the shadow money game - russ choma

The Shadow Money Game

Unraveling Political Nonprofit Funding

Russ Choma Money-In-Politics Reporter

OpenSecrets.org

CRP/OpenSecrets.org

A business story?

A business story? ●  Federal government’s actions are a major

factor in every businesses bottom line -- understanding how businesses manipulate Washington is crucial.

●  Business reporters have some unique skills to work on this.

●  Cutting edge is corporations -- the dark money LLC.

What we’ll talk about ●  What is dark money? ●  What does OpenSecrets.org do to help you

understand dark money? ●  How to look for dark money stories and

make them relevant. ●  What’s the next big story to look for? ●  Resources

What is dark money? ●  Hard money vs. soft money ●  Citizens United

o  What did it not do? ▪  Make corporations people. ▪  Allow corporations to give politicians money.

o  What did it do? ▪  Enabled corporations (which were already people)

to spend money on campaigns -- indirectly. ▪  Unleashed the nonprofits.

Independent expenditures vs. issue ads

●  Independent EXpenditures are EXplicit

●  Anyone can make them

●  Reported to the FEC

https://www.youtube.com/watch?v=frzHJlsUmdE ADVERTISEMENT:

Independent expenditures vs. issue ads ●  Issue ads can be

explicit ●  Theoretically

about issues ●  NOT reported to

the FEC* ●  Reported to the

FCC*

https://www.youtube.com/watch?v=t7qoOYC-QE0 ADVERTISEMENT:

Super PACs vs. 501(c)(4) ●  Super PACs

o  Independent expenditure only o  Report donors o  Report ALL spending

●  501(c)(4) o  nonprofit corporation o  One of many types of 501(c) groups o  Don’t disclose donors o  Don’t usually disclose spending

Why do you/your editor care?

$1.05 Billion

Why do you/your editor care? •  Citizens United allowed corporations to spend on political campaigns – but they’re not doing it publicly.

•  Aetna accidentally disclosed $7.8 million to anti-Obamacare groups, while publicly backing it.

•  Reynolds American, cigarette maker, gave to Americans for Tax Reform and others

• Lobbying: • Intuit’s opposition to simple tax filings.

What does OpenSecrets.org do? •  Cory Booker: $12.2 million, over 5,000 pages of campaign filings, tens of thousands of donors.

What does OpenSecrets.org do?

What does OpenSecrets.org do?

What does OpenSecrets.org do?

What does OpenSecrets.org do? •  Campaign finance

• Candidates, PACs (corporate, labor, etc.) and parties • 14,200+ organizations

• Lobbying • 4,100+ organizations

• Personal finances • Outside spending

What does OpenSecrets.org do?

OpenSecrets.org and dark money

http://www.opensecrets.org/outsidespending/

OpenSecrets.org and dark money

http://www.opensecrets.org/outsidespending/

OpenSecrets.org and dark money

]

OpenSecrets.org and dark money

Finding dark money stories – 990s • Sources:

• Guidestar • CitizenAudit • OpenSecrets.org

• Key Information: • Revenues • Contacts • Directors • Top vendors • Grants

Finding dark money stories – FCC

Finding dark money stories – FCC

●  All stations must keep this public file, all political spending must be included -- local, state, federal and “issue” ads.

Finding dark money stories – FCC

Finding dark money stories – FCC

Finding dark money stories – FCC ●  TV lobby is powerful, so currently only

available for the top 50 markets -- that’s changing this summer.

●  Does not include cable ads. ●  Does include local races. ●  Every filing is different, and different stations

may require different information, but it’s a start.

Finding dark money stories – SOS Filings

●  Non-profits ARE corporations -- not only do they file 990s, they file annual reports with states.

●  Increasingly, dark money groups are reporting links with LLCs (more on this later). ○  Most political reporters have no idea what to

do about this. ○  Disregarded entities/loans/consultants, etc.

What’s the next big story? ●  2012 was the year of the super PAC, with

501(c) groups making an appearance. ●  2014 will have heavy activity by 501(c)

groups, but… ●  The smart money has already moved on to

“new fangled vehicles” -- LLCs. ●  The for-profit political company?

Questions?

Russ Choma rchoma@crp.org

202.354.0108 opensecrets.org

Resources ●  OpenSecrets.org ●  Sunlight Foundation.com ●  CitizenAudit.org -- 990s ●  FCC -- political files ●  SEC filings ●  State filings