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GOP Shadow Groups Alter Attack Ads To Keep Donors Hidden

David Koch, Karl Rove, and U.S. Chamber of Commerce are turning to an old loophole.
 
 
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In response to a recent court decision that was expected to bring greater transparency to election spending, the nonprofit created and chaired by billionaire industrialist David Koch, Americans for Prosperity (AFP), is shifting its electoral strategy to continue hiding its donors as it drops $27 million on the presidential race, with millions more likely to be spent as the election approaches.

Although AFP and other "dark money" groups seeking to conceal funders under current election rules could face additional problems under tax law, AFP may sidestep those issues by tapping its deep-pocketed donors for more funds.

Circumventing Lawsuit Intended to Increase Election Transparency

In March, a federal court partially closed a loophole that had allowed groups running "issue ads" near a campaign to avoid disclosing their donors by claiming none of the donations had been made specifically for the purpose of funding the ads.

Nonprofit corporations like AFP, Karl Rove's Crossroads GPS, and the US Chamber of Commerce have been spending millions on these types of ads, which name a candidate and might criticize him or her based on energy policy or taxes, but don't go so far as to urge viewers to vote for or against the candidate. The omission of an explicit call for a candidate's defeat or victory allowed the groups to claim with a wink-and-a-nod the ads were about "issues," despite clearly being intended to influence the election, and to hide their donors by claiming the ads were not funded through donations earmarked for the ads. It also allowed these nonprofits, which under tax law cannot spend more than half of their resources influencing elections, to classify these ads as something other than political activity in their IRS filings.

The decision in  Van Hollen v. FEC requires that groups making "electioneering communications" -- issue ads running within 30 days of a primary or party convention and within 60 days of a general election -- must disclose  all their donors of more than $1000, rather than only those whose donation is specifically earmarked to air the ads. The FEC subsequently enacted a rule change in response.

While some expected the  Van Hollen decision would bring greater transparency to elections, dark money groups like AFP have since made a subtle shift in strategy and in recent weeks have begun making "independent expenditures," running ads that expressly call for the election or defeat of a candidate. For the average viewer, AFP's new ads will be largely indistinguishable from the old ones, but the addition of language urging viewers to vote against Obama is important under election law and will allow AFP to keep hiding its donors. The  Van Hollen decision was not focused on a related loophole allowing groups running independent expenditures to keep their donors secret by claiming none of the contributions were made for the specific purpose of funding ads.

Subtle Shift in Strategy to Keep Donors Hidden

For many years, members of both parties have advocated for transparency in election spending, even as they disagreed about spending limits. Disclosure has long been seen as a way to not only hold donors accountable for the messages they fund, but also to hold elected officials accountable if their policy decisions are improperly attuned to those donors' interests. This support for disclosure is quickly changing, though, as the  GOP drops at least 16 years of official support for disclosure  from their party platform and deep-pocketed donors find new ways to escape public accountability for influencing elections.

AFP adopted its new strategy in early August. The group's  latest round of ads , which are part of a  $27 million campaign , feature voters saying "The president has not earned re-election in two thousand and twelve in my book."  Ads from earlier this month  urged voters to make Obama's presidency "a one-term proposition." The inclusion of language expressly calling for Obama's defeat classifies the ads as "independent expenditures" that do not trigger the  Van Hollen decision's disclosure requirements.