support to civic and philanthropic organizations."

The Federal Election Commission has held that corporate PAC matching programs are legal because they “do not provide any tangible benefit to the contributing employee.”

Neither the employee nor the company receives a tax-deduction for such gifts.

Coca-Cola's disclosure of its matching program finances is voluntary; the FEC does not require PACs to include such information as part of their mandatory reports to the agency.

These programs, which have existed since the 1980s, are “relatively common” and “relatively uncontroversial,” said Larry Noble, the FEC’s former general counsel who now heads the nonprofit Americans for Campaign Reform.

“People like the idea that the company [will] match their contribution to the PAC with a contribution to a charity,” Noble added.

While other companies offer similar PAC match programs — aerospace giant Boeing and American Express are among them — Coca-Cola rival PepsiCo. Inc. does not, said Phil Swink, senior vice president of government affairs.

In all, Coca-Cola’s PAC raised $429,000 in 2012 and donated about $500,000 to federal candidates and committees, records indicate.

During the first four months of 2013, the PAC raised $148,000 and gave out $221,500 to politicians, according to its most recent FEC report.

Stealthy super PAC strikes in Mo. special election

2013-06-03T18:34:01-04:00

A newly formed super PAC has invested more than $12,000 into 11th-hour efforts to turn out the vote for Republican House candidate Jason Smith in Missouri, federal records show.

But voters in the Show-Me State's 8th Congressional District won’t know the source of the money behind the pro-Smith messages until long after the polls close in Tuesday's special election.

That's because the Conservative StrikeForce Super PAC, which registered with the Federal Election Commission in March, didn't spend money until last week — well after the final pre-election reporting deadline. The groups isn't required to publicly disclose any of its donors until July 4, when post-election reports must be submitted to the agency.

The Conservative StrikeForce Super PAC spent about $10,000 on Thursday toward a tele-town hall event and telephone calls designed to get voters to the polls, according to a report filed Friday with the FEC. The group, whose address is a mailbox at a UPS store in northern Virginia, also reported spending about $2,000 for robocalls to be placed today and Tuesday.

When the Center for Public Integrity contacted Scott B. Mackenzie, the group’s treasurer, he declined to comment, saying, “I really don’t have anything to say to you. Nice talking with you.” Other Conservative StrikeForce Super PAC representatives did not immediately respond to requests for comment.

The Conservative StrikeForce also operates a traditional political action committee, which raised $6 million during the last election cycle, according to FEC records. Ahead of the 2012 election, it directly contributed more than $100,000 to GOP politicians and spent nearly $500,000 on messages that advocated for Republican candidates, including Reps. Michele Bachmann, R-Minn., and Allen West, R-Fla.

On its website, the Conservative StrikeForce PAC says it was launched by a “small group of devoted conservatives who wanted a way to effectively support candidates by motivating like-minded voters at the grassroots level.”

The super PAC’s expenditures in Missouri rank it as the largest independent spender in the race where Smith, a state representative, is a heavy favorite in the GOP-leaning district, according to a Center for Public Integrity analysis of federal records. His opponent is Democrat Steve Hodges, a fellow state representative and self-described "conservative Democrat" who supports gun rights and abortion restrictions.

Three other PACs have made modest independent expenditures on Smith’s behalf: the National Right to Life Victory Fund, the Missouri Farm Bureau PAC (Southeast District) and the Conservative Campaign Committee — an organization formerly known as the Campaign to Defeat Barack Obama. The three groups together have reported making roughly $8,000 in expenditures in the race.

Tuesday’s special election follows the resignation of Republican Rep. Jo Ann Emerson, who left Congress in February to head the National Rural Electric Cooperative Association, which was her No. 1 campaign contributor during her career, according to the Center for Responsive Politics.

Norm Coleman sees big paydays from nonprofits

2013-05-31T15:15:09-04:00

Leading two politically focused nonprofits has generated big money for former Republican Sen. Norm Coleman of Minnesota — with paydays better than when he served in Congress’ upper chamber.

Coleman collected more than $570,000 during a nearly three-year tenure at the helm of the American Action Network and the American Action Forum, for an average of about $190,000 annually, according to a Center for Public Integrity review of federal filings.

That includes a combined salary of more than $116,000 in 2011, according to the groups' most recent annual reports — though Coleman was only a paid, full-time employee of the organizations for a portion of that year.

According to documents filed with the Internal Revenue Service, Coleman worked a combined 40 hours a week for the two conservative nonprofits during 2009 and 2010 — their first two years of existence, when he served as both groups’ chief executive officer.

He dialed back his time and responsibilities during the third year after taking a job at the Washington, D.C.-based law firm and lobbying shop Hogan Lovells, where his clients this year include Airbus Americas Inc. and Hong Kong-based investment firm Primus Holdings Ltd.

In their annual reports filed with the IRS, the two conservative nonprofits state that compensation levels are determined by reviewing compensation “for similar work at peer institutions” and approved by the organizations’ presidents.

Once Coleman stepped down from the chief executive officer posts, he was “no longer compensated by either organization,” Dan Conston, communications director for the two groups, told the Center for Public Integrity.

Coleman continues to serve as the chairman of the board of the American Action Network and sits on the board of the American Action Forum.

When Coleman was first sworn into the U.S. Senate in 2003, senators received an annual salary of $154,700 — a figure that increased to $169,300 during Coleman’s final year in office.

Many other former lawmakers, Republicans and Democrats alike, seek private-sector employment after serving in Congress.

Working in the private sector can be “pretty alluring,” said Viveca Novak, editorial and communications director of the nonpartisan Center for Responsive Politics.

“There is serious money to be made for a former member,” Novak continued, adding that Coleman’s efforts at Hogan Lovells are likely even more lucrative than his nonprofit work.

Coleman, who did not immediately respond to requests for comment, lost a highly contested race to Democrat Al Franken in 2008. An extended recount battle after Election Day went all the way to the Minnesota Supreme Court, which rejected Coleman’s final appeal of the result on June 30, 2009.

