Non-profits outspending Super PACs

"It wasn't supposed to be this way," intones an announcer; "President Obama's plan: spend more... the economy's slowing... but our debt keeps growing."

The ominous music fades and the bleak shades of grey video ends with a message for the president and a pitch to potential donors: "Tell him for real job growth, cut the debt. Support the new majority agenda at NewMajorityAgenda.org."

The ad, "Tried," mimics the look, feel and sound of super PAC ads getting so much publicity for dominating the airwaves. But this one isn't from a super PAC. It was paid for by the non-profit Crossroads Grassroots Policy Strategies. The IRS classifies Crossroads GPS as a 501(c)(4), a "social welfare nonprofit." ProPublica's Kim Barker calls these c4s the "cousins" of the much-hyped super PACs, but they aren't the younger, smaller cousins. Barker reports that, overall, nonprofits have spent over $71 million so far on this election. Two conservative nonprofits, Crossroads GPS and Americans for Prosperity have poured almost $60 million into television ads to date, outspending all super PACs put together (according to CMAG, Super PACs have spent an estimated $55.7 million on TV ads to date).

"Basically what you have is millions of dollars and it's going to be hundreds of millions of dollars coming into this election where we are not going to know where that money is coming from," explained Barker on "Face the Nation."

Not only are these groups outspending super PACs, but also they're doing it with even less accountability to the voters they're purporting to help. These non-profit groups, unlike Super PACs, do not have to disclose their donors. Barker reports these groups have hidden behind weak reporting rules and used their vague to operate "exclusively for the promotion of social welfare," to pour millions of dollars into electioneering.

"Nobody's actually talking about it. It's just sort of accepted that this is the way it is. You have all of this anonymous money coming in and there's nothing we can do about it," said Barker. She continued, "we've seen it since 2010, we're going to see it to a much greater extent in 2012"

When applying for tax-exempt status, a number of these groups checked that they would not be engaging in political activity. Later filings show they did just that - in a big way. Other "groups submitted tax returns spelling out the millions they poured into the 2010 election, they had stopped operating, or disbanded and reformed under new names." ProPublica identified a number of groups, than when they did file with the federal government, gave conflicting reports to the IRS and the Federal Election Commission as to the amount of political activity the groups undertook.

With just 80-some days left until the election - and $70-some million already spent by these social welfare non-profits -experts tend to agree nothing will change the campaign finance landscape before November. Paul S. Ryan, senior counselor for the Campaign Legal Center summed the issue up for Barker: "The political players who are soliciting these funds and are benefiting from the expenditure of these funds will know where the money came from. The only ones in the dark will be American voters."

Read Barker's full article, How Nonprofits Spend Millions on Elections and Call it Public Welfare

  • Alicia Budich

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