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Not Always Clear Who's Funding Politics-Related Ads

Aug 3, 2012
Originally published on August 4, 2012 2:11 am

Prominent Jewish Republicans flew to Israel last weekend to join presidential candidate Mitt Romney on his overseas trip. Among them were casino magnate Sheldon Adelson and his wife, Miriam.

The Adelsons were in the audience Sunday when Romney gave a policy speech in Jerusaleum. And at a fundraising breakfast Monday, Sheldon Adelson sat by Romney's side.

But here's the odd thing: Adelson hadn't actually given a penny to Romney's campaign as of June 30, the last Federal Election Commission reporting deadline. The legal maximum he could donate to the campaign itself would be $5,000 — and that doesn't get you a seat next to the candidate.

Instead, Adelson's support for Romney far surpasses anything he would be legally allowed to give to the campaign itself:

- Adelson has given $10 million to the pro-Romney superPAC Restore Our Future, which under law is supposed to be independent of the campaign.

- He gave to the Republican Jewish Coalition, a tax-exempt social welfare organization, for a $6.5 million campaign entitled "My Buyer's Remorse" aimed at disaffected Jewish Democrats who voted for Barack Obama in 2008.

- And Adelson has reportedly made pledges of $10 million each to two more social welfare groups — Crossroads GPS, co-founded by strategist Karl Rove, and Americans For Prosperity, backed by billionaires Charles and David Koch.

Under tax law, social welfare organizations don't have to disclose their donors.

"I think that that's what gets [Adelson] that kind of access," says Bill Allison of the pro-disclosure watchdog Sunlight Foundation. "You know, he's somebody who can write million-dollar checks, or $5 million checks, at the drop of a hat. And you know, for a politician that's a really handy thing to have, even if the money is going to, you know, one of these surrogate groups."

But social welfare organizations are definitely playing a big role in shaping the debate around presidential politics. The campaigns and other groups — social welfare organizations included — are now spending some $20 million a week on TV ads related to the Obama-Romney race.

At the liberal advocacy group, Demos, Adam Lioz just co-wrote a report looking at the social welfare organizations and what he calls their "dark money."

"Of all the money spent on presidential ads so far, more than half of it has been from these dark money groups," he says.

This spring — ever so briefly — there was the prospect of more disclosure.

A federal judge told the Federal Election Commission to start enforcing an old, unused regulation, one that would make the social welfare organizations reveal who financed issue ads that run close to primary day and Election Day. These issue ads are called "electioneering communications."

The result? The most powerful social welfare groups simply planned to stop running electioneering ads. They're switching to independent expenditures — ads that expressly promote or attack a candidate.

Tom Donohue, president of the U.S. Chamber of Commerce, which also has no disclosure requirement for its political advertising, told reporters the judge's decision didn't matter.

"We will not have to disclose where our funding comes from," he said. "And by the way, you know what the disclosure thing is all about? It's all about intimidation."

That notion — that liberals are intimidating wealthy conservative donors — is a hot idea among conservatives these days.

But meanwhile, doing independent expenditures presents a new problem: If the IRS thinks a social welfare organization is focused too much on election politics, it can re-examine or even withdraw the group's tax-exempt status.

"It's like piloting your committee through the Scylla and Charybdis," says Craig Engle, a lawyer representing conservative groups, referring to sea monsters of Greek mythology. "The more you try to get away from the FEC, the higher risk you have of crashing into the IRS."

One way around that is to do more issue ads outside of campaign season.

But then the question is, are these issue ads really about issues? Or do they amount to a secretly funded, permanent campaign?

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish. In the presidential contest, Mitt Romney is benefiting from millions of dollars worth of ads funded by so-called social welfare organizations. They're tax exempt groups, like Crossroads GPS and Americans for Prosperity, that don't have to disclose their donors.

NPR's Peter Overby has this story about one billionaire donor and the lengths these groups will go to avoid revealing where their money comes from.