In July, Franken was sworn into the Senate, and Coleman helped launch both the American Action Forum, a policy institute organized under Section 501(c)(3) of the U.S. tax code, and the American Action Network, an “action tank” organized under Section 501(c)(4).

Ahead of the 2010 midterms, the American Action Network spent millions of dollars on ads that criticized Democratic candidates, earning the ire of campaign finance watchdogs that alleged the nonprofit spent too significant a portion of its resources influencing elections.

The group, which has denied the allegations, ranked as one of the most politically active nonprofits during both the 2010 and 2012 election cycles, according to the Center for Responsive Politics.

Coleman is also the chairman of the Congressional Leadership Fund, a super PAC that seeks to expand the Republican majority in the U.S. House of Representatives. That group made news last year for receiving a $2.5 million contribution from Chevron Corp., shareholders of which this week rejected an effort to stop the company from making political donations.

Chevron shareholders reject ban on political spending

Chevron Corporation — 2013-05-29T16:58:34-04:00

Chevron Corp. shareholders today rejected a resolution seeking to prohibit the company from using corporate funds for political activities.

Last year, the oil company was one of the largest corporate super PAC donors, as the Center for Public Integrity has previously reported.

Leslie Samuelrich, senior vice president at the financial advisory firm Green Century Capital Management — the firm was the lead filer of the shareholder resolution — said the measure garnered at least 3 percent of the not-yet-official vote.

But she spun this seemingly miniscule support as good news.

"We're thrilled," Samuelrich told the Center for Public Integrity. "It is the beginning of a turning of the tide."

Just weeks out from Election Day, Chevron donated $2.5 million to the Republican-aligned Congressional Leadership Fund, a super PAC led by former Sen. Norm Coleman, R-Minn., and associated with House Speaker John Boehner, R-Ohio.

Ahead of Chevron's annual meeting in California, the company's board urged shareholders to reject the measure.

"Chevron’s participation in the political process is an important means of protecting the interests of the Company and its stockholders," the company wrote in its 2013 proxy statement.

"A ﬁxed policy barring the company from participating in the political process would undermine the board’s flexibility to exercise its business judgment in a manner that it reasonably believes is in Chevron’s best interests," the board members argued.

The board also noted that Chevron voluntarily discloses on its website information about its donations to political committees and trade associations, such as the $1 million it contributed in 2012 to the U.S. Chamber of Commerce.

Samuelrich told the Center for Public Integrity that the motion's supporters gained enough traction to refile the resolution again next fall, should they so choose.

"We're looking at all our options," she noted. "We're not satisfied with the progress Chevron has made on this front."

In 2010, the U.S. Supreme Court ruled in Citizens United v. Federal Election Commission that corporations were free to use general treasury funds to call for the election or defeat of federal candidates. Corporations may now also donate unlimited amounts of money to super PACs and politically active nonprofit organizations that may, in turn, advocate for or against politicians.

Small donors fueled Michele Bachmann's campaign

2013-05-30T10:28:21-04:00

What do the woman who founded the Congressional Tea Party Caucus, the co-chairmen of the Congressional Progressive Caucus and the U.S. Senate’s lone self-described “democratic socialist” have in common?

They all rank among the top beneficiaries of small-dollar political donors, according to a Center for Public Integrity analysis of federal records.

It’s firm evidence that neither Democrats nor Republicans in Congress have a monopoly on small-dollar givers, who often serve as barometers for a candidate’s grassroots support.

And the correlation between politicians with fervent beliefs and small-dollar givers lies at the heart of an ongoing debate about the role and significance of modest contributions from the masses in a political age often dominated by sizable contributions from a wealthy few.

Do passionate defenders of ideological views attract small-dollar donors? Do small-dollar givers push politicians to the partisan extremes? And are small-dollar donors ideologically dissimilar from the average voter or their large-dollar counterparts?

During the 2012 election cycle, Tea Party Caucus founder Rep. Michele Bachmann, R-Minn., collected both more cash and a larger portion of her congressional campaign war chest from small-dollar contributions than any other incumbent politician at the federal level, according to the Center for Public Integrity’s analysis.

Donations of $200 or less, the threshold at which the Federal Election Commission requires itemization in campaign finance reports, amounted to more than $9.5 million — or 62 percent of the $15 million Bachmann raised for her 2012 re-election efforts.

This morning, Bachmann — who was facing multiple campaign finance investigations and a tough re-election bid — announced that she would not seek a fifth term in Congress.

Meanwhile, Sen. Bernie Sanders of Vermont, a left-leaning independent who caucuses with Senate Democrats, collected nearly $3.7 million — or 59 percent of his total $6.3 million — from such small-dollar giving. That was enough to rank the self-described socialist as second among incumbents, in terms of percentage of receipts from modest donors.

Attribute this success to the senator’s “career standing up to the most powerful special interests in the country and vigorously representing the needs of the elderly, the children, the sick and low-income Americans,” said Ben Eisenberg, the finance director of Sanders’ campaign.

“People in Vermont and across the country appreciate Bernie’s efforts,” Eisenberg added.

Former Rep. Allen West, R-Fla., another darling of tea party activists, ranked third. Ahead of his narrow defeat by Democrat Patrick Murphy in November, West collected $9.3 million in contributions of $200 or less — nearly half of the $19 million he raised.

Representatives for Bachmann and West did not respond to requests for comment.

Tapping the grassroots

Among non-incumbents who raised at least six figures, Republican congressional challengers John Dennis of California, Anna Little of New Jersey, Samuel “Joe the Plumber” Wurzelbacher of Ohio, Karen Harrington of Florida and Chris Fields of Minnesota placed as the top five beneficiaries — percentage-wise — of small-dollar support, according to the Center for Public Integrity’s analysis.

Each reported raising at least half of their funds as coming from contributions of $200 or less.

Money from grassroots supporters doesn’t always translate into electoral success. Incumbency still remains a most powerful force.

