Follow The Money

'Citizens United' Ruling Opened Floodgates On Groups' Ad Spending

fromWHYY

In January, the Supreme Court's Citizens United ruling lifted restrictions on how much money corporations, unions and individuals could spend on political ads. On today's Fresh Air, host Terry Gross talked with three journalists about the fundraising groups that have taken advantage of the Supreme Court ruling — and how their spending could affect the upcoming midterm elections.

Peter Stone

hide captionPeter Stone

Rick Bloom

In the first half of the show, Peter Stone, of The Center for Public Integrity, discussed his recent report about the many well-financed, pro-Republican groups that have been created in the wake of the Citizens United ruling. He said (as NPR's Peter Overby has also reported this week) that the new groups don't have to disclose where their money comes from and are allowed to fund political ads. There is a stipulation: the groups have to spend the majority of their budget on non-political activities such as legislative activities and lobbying if they want to keep their tax-exempt status.

But the rules are somewhat ambiguous, said Stone, who pointed to several independent groups — Crossroads GPS, The Chamber of Commerce and Americans for Prosperity — that are spending millions of dollars on ad campaigns for Republican Senate and House candidates in Nevada, Colorado and other battleground states.

"(They have been) running these so-called issue ads which tell the viewer that so-and-so is not very good on healthcare issues and (ask viewers) to please call or write Washington with your concerns," Stone said. "That's the line that some of these (groups) have to use to make sure they're sticking with the rules that require a little over half of their spending to go for so-called legislative or lobbying issues."

Stone said that if an ads urges listeners to "write Washington and tell them that (a certain candidate) is doing a bad job," it's not considered to be a campaign ad by these groups.

"Some campaign finance lawyers agree with (the point that it's ambiguous)," Stone told Terry. "I talked to a former head of the tax exempt division at the IRS, Marcus Owens, who pointed out that there's a lot of ambiguity there and that some of these ads are very close to being political ads. ... They criticize sharply a candidate on a particular issue and I think that (whether these are campaign ads) is a murky issue and will be resolved over time. The IRS in the past has issued slightly different interpretations on this and the rules on this are a little murky. There's wiggle room on this for a group that wants to push the envelope."

Earlier this week, some campaign finance watchdogs asked the IRS to investigate whether Crossroads has broken any laws — the organization dismisses that call for an investigation as partisan sour grapes.

Kenneth Vogel

hide captionKenneth Vogel

Politico

In the second half of the show, Terry spoke with Kenneth Vogel of Politico and Lee Fang of the liberal-leaning ThinkProgress about some of the specific groups that have formed since the Supreme Court ruled in Citizens United — and about the anonymous donations that have been pouring in ever since.

Vogel has been tracking the donations coming in to American Crossroads, which was created by Karl Rove and former Republican National Committee Chairman Ed Gillespie. He said that 75 percent of the $4.2 million ad buy announced this week by American Crossroads was paid for by undisclosed donors and detailed how this massive fundraising has changed Karl Rove's place within the Republican Party.

Lee Fang

hide captionLee Fang

ThinkProgress

"If we are to think of these groups as a shadow RNC or a shadow party infrastructure, Karl Rove would be the chairmen of this infrastructure," said  Vogel. "There's no doubt that he's very much involved — even as he and Ed Gillespie protest to the contrary — in really shaping the strategy of these new groups, coordinating between these new groups and raising money for these new groups. And if Republicans are successful in the 2010 midterms — if they capture the House (or) the Senate —  a lot of credit will go to Karl Rove and some of these groups that he helped form and orchestrate."

Fang discussed the U.S. Chamber of Commerce, which is technically a trade association organized as a non-profit — and has raised over $75 million and paid to have ads run more than 8,000 times on behalf of Republican Senate candidates. On Tuesday, Fang broke a story about foreign contributions to the Chamber of Commerce that are possibly being used to fund political ads.

"What we found were several fundraising documents that the Chamber has been using in places like Bahrain (and) India. The documents say foreign businesses are welcome and ask that these businesses send money to the same campaign account the 501(c)(6) that the Chamber is using to run attack ads," Fang said. "And they're telling these foreign businesses that they can have a voice in American public policy debates."

It's illegal, Fang noted, for foreign companies to spend money in American elections.

"However — because the Chamber doesn't disclose (their funding) and they've killed every effort to force disclosure on these campaign ads, we don't know the extent of this[and] we don't know how these funds are used," he said. "But it's important to note that all of these funds are co-mingled once they go inside this internal campaign account. (The Chamber) say they have internal controls but they've produced no documentation (and) no proof."

(Melody Kramer is an associate producer of WHYY's Fresh Air with Terry Gross.)

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