THE NEW SOFT MONEY Citizens United, 527s, 501(c)s and the Rise of Super PACs

PRIOR TO CITIZENS UNITED…

¢ Outside groups certainly spent money

¢ Some had as much impact as Super PACs �  Swift Boat Vets �  Moveon.org – Bush not

on our side �  PVF: Ashley’s Story �  NSP: Willie Horton

¢ First three done through “527 committees”

AFTER CITIZENS UNITED….

¢ Restrictions lifted on express advocacy

¢ Groups that can spend unlimited funds… �  Super PACs (new!) �  Labor Unions (new!) �  Corporations (new!) �  501(c)4s (new!) �  501(c)6s (new!)

WHO DISCLOSES WHAT

¢ Super PACs: �  Disclose all donors

¢  Sometimes, though, donors are C4s

¢  C4s don’t disclose their donors

�  Disclose expenditures ¢  Ad buys (TV, radio,

online) ¢  Phone banks, GOTV

�  List candidate, state �  Who they support or

oppose

¢ C4s, C6s, labor unions �  Don’t disclose donors �  Disclose expenditures

¢  Ad buys ¢  Phone banks, GOTV

�  Candidate supported or opposed UNLESS

�  Run issue ads ¢  Disclosed only within

30 days of a primary or 60 days of general

¢  Lists candidate mentioned

THE OLD RULES ABOUT “ISSUE ADS” STILL APPLY…

¢ Under Citizens United �  Anyone can run express

advocacy �  “Vote for, vote against”

¢ Despite that, we see most C4s and C6s �  Run issue ads �  Mention federal

candidates �  “Tell Joe Smith you

don’t want higher taxes”

A NOTE ON ELECTIONEERING…

¢ There is a ton of spending that does NOT show up in FEC files

¢ The only way to track it is to go to the public files the FCC requires broadcasters to maintain

¢ Sunlight is part of a coalition of groups trying to get these forms online

HERE’S WHAT ONE LOOKS LIKE (THERE IS NO STANDARD FORMAT FOR THESE)

QUICK PLUG…

¢  If you want more information on the FCC project, please contact me and/or Kathy Kiely—

¢  ballison@sunlightfoundation.com

¢ kkiely@sunlightfoundation.com

¢ We’d be thrilled to have your help

SO WHAT DATA ARE AVAILABLE?

THERE’S LOTS, AND SUNLIGHT MAKES IT AVAILABLE IN MULTIPLE FORMATS…

¢ New and improved tracker shows… �  All Super PACs �  All independent

expenditures �  All federal

candidates & races with IE spending

�  All electioneering communications

�  And much, much more!

PROVIDES SUMMARIES FOR CANDIDATES

¢ How much spent �  IEs �  Electioneering

¢ Links to other data �  Comparison to

other candidates

�  Candidate profile on Influence Explorer

DATA PULLED STRAIGHT FROM FEC, AVAILABLE FOR DOWNLOAD

¢ Download �  Independent

expenditures �  Donors to a

super PAC or all super PACs

�  Donors and Expenditures by state

GET TO RAW FEC FILINGS FROM THE SITE

¢ Helps you… �  Find out what

kind of group it is �  Find its address,

treasurer, etc. �  See more details

than we provide �  All data from the

FEC files are available for download from our site

LET’S TAKE A LOOK AT CHAMBER OF COMMERCE…

¢ Committee type “E”

¢ Means it only does issue ads

¢ Note that all filings are electioneering communications

IMPORTANT POINT ABOUT BUSINESS

¢ Try to maintain low political profile

¢ Work through trade groups

¢ The bigger the better ¢ Trade groups operate

�  At federal level �  At state level �  At local level

FIND OUT WHICH TRADE GROUPS BUSINESSES YOU COVER BELONG TO

¢ Trade groups don’t have to release lists of their members

¢ Generally, though, if you ask about one or two companies, they will answer

¢ At federal level, HLOGA requires disclosure of trade group members if… �  Company contributes more than $5,000 and… �  Helps select lobbyists �  Helps set legislative priorities �  Helps organize ad hoc coalitions �  Serves on committees w/in trade group that do any of

the above

TRADE GROUPS ARE HUGE POLITICAL PLAYERS

THERE ARE SEVERAL DIRECTORIES OF TRADE ASSOCIATIONS

LOOK UP THEIR 990S ON GUIDESTAR.ORG

See how much they spend on political activity…

boards of directors…

¢ Extensive lists ¢ They are usually

company execs ¢ Sometimes

lobbyists ¢ Boards drawn

from members ¢ Good way of

seeing who’s involved

Check to see if a trade group has a federal PAC…

GET TOTALS SPENT, DONORS, ETC.