Dennis, for instance, raised 84 percent of his campaign cash from low-dollar gifts and received just 15 percent of the vote in his longshot bid to unseat Democratic House Minority Leader Nancy Pelosi, D-Calif.

All the while, Democratic lawmakers, including Sen. Sherrod Brown of Ohio and Reps. Carolyn McCarthy of New York, Raul Grijalva of Arizona and Keith Ellison of Minnesota, also ranked highly among incumbents who raised a lofty portion of their campaign war chest from small-dollar contributions.

And Florida Democrat Alan Grayson pulled in $2.5 million from small-dollar gifts — more than any other House candidate — ahead of his victory last November. That sum accounted for roughly 47 percent of the $5.4 million he raised overall in the race.

Grijalva and Ellison are the co-chairmen of the Progressive Caucus.

In a telephone interview, Grijalva told the Center that “grassroots” donors help “shift the balance of power.”

“The lady that sends me 10 bucks out of her Social Security check for six months is at the table when I’m making a decision as much as a captain of industry is sitting at the table trying to affect the decision,” he said. “It equalizes things.”

Peggy May, McCarthy’s campaign treasurer, noted that the New York congresswoman “wants to foster an environment in which everyone can get involved and make a difference, no matter how small.”

McCarthy, whose husband was killed in a 1993 mass shooting on the Long Island Railroad, “is a singular figure in Congress when it comes to fighting to reduce gun violence,” May said. “She fights for this issue even when it's not in the headlines and her supporters recognize that.”

Overall, the median portion of campaign funds raised by an incumbent House member during the 2012 election cycle from small-dollar gifts was about 4 percent, and the median portion raised by an incumbent senator was about 11 percent.

Celebrity breeds small-donor success

Recently, Washington Post policy wonk blogger Ezra Klein argued that “small money is polarizing.”

“Small money will turn on you if you dare cut a deal with the other side,” Klein wrote. “Small money attacks the bipartisanship that, for better and worse, is required for the system to function.”

Michael Malbin, executive director of the nonpartisan Campaign Finance Institute, and Norm Ornstein, a scholar at the American Enterprise Institute, disagree.

When you raise political money, Ornstein told the Center for Public Integrity, you “naturally” attract support first from partisans. But you can change the system to expand the donor base “beyond those who are the most intense.”

Added Malbin: “Small-donor fundraising presumes that you will be known by a large enough number of people to get a decent response.”

Politicians typically achieve small-donor fundraising success because they have “gotten some celebrity either because they are leaders or because of statements they’ve made,” Malbin continued.

Both Malbin and Ornstein contend that small-dollar donors are a counterweight against corruption.

Ornstein says that under the current system, where most politicians chase large-dollar contributions, the potential for corruption is two-fold: Lawmakers can “shakedown” donors, and donors can make “explicit threats” to members of Congress.

Small-dollar donors, Ornstein said, “just don’t provide those kinds of problems.”

Super PAC to tout North Carolina House speaker

2013-05-28T12:11:59-04:00

A new super PAC called "Grow NC Strong" has formed to promote North Carolina House Speaker Thom Tillis, a Republican who is considering a U.S. Senate bid in what could rank among the nation's more competitive races in 2014.

Grow NC Strong registered with the Federal Election Commission on Thursday, new documents show.

The paperwork identifies Michael Luethy as the group's executive director and Cindy Marrelli Watko as its treasurer.

Luethy is a political consultant who previously worked for the National Republican Congressional Committee and North Carolina Republican Party, according to his official online biography.

Marrelli Watko is a former business executive who worked for companies including Triology, Electrolux, Accenture and IBM. She is also a real estate broker, a board member of the Christian nonprofit Project Mercy, which combats poverty in Ethiopia, and an activist with the Republican Party focused on "expanding the role of women in government and leadership," according to her LinkedIn profile.

Tillis, a former IBM executive, was first elected to the North Carolina legislature in 2006.

His top campaign contributors over the years include the North Carolina Association of Realtors, Duke Energy, Bank of America and AT&T, according to the nonpartisan National Institute on Money in State Politics.

Incumbent Democrat Kay Hagan is seeking re-election in 2014, and several Republicans other than Tillis, including Reps. Virginia Foxx and Renee Ellmers and North Carolina Senate President Pro Tem Phil Berger, are reportedly considering getting into the race.

Hagan's campaign had more than $2.7 million in the bank at the end of March, according to federal records.

Vitter's hunt for super PAC cash limited — but watch out, alligators

2013-05-24T15:48:38-04:00

During his time at an upcoming “Louisiana Bayou Weekend” super PAC fundraiser, Sen. David Vitter, R-La., will be able to ask attendees how they like the Cajun cooking. And he’s free to inquire whether they bagged a gator during the weekend’s planned alligator hunt.

But he won’t be able to ask them to contribute more than $5,000 to its sponsor, the Fund for Louisiana’s Future, a super PAC created to support Vitter.

That’s because federal law prohibits federal candidates from officeholders from soliciting contributions in excess of $5,000 per year for super PACs, even though the groups may accept contributions of unlimited size.

It also doesn't matter "whether the funds are used for state or federal election work,” attorney Paul S. Ryan of the Campaign Legal Center told the Center for Public Integrity.

“The donor can always give as much as they choose to,” added Joe Birkenstock, an attorney at Caplin & Drysdale in Washington, D.C. “It’s a limit on what can be asked.”

Vitter, who is mulling a run for governor, will appear at the September fundraiser as a “special guest,” according to an invitation obtained by Politico.

The Fund for Louisiana’s Future is also registered with the state of Louisiana, which caps contributions to all political action committees at $100,000 per election cycle.

Since the advent of super PACs during the 2010 election cycle, federal politicians on both sides of the aisle have solicited funds for the unlimited-spending groups, including Senate Majority Leader Harry Reid, D-Nev., and GOP presidential nominee Mitt Romney.

