Super PACs are supposed to be both transparent and independent from the politicians they are supporting.
The super PAC’s biggest single vendor this year through June is a mysterious limited liability company, LKJ, LLC, whose owners are hidden behind the state of Delaware’s opaque registration laws. The company doesn’t appear to have a website or a physical office.
It’s only known address: a Washington, D.C., post office box — one it shares with a company run by Heather Larrison, the national finance director for Bush’s official presidential campaign.
The company’s Delaware origin makes it impossible to determine whether a chief Bush lieutenant is embedded in — and profiting from — the cash-flush tangle of entities created to boost his bid.
The arrangement is also a prime example, in the post-Citizens United era of politics, of how the borders separating presidential campaigns and super PACs can be simultaneously porous and difficult to penetrate.
Right to Rise USA, the Bush campaign and Larrison all refused to answer, or did not respond to, questions from the Center for Public Integrity.
Paying LLCs is legal, but opacity “clearly violates the purpose of the [regulations], which is to have true transparency,” said Trevor Potter, the former general counsel to Republican Sen. John McCain’s presidential campaign and former chairman of the Federal Election Commission who is the founder of the Campaign Legal Center, a nonpartisan watchdog group.
Potter said use of LLCs in this way also becomes a greater issue “in the modern world of super PACs supporting single candidates, because you have an obvious coordination question and you don’t have the information you would need to address it.”
Under the law, super PACs can support candidates, but can’t coordinate their expenditures with them.
The secrecy could also add to the mounting questions donors have about whether money is being spent efficiently to boost Bush, who has languished in the polls, despite touting his muscular organization and superior fundraising.
Trend in secrecy?
Many businesses are LLCs, but in some cases, LLCs paid by campaigns appeared to have been set up for purposes that include obscuring the vendors’ identities or creating legal separation between a campaign and super PAC.
“Some LLC contributions raised questions in prior cycles, and now we’re seeing more LLC disclosures on the expenditure side,” said Kenneth Gross, head of the political law practice at Skadden, Arps, Slate, Meagher & Flom.
For instance, during the 2012 election, the campaign of 2012 Republican presidential nominee Mitt Romney spent tens of millions of dollars through LLCs that were essentially set up to serve as general contractors, accepting payment from the campaign and, in turn, paying other vendors.
This effectively concealed the identities of some vendors, as well as exactly how much they were paid, making it impossible to tell who reaped the benefits of the campaign’s largesse.
In another case, a polling company, Public Opinion Strategies, worked for Romney’s campaign. But at the same time, other members of the same company reportedly worked through an LLC so they could legally perform polls for Restore Our Future, the super PAC that spent more than $142 million backing Romney’s candidacy.
That was necessary because super PACs and campaign committees are prohibited from working together in some key respects, though the legal definition of coordination is narrow, painfully technical and frequently misunderstood. Enforcement is rare.