News & Politics

Unlimited Secret Money Is Drowning Democratic Elections

Corporate interests are flouting election law by using anonymous donations, which are drowning out the voices and votes of working Americans.

The 2012 presidential election year promises to be the most expensive ever and unless the Department of Justice does its job, it also promises to be have the most anonymous campaign donations in U.S. history. Unknown corporate interests will fund massive advertising campaigns against and for candidates but the voters will not know who they are or their real agenda. The Obama administration can prevent this further corruption of U.S. democracy by enforcing existing laws.

In the last mid-term elections we saw the evolution of a new form of campaign funding that avoided the disclosure requirements of the Federal Election campaign Law (FECA). The new approach was masterminded by Karl Rove and former Republican Party leaders through American Crossroads GPS. They created a non-profit organization under 501(c)(4) of the Internal Revenue Code -- organizations that are not supposed to be primarily involved in elections -- and used it to raise tens of millions in secret donations. In total, nearly $150 million was spent by these (c)(4) groups leaving voters in the dark as to the personal interests of the donors. We can expect that to more than double in 2012 if existing laws are not enforced. Indeed Rove has announced his group alone intends to raise $120 million for 2012.   

A coalition of advocacy groups have come together as, to fight back against Rove and others, such as the Chamber of Commerce and American Future Fund, to make sure that they do not violate campaign finance law in the upcoming election as they have done in the past. Our simple request to U.S. Attorneys, the Department of Justice and the Obama administration: enforce existing law.

While the Citizen's United decision allowed unlimited donations by corporations and individuals, it did not allow anonymous donations. The federal election law requires that donors be identified. In order to do an end-around this requirement some political operatives have set up non-profit to hide donors identities. This not only violates FECA but IRS regulations as well. The Department of Justice has the authority to enforce criminal violations of FECA even without action by the Federal Election Commission. has sent letters to 40 U.S. Attorneys along with more than 12 thousand signatures of citizens urging prosecution of these organizations for illegally using non-profit front groups to violate FECA during the 2010 elections. Campaign Accountability Watch has been talking and meeting with specialists at the FBI on how to use criminal provisions of FECA to prosecute these wrongdoers. The campaign has also filed complaints with the Department of Justice, the Internal Revenue Service and organizations have filed an FEC complaint last October. No one have been prosecuted for their violations to date.

It is not only the organizations that are very likely violating federal law, but the donors may be as well. Any donor who makes a secret donation to a non-profit in order to violate the disclosure requirements of federal election law should be fully aware that they run the risk of being called before a federal grand jury and even prosecuted if it can be shown that they made a donation willfully and knowingly to avoid campaign finance laws. It just takes one U.S. Attorney to issue subpoenas to these violators for Americans to better understand the need to comply with existing campaign finance laws.

Over the past few months, unlimited, secret money has drowned out the voices and votes of working Americans. Campaign Accountability Watch is letting U.S. Attorneys in over 40 districts know that their constituents want them to empanel grand juries and prosecute FECA violators. These violators may think that they can hide their donors and their books while doing the bidding of corporate barons but they cannot hide them from criminal investigations.


Kevin Zeese is director of ItsOurEconomy.US and spokesperson for Campaign Accountability Watch.
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