Neither Fund for Louisiana’s Future treasurer, Charlies Spies, nor a spokesman for Vitter immediately responded to requests for comment.

Conservative nonprofit seeks to oust IRS official

2013-05-24T13:53:42-04:00

The American Future Fund, a Republican-aligned “social welfare” nonprofit, is circulating a petition to “fire Lois Lerner,” the Internal Revenue Service official at the center of the ongoing political storm about the agency’s targeting of conservative groups seeking tax-exempt status.

“Did you see IRS official Lois Lerner’s stunning and insulting actions before a Congressional committee yesterday where she made a personal statement of innocence, then plead the Fifth and left?” American Future Fund founder Nick Ryan wrote in an email to supporters Friday obtained by the Center for Public Integrity.

“Does it leave you seeing red that Ms. Lerner refused to fully and honestly answer questions before the Committee about who knew what and when?” Ryan continued. “Then let’s do something about it.”

The American Future Fund itself has frequently been singled out by campaign finance reform groups, who have accused the nonprofit of masquerading under Section 501(c)(4) of the U.S. tax code when it ought to be registered as a political committee — and subject to donor disclosure rules.

During the 2012 election season, the American Future Fund spent more than $29 million on political advertisements, as the Center for Public Integrity previously reported.

As a 501(c)(4) nonprofit, it is allowed to make election-related expenditures, so long as politics are not its “primary” purpose.

Little is known about the donors to the American Future Fund. Between 2009 and 2011, 51 percent of the money the group raised came from another nonprofit — the Arizona-based Center to Protect Patient Rights, which has no website and lists its address in government filings as a post office box in Phoenix.

The American Future Fund was awarded tax-exempt status under Section 501(c)(4) in October 2008, IRS records show.

Lerner, the director of the IRS exempt division, was put on administrative leave from the IRS on Thursday.

Pro-Rand Paul super PAC's name may violate law

2013-06-18T16:44:51-04:00

Supporters of Republican Sen. Rand Paul, R-Ky., have launched “Rand PAC 2016.” But because the super PAC uses the potential presidential candidate’s first name, this action may violate federal law.

Three Hillary Clinton-themed super PACs established earlier this year could also find themselves in the same situation. Since, however, the former secretary of state is not officially a candidate for president or any other federal office, they are on safe ground — for now anyway.

Paul, on the other hand, has raised more than $600,000 for his 2016 re-election to the U.S. Senate, including $457,000 during the first quarter of 2013, according to Federal Election Commission filings.

Federal law, in most cases, only permits political committees authorized by a candidate to use that candidate’s name — which super PACs, by definition, are not.

The regulations, though, are unclear about whether the use of a partial name would trigger a change.

This would be “a good area for the FEC to clarify its own rules,” Paul S. Ryan, an attorney at the nonpartisan Campaign Legal Center, told the Center for Public Integrity.

An FEC spokesman directed questions to the agency’s chairman and vice chairman, who could not immediately be reached for comment.

The FEC typically sends a letter to a super PAC if it uses a candidate’s name. For example, during the 2012 GOP presidential primaries, the super PAC “Americans for Rick Perry” ran afoul of the rule and changed its name to “Restoring Prosperity Fund.”

Brandon Edwards — the 27-year-old, self-described libertarian from California who is the chairman of the newly created Rand PAC 2016 — said that if his group were asked to change its name by the FEC, “that would be no problem.”

Edwards said his group does not want to be seen as “leaching off" Paul's name.

“That’s definitely not the goal of this,” he added. “The goal is to become active with the community, find other like-minded people and help spread the message of liberty.”

Another pro-Paul group may face a similar predicament. It christened itself the "Stand with Rand PAC" when it registered in March as a hybrid super PAC.

A hybrid super PAC can operate one bank account fueled by limited contributions to dole out money to candidates — plus a second account funded by unlimited donations that are used to produce political advertisements.

Bill Willenbrock, Stand with Rand PAC's treasurer, said his group had not been asked to change its name by the FEC, adding that he was "not aware that Ayn Rand was running for office," making reference to the deceased author, a libertarian icon.

The super PAC’s website features a photo of the Kentucky senator above the assertion that it exists to “support candidates like Rand Paul who stand up for the Constitution and, more specifically, the Bill of Rights.”

In a previous interview with the Center for Public Integrity, Willenbrock said his group planned to support Paul as well as "other candidates who stand for liberty," such as Sens. Ted Cruz, R-Texas, and Mike Lee, R-Utah.

In January, several notable Clinton supporters formed a super PAC called “Ready for Hillary PAC,” as the Center for Public Integrity previously reported.

The super PAC has not yet been required to report any fundraising to the FEC, but Democratic heavyweights such as strategist James Carville and former Michigan Gov. Jennifer Granholm have already made pitches for the group.

“We are aware of this federal regulation,” said Jim Lamb, Ready for Hillary's general counsel. "If Hillary decides to run and becomes a candidate, we will continue to be in compliance with this regulation."

Clinton supporters have also created an Iowa-based group called "Hillary Clinton Super PAC" and a California-based super PAC called "Hillary FTW," an acronym standing for "for the win."

Further confusing the issue, political committees designed to specifically oppose a candidate are granted an exemption from the rules governing names.

Case in point: the “Stop Hillary PAC” registered with the FEC last week as a hybrid super PAC. Similarly, the “Retire Pryor” super PAC has spent about $10,000 opposing the re-election of incumbent Sen. Mark Pryor, D-Ark, who will face voters in 2014.

The only other exception to the naming restriction is for groups that seek to “draft” a candidate to run for office. These groups must also “clearly indicate” that they are “a draft committee,” according to federal law.

Like super PACs, draft committees need not abide by the strict contribution limits faced by candidate’s own committees.

IRS rarely denies 'social welfare' applications

2013-05-20T17:37:11-04:00

During its past four fiscal years, the Internal Revenue Service has formally denied the applications of just 60 organizations seeking recognition under Section 501(c)(4) of the U.S. tax code as “social welfare” groups.

