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David Koch's Non-Profit Flouts Law And Spends $700,000 Against Wisconsin Recall

The non-profit founded by the oil billionaire injects $700,000 to retain the embattled Wisconsin governor, possibly violating various laws on political activities.

The Koch-founded Americans for Prosperity Foundation (AFP), a 501(c)(3) nonprofit "charity" prohibited from intervening in political campaigns, is spending $700,000 on ads and holding events around Wisconsin that look like appeals to re-elect Wisconsin Governor Scott Walker, who is facing a recall election. The campaigning seems to flaunt proposed state campaign finance rules that AFP helped block and comes as secretly-funded nonprofits are playing an increasingly important role in elections nationally.

Townhalls and "Issue" Ads

The Americans for Prosperity Foundation (AFP) says it is aiming "to help citizens separate the rhetoric from the reality on the budget reforms passed in Wisconsin last year," according to a press release from the organization. The "budget reforms" AFP is addressing include Governor Walker's limits on public sector collective bargaining as well as around $749 million in cuts from K-12 public education and other "reforms," all of which inspired months of protest in 2011 and recently led over 1 million Wisconsinites to sign petitions to recall the governor.

With a recall election almost imminent, AFP is holding "townhall" events across the state to allegedly have a "respectful discussion on why we must maintain the reforms that have saved hundreds of millions for Wisconsin taxpayers.” The implication seems clear. The election of a governor other than Walker would threaten the "reforms;" his reelection would maintain them. And according to AFP, "we must maintain the reforms."

AFP is also spending $700,000 on a statewide TV ad campaign defending Walker's reforms. The minute-long ad alleges Walker ended collective bargaining "abuses" and saved the state money without any "mass layoffs." According to the National Journal, "Despite not mentioning Walker, the ad is consistent with Walker's own strategy in the lead-up to the all-but-certain recall election, which has involved launching positive TV spots that tout the results of Walker's controversial budget repair measure that curbed collective bargaining for public employees."

The current ad resembles a series AFP ran on Wisconsin TV late last year, just as Walker's opponents began collecting signatures to recall him. All of AFP's costly ad buys in the state bear a striking resemblance to Walker's "Reforms and Results" website, which itself prompted a complaint to the state elections board on grounds it was a taxpayer-funded campaign effort.

AFP Donors Kept Secret, Part of National Trend

AFP's pro-Walker activity seems to push the envelope on Internal Revenue Service (IRS) rules about nonprofit participation in elections. It also comes as nonprofit organizations -- which are not required to disclose their donors -- are playing an increasingly important role in the 2012 campaign season.

The Washington Post reports that nationally, "more than a third of the advertising tied to the presidential race has been funded by nonprofit groups that will never have to reveal their donors."

Super PACs must disclose to the Federal Elections Commission (FEC) the source of their funding by name and amount, as well as their spending on ads. Nonprofits -- groups organized under Section 501(c) of the IRS tax code -- have no such obligation. Nonprofits must file annual tax returns (which are often not available until the middle of the following year), but need not report the identities of their donors, nor do they need to get into much illuminating detail about how their funds were spent.

A narrow majority of the U.S. Supreme Court in Citizens United v. F.E.C. opened the door to unlimited donations and spending by groups other than candidate committees, and when combined with a series of other court decisions, led to a surge in secret spending beginning with the 2010 midterm elections (despite the Citizens United majority favoring disclosure).