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Defying the Odds

Defying the Odds
New book about the 2016 election.

Tuesday, August 7, 2012

Disclosure and Nondisclosure

Open Secrets reports that 501(c)(4) organizations and other nondisclosing groups are spending much more on independent expenditures than in the past. 
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That trend is due in part to a U.S. District Court decision March 30 in the case Van Hollen v. FEC, which requires tax-exempt organizations making electioneering communications to disclose "each donor who donated an amount aggregating $1,000 or more to the person making the disbursement." After the decision, some big spenders like the U.S. Chamber of Commerce, which had previously produced only issue ads, changed tack and began running ads that explicitly advocate for or against candidates. As a result, the group can continue to avoid disclosing its donors.

In fact, no group has reported making a single electioneering communication since the beginning of April, just after the court decision.

Any group claiming 501(c)(4) status under the Internal Revenue Code is supposed to spend less than half its budget on political activity, such as independent expenditures. However, as OpenSecrets Blog has described, some groups spend much of their money on issue ads, and also fund other tax-exempt groups with similar political philosophies that in turn spend their money on advertising.

The increase in the overall reported spending by nondisclosing groups this cycle is likely attributable in great part to the fact that this is a presidential election year. An additional factor may be that this is the first full election cycle since the January 2010 Supreme Court decision in Citizens United v. FEC and other legal developments freed up fundraising and spending by outside groups.
The numbers reported to the FEC don't include the bulk of what the groups have spent. It excludes any money spent on electioneering communications that fell outside the 30-day pre-primary window. Most estimates put that amount at more than $100 million so far this cycle. [emphasis added]