In the same period, the agency processed 8,214 applications and approved 6,837 of them — about 83 percent, according to a Center for Public Integrity analysis of IRS data.

Sometimes applications were neither approved nor denied, meaning groups could still be awaiting recognition of tax-exempt status or still be providing the IRS with additional information. They may also have withdrawn their applications.

The IRS's approval processes have come under fire following an inspector general report that found IRS employees used “inappropriate criteria” to discern which organizations’ applications warranted additional scrutiny.

The IRS’s 2012 fiscal year, which covered the period between Oct. 1, 2011, and Sept. 30, 2012, saw a surge of new applications under Section 501(c)(4). During that period, 2,774 groups sought recognition as “social welfare” nonprofits, as the Center for Public Integrity has previously reported.

That represented an increase of more than 56 percent from fiscal year 2011 — and an increase of nearly 86 percent from fiscal year 2008.

The IRS processed 23,722 applications for 501(c)(4) nonprofit status between fiscal years 2001 and 2012, records indicate.

The agency approved roughly 77 percent of those, while rejecting less than three-tenths of one percent: 66 denials versus 18,214 approvals, albeit in fiscal year 2008 the IRS did not report how many groups it denied “to avoid disclosure of specific taxpayer data.”

Before the House Ways and Means Committee on Friday, Steven Miller, who served as the agency’s commissioner until he resigned last week, testified that IRS did not have “sufficient personnel” to process all of the applications its tax-exempt unit has received.

Both the Senate Finance Committee and the House Oversight and Government Reform Committee are planning hearings on the topic this week.

Funds from Adelson-backed super PAC boost Georgia nonprofit

Georgia,United States — 2013-05-20T01:24:29-04:00

One of the largest super PACs active in Virginia’s high-profile U.S. Senate race last year has ceased operations and transferred its leftover funds to a Georgia-based nonprofit — though what the group plans to do with the money is unclear.

Rise and Shine America, Inc., the Georgia nonprofit, is organized as a “social welfare” organization under section 501(c)(4) of the U.S. tax code. It received nearly $42,000 on April 30 from Independence Virginia PAC, according to records filed with the Federal Election Commission.

Ahead of the 2012 election, Independence Virginia PAC spent approximately $5 million attempting to boost Republican George Allen in his unsuccessful U.S. Senate bid against Democrat Tim Kaine.

Casino magnate Sheldon Adelson accounted for $4 million of the group’s $5.2 million in receipts. Adelson was the top donor to super PACs during the 2012 election cycle, when he, along with his relatives, contributed more than $93 million to GOP-aligned super PACs.

Independence Virginia PAC’s donation to Rise and Shine America was first reported by Roll Call’s Kent Cooper, who posited that the funds might be used in connection with the state's upcoming U.S. Senate election.

However, Doug Chalmers, the attorney for Rise and Shine America, Inc., told the Center for Public Integrity that the nonprofit “does not intend to be involved in the Georgia U.S. Senate race.”

“We're not sure how that story got started, but it's pure speculation and incorrect,” he wrote in an email to the Center for Public Integrity.

Chalmers declined to specify how the money would be put to use.

Incumbent Republican Sen. Saxby Chambliss announced that he will not seek re-election, sparking a flurry of interest from Georgia Republicans who are eyeing the seat including three sitting U.S. House members, Reps. Paul Broun, Phil Gingrey and Jack Kingston.

In filings with the Internal Revenue Service, Rise and Shine America describes its mission as “protecting conservative values” such as “limited government” and “fiscal responsibility.”

Harry “Chip” Lake III, a former aide to Rep. Lynn Westmoreland, R-Ga., serves as Rise and Shine America’s chief executive officer, chief financial officer and secretary, according to business records filed with the state of Georgia.

The super PAC’s five-figure donation nearly equals the nonprofit’s entire budget during its first year of existence.

Rise and Shine America, which was formed in July 2011, raised $50,000 during its first year, according to a new tax filing obtained by the Center for Public Integrity.

As of June 30, 2012, at the end of its first fiscal year, the nonprofit listed assets of $340 with liabilities of $2,000 — leaving it $1,660 in the red.

There is at least one definitive link between Rise and Shine America and Independence Virginia PAC: Republican political consultant Paul Bennecke.

Bennecke was the treasurer of the Virginia-based super PAC. He is also listed as a director of Rise and Shine America on its IRS annual report.

Bennecke, a former executive director of Georgia’s Republican Party and former political director of the Republican Governors Association, could not be reached for comment.

Do nonprofits' names imply political activity?

2013-05-20T15:52:05-04:00

Trevor Potter — a Republican lawyer and president of the Campaign Legal Center, which advocates for stronger campaign finance regulations — says that the Internal Revenue Service is right to be on the lookout for organizations with a “significant amount of political activity.”

“What they are trying to do is identify groups that intend to be politically active, which is the appropriate thing for them to do,” he told the Center for Public Integrity, adding an important caveat.

“It seems to me, personally, that using the name is a pretty weak indicia,” he continued.

There are about 90,000 organizations recognized by the IRS as "social welfare" nonprofits under Section 501(c)(4) of the U.S. tax code.

Most don't have politically charged names, but scores do.

For instance, there are 20 social welfare nonprofits with the word "Democrat" in their name, according to a Center for Public Integrity review of IRS data. Meanwhile, 18 social welfare nonprofits include the word "Republican" in theirs.

Twenty-one organizations use the word "conservative," while 31 use the word "progressive."

Sixty-nine social welfare nonprofits include the word "campaign" in their names. Just three use the word "politics."

Words such as "America" and "veterans" are far more commonly used by 501(c)(4) organizations, as our word cloud illustrates.

According to a recently released inspector general report, the buzzwords “tea party,” “patriot” and “9/12” were used by IRS employees to flag potentially political cases.

Only two social welfare nonprofits with any of those buzzwords in their names reported any political spending to the Federal Election Commission, as the Center for Public Integrity today reported. One was Republican-aligned and one was Democratic-aligned.

