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Nancy Suhadolnik of Strongsville, Ohio, votes in early voting Oct. 4, 2011, in Cleveland. Nonprofit groups run by the Washington, D.C.,-based governors associations poured money into several states in 2011, including a ballot referendum on union rights in Ohio. Tony Dejak/AP Al Behrman/AP

Governors’ groups rely increasingly on 'dark money' affiliates

By Paul Abowd

The Democratic and Republican governors’ associations are increasingly relying on nonprofit affiliates to get their candidates elected and influence ballot initiatives, a move that allows them to avoid disclosing the identity of their donors.

The Washington, D.C.,-based Republican Governors Association and Democratic Governors Association are the most prolific outside spending groups in state-level elections, but as so-called 527 political organizations, they are required to make their donors public.

Their nonprofit affiliates, however, are not.

The RGA’s Republican Governors Association Public Policy Committee nonprofit spent $1.3 million between 2005 and 2009. During 2011, spending spiked to nearly $10 million, Internal Revenue Service filings indicate.

The DGA, meanwhile, established a nonprofit called America Works USA in 2011, which raised and spent $4.4 million.

The governors associations still spend far more through their 527 groups. The DGA spent $49 million and the RGA spent $77 million during the 2012 election cycle.

But rising spending by the RGA and DGA’s nonprofits, which have funded state-level battles over union rights, supreme court seats, tax policy and national healthcare reform, has gone largely unnoticed — and is likely to increase this year and next when 38 governorships are up for election.

The increase, says RGA spokesman Michael Schrimpf, is because “the number of GOP governors has increased along with the importance of their role as policy leaders.”

The 2010 Citizens United Supreme Court decision allowed nonprofits to accept unlimited donations from corporations, unions and individuals and spend the money on advertising in an attempt to elect or defeat candidates.

As spending by nonprofits and super PACs has exploded in federal elections, the same trend can be seen at the state level, says Stetson University law professor Ciara Torres-Spelliscy.

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Judges often ignore trip disclosure rules

By Chris Young and John Dunbar

Publicly filed reports of privately funded trips and seminars made by federal judges are often difficult to find, incomplete or missing altogether, according to a Center for Public Integrity investigation.

In 2007, the organization that oversees the conduct of federal judges implemented an ethics policy requiring public disclosure of details about privately funded judicial education conferences.

Noting that judges may be “influenced inappropriately” by those who conduct the events, a panel of the Judicial Conference of the United States said the new disclosure requirements “should strengthen public and congressional confidence in federal judicial ethics.”

The Center collected disclosure information from 2008 through 2012. Many federal court websites are poorly designed and hard to navigate, making it difficult to find links to judges’ seminar-disclosure reports.

In some cases, links to reports were either broken or nonexistent. A handful of courts, including the U.S. Bankruptcy Court in Delaware, linked to a different set of disclosures. In Delaware’s case, it was the U.S. District Court in Northern Texas.

The Center’s analysis also showed apparent lapses in reporting by hosts and judges.

For example, in August 2011, the Foundation for Research on Economics and the Environment (FREE) hosted a five-day judicial conference at a ranch in Big Sky, Mont., entitled “Terrorism, Climate & Central Planning: Challenges to Liberty & the Rule of Law.”

FREE’s report indicated there was just one lecture: “Taking the Long View of Progress,” delivered by Judge Daniel Boggs of the 6th Circuit U.S. Court of Appeals. But a conference agenda posted on FREE’s website shows there were in fact 11 lectures at the event.

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Former Bolivian President Gonzalo Sanchez de Lozada delivers a 2002 speech at the Congress in La Paz, Bolivia. Pablo Aneli/AP

Judicial seminar backed by ex-president of Bolivia

By Michael Beckel and Chris Young

The list of corporate sponsors of expense-paid judicial education seminars hosted by George Mason University’s Law & Economics Center in years past includes the names of such blue-chip companies as AT&T Inc., the Coca-Cola Co., Exxon Mobil Corp., Pfizer, Inc. and Wal-Mart Stores, Inc.

But one name sticks out for its relative obscurity: Petromina LLC. While it turns out the company is little-known, its top manager is anything but.

Documents show that Petromina LLC is headed by Gonzalo Sánchez de Lozada, the former president of Bolivia, who fled to the United States nearly a decade ago amid major protests and accusations of human rights violations in his own country.