PETER OVERBY, BYLINE: Prominent Jewish Republicans flew to Israel last weekend to join Mitt Romney on his visit there. Among them, casino magnate Sheldon Adelson and his wife Miriam. The Adelsons were in the audience Sunday when Romney gave a policy speech.

MITT ROMNEY: Thank you for your kind introduction, Mayor Barkat, and thank you for the warm welcome. It's a pleasure and a privilege to be in Israel again and to see so many dear friends.

OVERBY: And, more to the point, at a fundraising breakfast Monday, Sheldon Adelson sat at Romney's left elbow. But here's the odd thing. As of June 30th, the most recent report, Adelson hadn't actually given a penny to Romney's campaign. And, anyway, the legal maximum would be $5,000 and that doesn't get you a seat next to the candidate.

Instead, Adelson's support for Romney far surpasses anything legally allowed for the campaign itself. Adelson has given $10 million to the pro-Romney superPAC. It's supposed to be independent of the campaign. He gave to the Republican Jewish Coalition, a tax exempt social welfare organization, for a $6.5 million campaign aimed at disaffected Jewish Democrats.

(SOUNDBITE OF TV AD)

UNIDENTIFIED WOMAN 1: The hope is gone and the change didn't happen and I think what changed has changed for the worse.

OVERBY: Adelson has reportedly made pledges of $10 million each to two more social welfare groups, Crossroads GPS, cofounded by strategist Karl Rove, and Americans for Prosperity, backed by billionaires Charles and David Koch.

Under tax law, social welfare organizations don't have to disclose their donors. Bill Allison is with the pro-disclosure Sunlight Foundation.

BILL ALLISON: I think that that's what gets him that kind of access. You know, he's somebody who can write million-dollar checks or $5 million checks at the drop of a hat and, you know, for a politician, that's a really handy thing to have, even if the money is going to, you know, one of these surrogate groups.

OVERBY: At the liberal advocacy group, Demos, Adam Lioz just co-wrote a report looking at the social welfare organizations and what he calls their dark money.

ADAM LIOZ: Of all the money spent on presidential ads so far, more than half of it has been from these dark money groups.

OVERBY: This spring, ever so briefly, there was the prospect of more disclosure. A federal judge told the Federal Election Commission to start enforcing an old, unused regulation, one that would make the social welfare organizations reveal who financed issue ads that run close to primary day and Election Day. These issue ads are called electioneering communications.

The result, the most powerful social welfare groups simply plan to stop running electioneering ads. They're switching to independent expenditures, ads that expressly promote or attack a candidate.

Tom Donohue is president of the U.S. Chamber of Commerce, which also has no disclosure requirement for its political advertising. He told reporters the judge's decision didn't matter.

TOM DONOHUE: We will not have to disclose where our funding comes from. And, by the way, you know what the disclosure thing's all about. It's all about intimidation.

OVERBY: That notion that liberals are intimidating wealthy conservative donors is a hot idea among conservatives these days. But, meanwhile, doing independent expenditures presents a new problem. If the IRS thinks a social welfare organization is focused too much on election politics, it can reexamine or even withdraw the group's tax exempt status.

CRAIG ENGLE: It's like piloting your committee through the Scylla and Charybdis.

OVERBY: Craig Engle is a lawyer representing conservative groups.

ENGLE: The more you try to get away from the FEC, the higher risk you have of crashing into the IRS.

OVERBY: One way around that is to do more issue ads outside of campaign season. Here's one from Crossroads GPS a year ago.

(SOUNDBITE OF POLITICAL AD)

UNIDENTIFIED WOMAN 2: Now, we have huge debt and even more people out of work and Obama's solution is to spend even more and raise taxes. Really? We've got to take away President Obama's blank check.

OVERBY: So then the question is, are these issue ads really about issues or do they amount to a secretly funded permanent campaign? Peter Overby, NPR News, Washington. Transcript provided by NPR, Copyright NPR.