Methodological note: This graphic was constructed based on a Center for Public Integrity analysis of organizations listed in the IRS business master file that were recognized in 2012, omitting some common, generic words such as "association," "club" and "inc."

'Tea party' nonprofits rarely endorsed political candidates

2013-05-20T01:56:51-04:00

Tea party groups and other conservative nonprofits at the heart of a scandal rocking the Internal Revenue Service have, of late, largely avoided electoral politics, according to a Center for Public Integrity review of Federal Election Commission filings.

About five dozen groups with the buzzwords “tea party,” “patriot” and “9/12” in their names have been officially recognized by the IRS as "social welfare" nonprofits under Section 501(c)(4) of U.S. tax code. There are about 90,000 such organizations.

But only two of the buzzword groups reported overtly advocating for or against political candidates during 2012, or even mentioning political candidates in broadcast advertisements immediately before primary or general elections.

And one of those is, in fact, unabashedly liberal.

Both groups, which use a version of "patriot" in their names, offer contrasting perspectives into the nebulous world of politically active nonprofits.

One of these is Patriotic Veterans, Inc, a Chicago-based organization launched in 2008. Conservative political consultant Paul Caprio serves as its president.

Patriotic Veterans told the FEC that it spent $86,700 on radio ads that mentioned Sen. Bob Casey, D-Pa., and Republican House candidate Adam Kinzinger of Illinois ahead of during the 2012 election.

IRS records show automated phone calls have also been a regular expense of the group.

In 2004, Caprio worked with John O’Neill, co-author of the controversial book Unfit for Command, to design a voter-contact program aimed at veterans highlighting Democratic presidential nominee John Kerry’s “true record of service in Vietnam,” according to Caprio’s online biography.

An archived version of the group’s now-defunct website says its mission is “to inform voters of the positions taken by candidates and office holders on issues of interest to veterans.”

Only one other 501(c)(4) “patriot”-named nonprofit reported spending to the FEC during the 2012 election cycle: a liberal-aligned group called Patriot Majority USA.

Ahead of the 2012 election, Patriot Majority USA reported spending about $7.5 million to the FEC on political advertisements, most of them highly critical of Republicans.

Based in Washington, D.C., Patriot Majority USA was established in March 2011, after being spun-off from another operation.

The nonprofit is headed by strategist Craig Varoga, who has advised numerous Democratic candidates, including Maryland Gov. Martin O’Malley and Kentucky Gov. Steve Beshear. In 2010, political committees that were part of the Patriot Majority network spent millions on behalf of Senate Majority Leader Harry Reid, D-Nev., who won a contentious re-election battle that year.

A 2011 filing with the IRS describes the nonprofit’s primary purpose as seeking to “encourage a discussion of economic issues in the United States in order to make America stronger and promote our country’s future economic prosperity.”

When it applied for tax-exempt status, the group told the IRS that its political spending would not exceed 40 percent of its annual budget, according to documents obtained by the Center for Responsive Politics.

Patriot Majority USA has never publicly reported any of its funders.

When the FEC asked about the lack of information about donors, Patriot Majority USA’s counsel Ezra Reese said that the group, as a matter of policy, “does not accept contributions earmarked for a specific political purpose.”

Federal law only requires nonprofit groups to disclose the names of donors who earmark contributions for political advertisements — something donors rarely do.

Meanwhile, political committees — including super PACs, which, like nonprofits, are allowed to accept donations of unlimited size — are required to reveal all donors who give more than $200.

Neither Varoga nor Caprio responded to requests for comment.

Faced with an onslaught of new applications by organizations seeking tax-exempt status under Section 501(c)(4) of the U.S. tax code, IRS employees in 2010 developed a shorthand for cases they thought might merit additional scrutiny.

If words such as appeared in groups’ names, applications were flagged as potential political cases, according to a report released Tuesday by the Treasury Inspector General for Tax Administration.

The rules for who can fund social welfare nonprofits’ political advocacy have been loosened in the wake of the U.S. Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling.

While 501(c)(4) nonprofits cannot primarily be in the business of influencing elections, they are legally allowed to call for the election or defeat of candidates. When they do, they must disclose their expenditures to the FEC — just as individuals, labor unions, business associations and corporations do.

They must also report expenditures related to ads that mention politicians shortly before an election, even if they fall short of explicitly advocating for their support or defeat.

Social welfare nonprofits — such as Crossroads Grassroots Policy Strategies, which was co-founded by Republican strategist Karl Rove — spent hundreds of millions of dollars ahead of the 2012 election.

The inspector general’s report concluded that despite the use of “inappropriate criteria,” the IRS was “not politically biased” in its assessment of nonprofits’ applications.

In recent days, the agency’s actions have received bipartisan condemnation, and IRS Acting Commissioner Steven Miller resigned Wednesday.

Ben Wieder contributed to this report.

Judicial candidate blames mystery nonprofit's attacks for defeat

2013-05-16T16:20:38-04:00

When Ed Sheehy looked at his mail one day last fall, he was startled to see his face staring back at him, posed alongside the notorious “Christmas Day Killer.” Sheehy, as a public defender, had represented the man a year earlier. Now Sheehy was running for a seat on the Montana Supreme Court and someone was using the double-murder to accuse him of being soft on crime.

“I was furious,” the 60-year-old Sheehy, who was born in Butte, Mont., and now resides in Missoula, told the Center for Public Integrity. “It was misrepresenting what I did and what I do as a lawyer.”

So who was behind the attack?

The mailer showed only that it was paid for by the “Montana Growth Network,” a “social welfare” nonprofit, registered under Section 501(c)(4) of the U.S. tax code. Montana election records revealed next to nothing about the organization, which, because of its tax status, is not required to disclose its donors. The nonprofit’s website says its goal is to make Montana “more business friendly.”

Despite finishing on top in the summer’s primary election, Sheehy lost in November.