For years, Bolivia’s current government has unsuccessfully sought to extradite Sánchez de Lozada, also known by the nickname “Goni.”

Why a company headed by the former president of Bolivia would be interested in sponsoring expense-paid conferences for federal judges is unclear. Sánchez de Lozada, through attorney Ana Reyes of the Washington, D.C., firm Williams & Connolly, declined a request for an interview.

Sara Magner, the company's general counsel, told the Center for Public Integrity only that Petromina LLC decided to donate to the George Mason University think tank "as part of its charitable giving" after being "approached by an employee of George Mason to make the contributions."

Petromina LLC, which Magner described as a "family advisory firm," is headquartered in a non-descript office building barely five blocks from the White House. Sánchez de Lozada is listed as “manager” and the “sole member” of the company, which was established in Delaware in 2005, according to records.

The company’s purpose is to provide “management and administrative services” and to offer “stewardship services to other foreign affiliates,” according to paperwork filed with the D.C. city government.

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Tim Meko/For the Center for Public Integrity

Corporations, pro-business nonprofits foot bill for judicial seminars

By Chris Young, Reity O'Brien and Andrea Fuller

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.

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Barack Obama
President Barack Obama pauses as he speaks at the election night party at McCormick Place, Wednesday, Nov. 7, 2012, in Chicago. Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/Carolyn Kaster)

Obama bundlers closely tied to influence industry

By Michael Beckel

President Barack Obama prides himself on rejecting donations from registered lobbyists, but a newly released list of campaign fundraisers is peppered with leaders from companies and law firms that lobby the federal government.

New bundlers, whose names were released this week, include Anthony Welters, executive vice president of UnitedHealth Group, and Qualcomm co-founder and former chairman Irwin Jacobs and his wife Joan.

Each raised at least $500,000 for the Obama Victory Fund, a joint fundraising committee that includes Obama’s presidential campaign, the Democratic National Committee and party committees in several battleground states.

The exact amounts are unknown. The campaign only divulges bundlers’ fundraising activity in broad ranges, with a top category of “more than $500,000.”

Qualcomm has spent at least $6 million each year since 2007 on federally reportable lobbying efforts, according to the Center for Responsive Politics. UnitedHealth spent at least $2.5 million annually in the same period.

None of these individuals were bundlers for Obama during his 2008 presidential campaign, according to the Center for Responsive Politics. However, Welters’ wife, Beatrice, raised between $200,000 and $500,000 for Obama’s 2008 presidential campaign.

Bundlers are elite political fundraisers who turn to relatives, friends and business associates to raise large sums and deliver the funds in a “bundle” to the candidate. They are often given perks and special access — both on the campaign trail and once politicians are elected.

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Harold Simmons, owner of Contran Corp. and Valhi, Inc. YouTube

GOP super donor's foundation leans left

By Paul Abowd and Dave Levinthal

Republican mega-donor Harold Simmons considers President Barack Obama to be “the most dangerous man in America,” and in a bid to unseat him, fueled conservative political groups with tens of millions of dollars.

But the Dallas-based billionaire’s recent philanthropic giving has been anything but right-leaning, a Center for Public Integrity review of new Internal Revenue Service documents indicates.

The Harold Simmons Foundation in 2011 most notably contributed a combined $600,000 to an arch political foe of Republicans, Planned Parenthood, and its North Texas affiliate, IRS records show.

Simmons’ foundation also bolstered several other organizations rarely associated with political conservatives or partisan Republicans, including public television, the League of Women Voters and even a Washington, D.C.-based organization dedicated to curbing the influence of big money in elections.

The foundation’s 2011 funding came exclusively from the billionaire’s personal fortune and that of his holding company, Contran Corp. Together, they contributed more than $9.8 million in 2011 — the foundation’s only income aside from $5.6 million in investment and capital gains income. The foundation ended 2011 with nearly $52 million in reserve after distributing about $17.4 million during the year, IRS records show.

Simmons and his holding company, Contran Corp., provided major funding for Republican super PACs, including $23.5 million to Karl Rove’s American Crossroads. Simmons was second to casino magnate and fellow Republican-backing billionaire Sheldon Adelson among top donors to super PACs in the 2012 election.

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Donors use charity to push free-market policies in states

By Paul Abowd

In 2009, a network of online media outlets began popping up in state capitals across the nation, each covering the news from a clearly conservative point of view. What wasn’t so clear was how they were funded.

