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How Corporations Are Secretly Moving Millions to Fund Political Ads

Gaping legal holes allow corporations to spend enormous sums on politics without leaving a paper trail.
 
 
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The Supreme Court’s seismic January ruling that corporations are free to spend unlimited amounts of their profits to advertise for or against candidates may have been the latest shakeup of campaign finance – but gaping holes already allow corporations to spend enormous sums without leaving a paper trail, a Raw Story investigation has found.

Campaign finance experts confirmed that though disclosure rules remained intact in the new Supreme Court decision, there are effective methods to circumvent them.

Ciara Torres-Spelliscy, an attorney and campaign finance expert at New York University's Brennan Center for Justice, said corporations already effectively end-run campaign finance law by shuffling money through trade associations.

“One of their favorites right now is spending through trade associations,” Torres-Spelliscy said.

Trade associations are considered tax-exempt non-profit organizations under US law. While they must report contributions received from other corporations to the Internal Revenue Service, the document itself remains confidential and is not made available to the public.

 
 
 

Exclusive: How corporations secretly move millions to fund political ads

 
By Brad Jacobson
Thursday, February 4th, 2010 -- 9:06 am

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stockwallcorporate Exclusive: How corporations secretly move millions to fund political adsThe Supreme Court’s seismic January ruling that corporations are free to spend unlimited amounts of their profits to advertise for or against candidates may have been the latest shakeup of campaign finance – but gaping holes already allow corporations to spend enormous sums without leaving a paper trail, a Raw Story investigation has found.

Campaign finance experts confirmed that though disclosure rules remained intact in the new Supreme Court decision, there are effective methods to circumvent them.

Ciara Torres-Spelliscy, an attorney and campaign finance expert at New York University's Brennan Center for Justice, said corporations already effectively end-run campaign finance law by shuffling money through trade associations.

“One of their favorites right now is spending through trade associations,” Torres-Spelliscy said.

Trade associations are considered tax-exempt non-profit organizations under US law. While they must report contributions received from other corporations to the Internal Revenue Service, the document itself remains confidential and is not made available to the public.

Story continues below...

“Money coming through the trade association doesn’t get disclosed,” Torres-Spelliscy explained. “You can’t tell if it came from particular corporations.”

For example, she said, “The disclaimer form is likely to just say, ‘This is brought to you by the Chamber of Commerce,’ with no extra ability to see behind that.”

The Chamber of Commerce is the world’s largest trade association representing at least 300,000 businesses and organizations.

A fellow non-profit that works on campaign finance, the Center for Political Accountability, calls trade associations “the Swiss bank accounts of American politics.”

“What was the lesson from Watergate?” Torres-Spelliscy quipped. “Follow the money?”

rsilogo Exclusive: How corporations secretly move millions to fund political adsHealth insurers, pharmaceutical companies embrace loophole

Trade associations such as America’s Health Insurance Plans (AHIP) and Pharmaceutical Research and Manufacturers of America (PhRMA) have had an enormous impact on the health insurance reform bills pending in Congress. In fact, AHIP was recently found to have solicited $10 million to $20 million from leading health insurance companies -- UnitedHealth, Wellpoint, Aetna, Cigna and Humana among them -- and funneled it secretly to the US Chamber of Commerce to underwrite anti-reform attack ads.

Asked about the story, the Chamber's top lobbyist told the reporter, "No comment. We never disclose funding or what we're going to do." The Chamber of Commerce did not respond to a Raw Story request for comment.

Raw Story’s 2008 award-nominated investigative series The Permanent Republican Majority noted that, “Despite its seemingly bipartisan name, the Chamber of Commerce has operated as a pro-Republican powerhouse since the fervently anti-regulation Thomas J. Donahue became president in 1997.” Raw's Larisa Alexandrovna and Muriel Kane uncovered, for instance, that the Chamber, under Donahue's leadership, had an indirect role in the defeat and political prosecution of Governor Don Siegelman and in targeting sitting judges in contested state elections.

 
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