Mystery mailers

He blames the mailers and similarly themed radio ads paid for by the group for his defeat, and he is angry that it was not required to report the full extent of its spending — much less the names of those who bankrolled it.

Montana, in fact, is one of 35 states where disclosure laws for independent groups like the Montana Growth Network are less stringent than what federal election law requires, according to a new analysis by the National Institute on Money in State Politics.

Sheehy, the nephew of a former Montana Supreme Court justice, first faced off against attorney Elizabeth Best and Laurie McKinnon, a district judge, in a three-way, nonpartisan primary in June. The top two vote-getters advanced to the general election in November.

Ahead of the primary, the Montana Growth Network endorsed McKinnon and touted her in a mass mailing as “fair,” “honest,” “constitutional” and “the only nonpartisan choice for Supreme Court.”

The group’s mailers also focused on Sheehy’s work defending a murderer and criticized Best for pursuing a lawsuit to “seize control of the state’s atmosphere … to stop global warming.”

Sheehy, who finished first with 34.3 percent of the vote, spent $32,000 during the primary, and McKinnon, who finished second with 33.6 percent of the vote, spent about $30,000, records show. Best came in at third with 32.1 percent.

Best raised more than the other two candidates combined — $128,000, which included roughly $20,000 of her own money. She was the only candidate to advertise on television.

The Montana Growth Network spent roughly $42,000 during the primary election — more than either Sheehy or McKinnon’s own campaigns.

Outsider spends big

Best told the Center for Public Integrity that she was “stunned” by the result.

“Hearing from the candidates doesn’t matter anymore,” she said, adding that what matters is who has well-financed outside supporters to “cast candidates as something they aren’t and to tip the scales.”

McKinnon, Best said, was “running as a partisan with unlimited backing.”

The amount spent by the Montana Growth Network in the primary was required by state law to be disclosed because the mailings urged voters to support or oppose a candidate — a line the nonprofit says it didn’t cross with its subsequent activities, whose costs it did not disclose.

Ahead of the November election, one direct mail piece from the Montana Growth Network argued that under Sheehy, justice would be “beholden to a political party,” based on Sheehy’s past financial support of Democratic candidates.

Additionally, both mail and radio advertisements said that Sheehy had an “activist agenda” for his defense of Tyler Michael Miller, the so-called “Christmas Day Killer” who murdered his girlfriend and her 15-year-old daughter “in cold blood” in 2010.

While defending Miller, Sheehy had unsuccessfully sought for Montana’s death penalty process to be ruled unconstitutional because a single judge, not a jury, is allowed to assess whether “mitigating factors” exist that might rule out a death sentence.

Sheehy says he was simply “doing his job.” Miller is currently serving two life sentences after ultimately pleading guilty.

Ads tread fine line

Instead of urging people to vote against Sheehy or support McKinnon, the ads advised voters to “contact Ed Sheehy and tell him that you want an impartial Supreme Court” and to sign an online petition.

How much was spent on these advertisements is not public.

Montana media outlets reported on the anti-Sheehy radio ads, and Sheehy called on McKinnon to denounce them, which she did.

“Negative advertising has no place in a nonpartisan race,” McKinnon said in a press release at the time. “I ask for your vote based on who I am, not on negative portrayals of my opponent.”

On Election Day, McKinnon bested Sheehy by 12 percentage points.

She had also been endorsed by the Montana Chamber of Commerce and spent about $35,000 on the general election campaign. Sheehy, who had been endorsed by the Montana AFL-CIO and state’s teachers’ union, spent roughly $44,000.

Being painted as an “activist” by the Montana Growth Network, Sheehy said, was insurmountable.

“In judicial elections, that does you in,” he said.

University of Montana political science professor Jim Lopach said he was surprised by the election results.

Name didn't help

“It’s amazing that Sheehy didn’t win with name recognition he had," Lopach said, adding that McKinnon came across as the "more conservative" candidate.

One fact that is known about the Montana Growth Network is the name of its founder and treasurer — Republican state Sen. Jason Priest, who donated the legal maximum of $620 to McKinnon’s campaign.

McKinnon declined to be interviewed for this story. Priest told the Center for Public Integrity that Best and Sheehy “disqualified themselves” during the race.

“The voters made their own decision based on the information they had,” Priest said. “We told voters that you’re better off with a nonpartisan court.”

Priest said the Montana Growth Network didn’t report the spending to the state because it was “issue advocacy,” which is not required to be disclosed.

In the months since the election, the Montana Growth Network has continued to produce issue advertisements, including mailers that encouraged Montana lawmakers to reject the expansion of Medicaid coverage called for under the health care reform law signed by President Barack Obama.

Jim Murry, the Montana Political Practices Commissioner until he resigned earlier this year, told the Center for Public Integrity that “voters should be angry and upset” about the lack of transparency at the state level regarding political ads.

In the wake of the U.S. Supreme Court’s Citizens United v. Federal Election Commission decision in 2010, which lifted a ban on corporate spending on political ads that call for the election or defeat of federal candidates, many lawmakers have attempted to update regulations at the state level.

During its most recent legislative session, a bipartisan group of Montana lawmakers pushed for new campaign finance rules that would have required disclosure of “electioneering communications” — defined as ads run within 90 days of an election that show or mention candidates without explicitly advocating for their election or defeat.

The Montana state Senate passed the bill in March on a 29-21 vote, but it died in committee in the Montana House of Representatives. A motion in April to bring it to the House floor without committee approval received majority support but fell six votes short of the three-fifths required.

Secret spending in judicial elections concerns Adam Skaggs, senior counsel at the New York-based Brennan Center for Justice, which advocates for fair and impartial courts.

“There are real concerns that judges will be partial to the individuals or the interest groups that are responsible for putting them on the bench,” he said. “The power of the judiciary depends on its reputation.”

For more information about money in state politics, visit the National Institute on Money in State Politics online at www.followthemoney.org.