“The source is 100 percent anonymous,” said Michael Moroney, a spokesman for the Franklin Center for Government and Public Integrity, the think tank that created the outlets.

In fact, 95 percent of Franklin’s revenue in 2011 came from a charity called Donors Trust, according to Internal Revenue Service records.

Conservative foundations and individuals use Donors Trust to pass money to a vast network of think tanks and media outlets that push free-market ideology in the states — $86 million in 2011 alone. The arrangement obscures the identity of the donors wishing to keep their charitable giving private, especially “gifts funding sensitive or controversial issues,” according to the group’s website.

The $6.3 million donation to the Franklin Center was the second-largest gift made in 2011 by the group, a tax-exempt “public charity” that takes tax-deductible donations from donors “dedicated to the ideals of limited government, personal responsibility, and free enterprise,” according to its website.

Donors Trust includes 193 contributors, the majority of whom are individuals. “A lot of donors are flying totally under the radar,” says president and CEO Whitney Ball.

Consider the Source

A scene from the Americans for Job Security's "Darker Future" ad. Screengrab

Non-political nonprofit's spending spikes in election years

By Dave Levinthal

Pro-business powerhouse Americans for Job Security cannot, by federal law, make politics its primary purpose.

But as contentious federal elections and state-level ballot initiatives raged during 2012, the nonprofit organization’s income spiked at least tenfold compared to 2011, a non-election year, records show.

The cash windfall fueled tens of millions of dollars of overtly political spending, much of it in the form of relentless advertisements skewering President Barack Obama.

New IRS Form 990 filings show Americans for Job Security raised $2.5 million during fiscal year 2011 and carried just $727,000 in reserve through October 2011. IRS records for 2012 are not available and likely won’t be until the year’s end.

But Federal Election Commission filings show in 2012 the group spent $15.2 million to attack Obama and another $650,000 to oppose Eric Hovde, a U.S. Senate candidate in Wisconsin, during a Republican primary.

The organization, which was founded and run by a Republican political operative, also spent $11 million to help support passage of an anti-union California ballot proposition, the state’s campaign finance regulators revealed.

Unlike super PACs, which must disclose their donors, Americans for Job Security is a 501(c)(6) tax-exempt trade organization that keeps its funders secret, even when it’s engaging in the same kind of overt candidate bashing that super PACs of all political stripes so often do.

Its ties to Republican politicians and political operatives are well documented.

In 2010, another election year, the group also saw a big bump in fundraising, showing $12.4 million, IRS filings indicate.

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AP

Why 2013 matters: covering money in politics during the off-season

By The Center for Public Integrity

With Election 2012 behind us, and Elections 2014 and 2016 still a long way off, you may be wondering what is left to say about money in politics. Consider the Source reporters Dave Levinthal and Michael Beckel will answer that, and any other campaign finance-related questions you may have in a live chat February 4, at 1:00pm ET. In the meantime, please feel free to leave your question in the comments section below, and visit Dave and Michael's new money-in-politics blog, Primary Source.

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Writers and editors

John Dunbar

Managing Editor, Politics The Center for Public Integrity

John is director of Consider the Source, the Center's ongoing investigation of the impact of money on state and federal politic... More about John Dunbar

Paul Abowd

Reporter The Center for Public Integrity

Paul is money and politics reporter for the Center's Consider the Source project. He comes to D.C.... More about Paul Abowd

Michael Beckel

Reporter The Center for Public Integrity

Michael Beckel joined the Center for Public Integrity as a politics reporter in February 2012, where his focus is super PACs and the infl... More about Michael Beckel

Reity O'Brien

James R. Soles Fellow The Center for Public Integrity

Reity O’Brien is the Center’s 16th James R. Soles Fellow.... More about Reity O'Brien

Chris Young

American University Fellow The Center for Public Integrity

Chris Young is an American University Fellow currently working as a member of the Center’s Consider the Source team.... More about Chris Young

Dave Levinthal

Senior reporter The Center for Public Integrity

Dave Levinthal joined the Center for Public Integrity in 2013 to help lead its Consider the Source project investigating the influence of... More about Dave Levinthal

Ben Wieder

CAR Reporter The Center for Public Integrity

Ben Wieder is the Computer Assisted Reporter for the Consider the Sourc... More about Ben Wieder