Corporations, Trade Associations, and 527 Groups

Our new book is titled Divided We Stand: The 2020 Elections and American Politics.  Among other things, it discusses state elections

 The Center for Political Accountability has a report titled "Conflicted Consequences."

Publicly held U.S. corporations and their trade associations have strategically poured hundreds of millions of dollars into six large Republican and Democratic groups focused on electing governors and attorneys general and flipping control of legislative chambers. These non-profit, tax-exempt groups are called 527 organizations for the section of the Internal Revenue Code that governs them.

In this report, the Center for Political Accountability has followed the money, just as it did in its earlier Collision Course report. Focusing on groups active at the state level, we have mapped where their money came from and how much the groups received. And we have identified outcomes bankrolled by these groups. CPA is the first to undertake this research.

The money trail reveals that three Republican 527 groups targeted their political spending over the past decade from cumulative funds of more than $1.05 billion, with $485 million or almost half (45.8 percent) received from public company and trade association treasuries. This spending helped bring changes in control of state legislatures and the election of governors and attorneys general. In turn it helped drive new agendas that have transformed state and national policy. Among states where these 527s have had a major impact are North Carolina, Alabama, Pennsylvania, Georgia, Ohio, Michigan, Wisconsin, West Virginia, Oklahoma and Texas.

In contrast, the Democratic groups’ take during this period was $632 million, a little over half the amount received by the Republican groups. Democrats early in the decade lost significant representation in elected offices at the state level.

The six are: 

• RGA: Republican Governors Association
• DGA: Democratic Governors Association
• RAGA: Republican Attorneys General Association
• DAGA: Democratic Attorneys General Association
• RSLC:  Republican State Leadership Committee 
• DLCC: Democratic Legislative Campaign Committee

Newt, Inc. in 2013

Previous posts have discussed various elements of "Newt, Inc."  Open Secrets reports:

When Newt Gingrich’s fundraising powerhouse, American Solutions for Winning the Future, shut down in 2011, it didn't disappear. It turns out that it just went through metamorphosis.

Gingrich -- who speaks at CPAC tomorrow morning -- left American Solutions to run for president, and its fundraising dried up. Apparently the group decided that the time was ripe for are christening as a "social welfare" group, or 501(c)(4), under the tax code, according to reports to the IRS that were recently released. The new group would not have to file regular, timely reports detailing its receipts and expenditures, as it did in its incarnation as a 527 organization. In fact, it would not have to disclose its donors at all.

The new social welfare group has precisely the same mission as the old 527. It claims to be a "tri-partisan citizen action network creating the next generation of solutions that will ensure that the United States remains the safest, most free and prosperous country in the world." ("[M]ost free" was “freest” on the old group's forms.)

But if the 527 was having trouble raising money without Gingrich, there’s no indication that the new version of the group is doing any better. It raised just $500,000 in 2011, spending roughly $106,000. However, since social welfare organizations report their financial information almost a year after the spending actually takes place, the public will probably have to wait until the fall of this year to learn how the new group did in 2012.

The old American Solutions raised more than $50 million in four years, much of which went to pay Gingrich's travel expenses and otherwise boost his political profile.

See here for a mention of a for-profit wing of Newt, Inc., Gingrich Productions.

American Crossroads: Super PAC,Super 501

Bloomberg reports:

At least 25 “super PACS,” including one linked to Karl Rove, are fueling a surge in money for this year’s elections following the U.S. Supreme Court ruling that struck down limits on corporate campaign spending.

These political action committees can take unlimited company, union and individual donations and explicitly urge voters to support or oppose candidates, unlike ordinary PACs and nonprofit groups. Like other PACs, they must register with the Federal Election Commission and disclose donors.

“They can say whatever they want politically in the advertising,” said Michael Toner, a former FEC chairman who’s among the lawyers dubbing them super PACs. “It’s very liberating.”

...

American Crossroads may be the biggest. Rove and former Republican National Committee Chairman Ed Gillespie serve as fundraisers and informal advisers for the group, headed by former Republican chairman Mike Duncan.

American Crossroads spent $454,342 last month to support Republican Rob Portman’s Ohio Senate bid. Its nonprofit arm released new ads on Sept. 2 as part of a $3 million buy targeting four Democrats: Senate Majority Leader Harry Reid of Nevada, Senator Michael Bennet of Colorado and Senate nominees Jack Conway in Kentucky and Robin Carnahan in Missouri.

Politico reports:

One of those 501(c)(4)s is Crossroads GPS, a spinoff of the new group American Crossroads, which was formed by former Bush officials Ed Gillespie and Karl Rove. The original group was registered under 527 of the tax code, which gave it far more discretion to spend its cash to directly advocate for or attack candidates — but required that its donors’ names be disclosed to the public.

Last month, Crossroads GPS spent $1 million in ads to bolster the candidacy of Republican Carly Fiorina in her race against Democratic incumbent Barbara Boxer. It spent an additional $1.2 million in Colorado against Democratic Sen. Michael Bennet, who is trying to hold onto his seat amid a fierce challenge from Republican Ken Buck. It spent nearly $800,000 in advertisements attacking policies supported by Reid, helping his opponent, Sharron Angle, in Nevada. It spent an additional $341,000 in Kentucky in the race between Republican Rand Paul and Democrat Jack Conway, and it dropped $1 million more in Missouri to defeat Democrat Robin Carnahan, who is facing GOP Rep. Roy Blunt. And it spent an additional $561,460 in the race between Republican Pat Toomey and Rep. Joe Sestak in Pennsylvania.

Jonathan Collegio, a spokesman for Crossroads GPS, said that the purpose of the nearly $5 million in advertisements last month was to “illuminate the legislative record of the senators we are focused on.” And he added that 501(c)(4)s exist on “all sides of the political spectrum … not just on the right.”

Indeed, Democratic-aligned organizations are registered under the 501(c) section of the tax code, like MoveOn.org, Center for American Progress and the American Federation of State, County and Municipal Employees.

But of those groups, only AFSCME spent cash on the airwaves for Senate Democratic candidates last month, with $535,000 in Missouri and $322,000 in Nevada. The biggest spender of ad buys from Democratic-allied third-party groups — not including the state and national parties — was the Patriot Majority, a 527 group that spent $911,000 in Nevada ad buys, mainly attacking Angle.

American Crossroads Big Donors

Spencer MacColl reports at the Center for Responsive Politics:

527 GROUPS ATTRACT BIG INDIVIDUAL DONORS: Individuals -- many of them wealthy CEOs and executives from some of the nation’s more moneyed businesses -- contributed more than $20.5 million to 527 political action groups in the second quarter of 2010, according to a Center for Responsive Politics analysis. The big winner seems to be American Crossroads, the new conservative organization founded by Republican political strategist and former advisor to President George W. Bush, Karl Rove. The new group collected $2.3 million from the two biggest donors in the second quarter: Wayne Hughes, founder of storage giant Public Storage, and Trevor Rees-Jones, the founder and CEO of Chief Oil and Gas. The Republican Governors Association also brought in $1.3 million from two business-minded individuals: David Koch, a co-owner of oil giant Koch Industries ($1,000,000) and Paul Singer of the hedge fund firm Elliot Management ($500,000).