IRS employees back Obama, Democrats

2013-05-20T01:56:07-04:00

President Barack Obama collected more than $110,000 from employees of the Internal Revenue Service during his 2008 and 2012 campaigns — significantly more money than any other contemporary political candidate, according to a Center for Public Integrity analysis of Federal Election Commission filings maintained by the Center for Responsive Politics.

The donations were split roughly evenly between Obama's two presidential bids.

Ahead of the 2012 election, IRS employees collectively gave Republican presidential candidate Mitt Romney about $25,000 — less than half the amount received by Obama. For his part, Sen. John McCain, R-Ariz., the GOP's presidential nominee in 2008, collected only about $6,000 from IRS employees.

The IRS has become the center of attention following an apology Friday by Lois Lerner, director of the agency’s division that oversees tax-exempt organizations, for what she acknowledged was "inappropriate" targeting of conservative nonprofits for additional scrutiny since 2010. Obama himself said on Monday that offenders in the agency needed to be held "fully accountable."

On Tuesday, a report from the Treasury Inspector General for Tax Administration said the IRS used "inappropriate criteria" when reviewing organizations seeking tax-exemption.

During the past two decades, individual employees of the agency have collectively increased their political giving, which has overwhelming benefited Democrats and liberal-leaning organizations.

Overall, rank-and-file IRS employees donated more than $840,000 to federal candidates and committees from 1989 to 2012, according to the Center's analysis. Democrats and liberal-leaning organizations received about two-thirds of this sum.

While GOP-aligned groups and candidates received the remainder, during some election cycles, such as the 2002 midterms and the 2010 midterms, Republicans and conservative-leaning organizations achieved near-parity.

The Democrats' 2004 presidential nominee, John Kerry, who is now serving as secretary of state, ranked second behind Obama and ahead of Romney among candidates to benefit from the financial largesse of IRS employees, collecting about $31,000 during his failed presidential bid.

The top organizational beneficiary of money from IRS employees is the National Treasury Employees Union, which accounted for more than $102,000 in donations. The labor union has historically supported Democratic candidates, according to the Center for Responsive Politics.

Both the Democratic National Committee and Republican National Committee have also received notable support from IRS employees, with each collecting about $45,000 over the years.

All federal employees, including those who work for the IRS, are bound by the Hatch Act, a law passed in 1939 with the intent of curbing partisan power abuses by civil servants.

The Hatch Act generally bans federal employees from engaging in political activity while on the job, including soliciting funds for candidates. But political activities during personal time that do not use government resources, such as donating or volunteering for a campaign, are typically allowed.

Federal campaign finance law requires all individuals who donate more than $200 to a political group or candidate to list their employer and occupation. These filings may understate the donations of individuals who give less than the reporting threshold or who do not clearly identify the IRS as their employer.

Nonprofits organized under Section 501(c)(4) of the U.S. tax code have flourished in the wake of the U.S. Supreme Court’s Citizens United v. Federal Election Commission decision in 2010, which lifted restrictions on the types of political advertising in which these groups could engage.

During the IRS’s 2012 fiscal year alone, nearly 2,800 groups sought tax-exemption under Section 501(c)(4), as the Center for Public Integrity previously reported.

This tax status permits organizations to pursue a mission of promoting "social welfare" and allows them to keep their funders secret. Groups with the primary purpose of engaging in electoral advocacy must disclosure their donors.

Reporter Ben Wieder contributed to this report.

Negative ad blitz can't stop Mark Sanford in S.C.

South Carolina,United States — 2013-05-09T17:16:01-04:00

In a district much more Republican than average, former South Carolina Gov. Mark Sanford tonight survived an onslaught from allies of Democrat Elizabeth Colbert Busch, the sister of comedian Stephen Colbert, to win a seat in Congress.

Supporters of Colbert Busch spent nearly $1 million on advertisements criticizing the GOP's scandal-singed Sanford ahead of the special election in South Carolina’s 1st Congressional District, according to a Center for Public Integrity analysis of Federal Election Commission filings. Most of these groups were based in Washington, D.C.

But during the election's final week, Sanford’s allies more than achieved spending parity: They reported making $157,000 in independent expenditures that either advocated for his election or against that of Colbert Busch, according to a Center for Public Integrity analysis of FEC records.

Colbert Busch’s allies reported spending about $152,000 on such independent expenditures during the race's final week.

That 11th-hour rush of cash helped reverse what had, to that point, proven to be anemic outside support for Sanford. Super PACs, political action committees and nonprofit groups overall spent less than $200,000 on ads that expressly advocated for Sanford's election or Colbert Busch's defeat.

Sanford-aligned groups included FreedomWorks, Independent Women’s Voice and the National Right to Life Committee.

Some pro-Sanford ads made the argument that a vote for Colbert Busch equated to a "vote for Nancy Pelosi," the highest ranking House Democrat who hails from San Francisco.

The Democratic Congressional Campaign Committee and the deep-pocketed super PAC known as House Majority PAC, which backs House Democrats, accounted for the bulk of spending on Colbert Busch's behalf.

The DCCC alone reported spending about $460,000 on anti-Sanford independent expenditures while House Majority PAC spent about $430,000 on negative ads, federal disclosures indicate.

The DCCC's Republican counterpart, the National Republican Congressional Committee, decided against supporting Sanford — he cheated on his now-former wife while serving as governor and this week faces charges he trespassed in her house — with financial resources.

Colbert Busch's campaign committee itself raised more than $1.1 million as April 17, according to federal campaign finance records.

Sanford, for his part, had raised about $788,000 as of April 17, including money he spent winning a crowded GOP primary and subsequent primary runoff.

Both those figures will assuredly increase when the campaigns release final financial reports next month.

The vacancy in South Carolina’s 1st Congressional District arose when Republican Rep. Tim Scott was tapped by Gov. Nikki Haley to fill Republican Sen. Jim DeMint’s seat after he resigned to lead the conservative Heritage Foundation think tank in Washington, D.C.

Sanford first served in Congress from 1995 to 2001.