OPENSECRETS.ORG PAGES LINK TO FEC REPORTS

FEC HAS A COMPLETE LIST OF THESE COMMITTEE CODES

LET’S LOOK AT A SUPER PAC

¢ Committee type “O” ¢ Means it’s a super

PAC ¢ We have an address

(Sacramento? For Hoosiers?)

¢ We have a treasurer’s name

¢ Forms filed include statement of organization, quarterly report, etc.

LET’S LOOK AT THE STATEMENT OF ORGANIZATION

¢ Page one: Boiler plate letter saying they’re a super PAC

¢ All super PACs file this

MOVING ON TO PAGE TWO…

¢ Address of committee

¢ Email & website (if there is one—often there is)

¢ Treasurer’s name

MOVING ON TO PAGE THREE…

¢ Tells you what kind of committee it is

¢ Tells you if it supports one or multiple candidates

MOVING ON TO PAGE FOUR

¢ Gives you the phone number of the treasurer

¢ With a lot of these shadowy groups, that’s going to be your first point of contact

¢ Sometimes they list two or three individuals

AND HERE’S A 24-48 HOUR NOTICE

¢ Candidate name ¢ Amount spent ¢ Race, and whether

they supported or opposed named candidate

¢ Also can see who made the ad buy

ALL ACCESSIBLE THROUGH THE FOLLOW THE UNLIMITED MONEY TRACKER

Also has a page for “organizational donors” (includes companies, nonprofits, unions, etc.)

For the most part, it’s rich people giving to super PACs

¢ Sheldon Adelson ¢ Harold Simmons ¢ Bob Perry ¢  Jeffrey Katzenberg ¢  Jerry Perenchio ¢ Peter Thiel ¢ Foster Friess ¢ Even most

corporate donors are companies controlled by these individuals

BUSINESSES CONTINUE TO OPERATE THROUGH 501C4 AND C6 ORGANIZATIONS

SO WHAT DO YOU DO ABOUT THE 501Cs?

¢ Here’s a recent electioneering communication ¢ Run by a group called Freedom Path ¢ Let’s dig deeper

WE TELL YOU THEY’RE NOT A SUPER PAC

¢ When it’s a super PAC, we tell you

¢ When it’s not, we leave that space blank

¢ So what kind of group is Freedom Path?

FIRST CLUE

¢ Go to the FEC filings

¢  It’s a type “E” committee

¢ Like Chamber of Commerce

¢  It’s a group (other than PACs) making electioneering communications

LET’S LOOK AT A FILING

¢ We get an address ¢ The custodian of

records (who looks like she does FEC compliance for a living)…

¢ You also get the date the ad ran,

ON PAGE TWO…

¢ Lists of people sharing control

¢ Plus their addresses

¢ And employer and occupation

NOTE THAT WE CAN LOOK THESE PEOPLE UP IN OPENSECRETS.ORG

¢ Using main search on home page

¢ Bensing a revolver

¢ Bensing a lobbyist

¢ Bensing working for four PACs

WE CAN SEE HE USED TO WORK FOR JOHN ENSIGN…

¢ Now works for SBC Strategic Consulting

¢ Used to work for November Inc., another lobbying firm

INTERESTS HE REPRESENTS

¢ Oooh, Ultimate Fighting Championship!

¢ State of Nevada ¢ Other

companies…

…AND THE PACS HE SERVES AS TREASURUER

¢ All four are Super PACs

¢ Freedom Path Action Network sounds a lot like Freedom Path

¢ Check to see if there are super PACs with names similar to the group you’re looking at

BACK TO THE FEC DISCLOSURE

¢ Money spent ¢ What they’re buying ¢ Federal candidates

mentioned ¢ Yellow: Who’s being

paid �  Note that with ad

buys, most of the money will go to TV, radio, etc.

GOOGLING FREEDOM PATH…

¢  In this case, we’re lucky

¢ They have a page telling us they’re a c4

¢ So we know what it is and who’s behind it

¢ What we don’t know is who contributes

¢ Always worth pointing which groups don’t disclose donors

IRS SOI HAS A LIST OF ALL TAX- EXEMPT ORGS…

¢ Organized by state and region

¢ Has c3s, c4s, c5s, c6s…c25s

¢ Lists income, expenditures and assets from most recent 990

¢ Has address of group & contact name

FOR NEW GROUPS…

¢ Some 501c4s and c6s will be created in the weeks to come

¢ They won’t have 990s available ¢ Check on their status with the IRS by calling

1-877-829-5500 ¢  It can be a 10- to 15-minute wait ¢ You can also contact Jim Willis at SOI for help

on exempt org data ¢  james.n.willis@irs.gov