Politico:Undisclosed donors pour cash into Senate races

Written by admin on September 11th, 2010

Politico reports on the money pouring into campaigns through tax exempt organizations to avoid disclosing the donors behind the cash.

Politico Story

A number of the groups appear to have been bolstered by the Supreme Court’s Citizens United decision in January, allowing them to spend money on television advertising without having to disclose their donors. In the Citizens United case, the Supreme Court said that groups registered under Section 501(c)(4) of the tax code can make independent expenditures and engage in electioneering communications, or issue-based advertisements. Before the ruling, only certain 501(c)(4)s that did not accept money from business and labor groups were allowed to make independent expenditures that helped federal candidates.

But since such tax-exempt, nonprofit organizations do not have to disclose their donors, campaign finance watchdogs are worried that voters have been left in the dark over who exactly is influencing the midterm elections.

“It’s a huge concern for us and most Americans that they may not know who is funding these groups,” said Sheila Krumholz, executive director of the Center for Responsive Politics, which tracks campaign financing in elections. “These outside groups can spend unlimited sums, and they have new flexibility to raise and spend money after Citizens United. … And it’s simply untenable to think they can do so with anonymous donations.”

One of those 501(c)(4)s is Crossroads GPS, a spinoff of the new group American Crossroads, which was formed by former Bush officials Ed Gillespie and Karl Rove. The original group was registered under 527 of the tax code, which gave it far more discretion to spend its cash to directly advocate for or attack candidates — but required that its donors’ names be disclosed to the public.


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