Warm Southern Breeze

"… there is no such thing as nothing."

Can al-Qaeda fund U.S. federal elections & candidates? Yes.

Posted by Warm Southern Breeze on Tuesday, July 17, 2012

As things exist now, in conjunction with the Supreme Court’s decision on the People United case, there are no limitations on money that comes from 501(c)4 organizations. The category of such organizations under IRS rules 501 (c)(4) exist precisely and exclusively for the promotion of social welfare.

While they are allowed to donate to political contributions (under 40% of their revenue) they have typically NOT been checked by the IRS or other governmental oversight entities, and by law, 501(c)(4) organizations are not required to disclose their donors publicly. Such organizations have also recently been misused and abused by International Terrorist organizations, including al Qaeda, to provide a source of funding for their nefarious means. In essence, they’re being misused and abused to facilitate money laundering.

In 2010, a bill (the DISCLOSE Act) was passed by the U.S. House of Representatives that addressed identification of donors to organizations involved in political advocacy, but the Senate Republicans filibustered and prevented a vote on the bill.

Why Republicans – who in the past supported such DISCLOSURE – are now balking at passage of this law is incomprehensible.

Senate Republicans Block Campaign Donor Disclosure Bill

By Jonathan D. Salant on July 17, 2012

The U.S. Senate didn’t advance legislation that would require nonprofit groups to reveal who donates the millions of dollars they spend on campaign ads.

Yesterday’s vote on the Democratic proposal was 51-44, with 60 required to advance it. The measure, opposed by Republicans, is a response to the U.S. Supreme Court’s Citizens United decision in 2010 that removed limits on independent spending by corporations and labor unions. Democrats said they would seek another vote today.

Groups that kept their donors secret favored Republicans over Democrats in 2010 by $117 million to $13 million, according to the Center for Responsive Politics, which tracks campaign contributions. Such groups included the U.S. Chamber of Commerce, the nation’s largest business lobby, and Crossroads GPS, co-founded by Republican strategist Karl Rove.

Such spending overcame a Democratic fundraising edge in 2010 among candidates and party committees, helping Republicans win a U.S. House majority and increase their numbers in the Senate.

Former aides to President Barack Obama have set up a nonprofit group, Priorities USA, to raise money to support his re-election.

“Campaigns are no longer waged by candidates and parties fighting over ideas,” the bill’s chief sponsor, Senator Sheldon Whitehouse, a Rhode Island Democrat, said yesterday. “They are now waged by shadowy political attack groups posing as social welfare organizations.”

Republicans said the Democrats are trying to shut down groups that disagree with them.

‘Speech Suppression’

“The primary goal of this bill is not good government or transparency, but targeted speech suppression,” said Senate Republican leader Mitch McConnell of Kentucky said. Democrats are trying “to protect themselves from citizens over their wildly unpopular policies and positions,” he said.

The legislation, known as the Disclose Act, would require groups that spend at least $10,000 on an election to report donations of more than $10,000 within 24 hours of spending the money.

Under current law, only political action committees are required to disclose their donors, who can give no more than $5,000 each year. The Citizens United ruling freed corporations and unions to use their general-treasury money for independent spending to support or oppose candidates.

Unlimited Donations

The Federal Election Commission also approved creation of super-PACs, which can take unlimited donations. While donors to super-PACs are supposed to be disclosed, some contributors have used shell corporations to avoid identification.

For example, the super-PAC backing Republican presidential candidate Mitt Romney, Restore Our Future, received $235,000 from corporations created by payday lenders in the two months after Obama made a recess appointment of the Consumer Financial Protection Bureau director, who oversees that industry.

None of the payday companies’ business interests were identified in disclosure filings. Bloomberg News identified the payday lenders through state corporate and other federal campaign finance records.

The Democratic bill would require such donations to be disclosed.

The Chamber of Commerce, other business groups, and Republican-leaning nonprofit groups sent a letter to lawmakers using them to reject the measure.

‘Unfavorable’ Views

“The legislation is intended to facilitate retaliation against unpopular or unfavorable political views,” the letter said.

Groups that support campaign finance disclosure rules urged the Senate to pass the bill.

“Citizens are entitled to know the identities of the donors financing campaign expenditures to influence their votes, and the amounts they gave,” said the letter signed by leaders of the Campaign Legal Center, Public Citizen and the League of Women Voters.

The $10,000 threshold was designed to avoid requiring membership organizations, such as labor unions or the National Rifle Association, to disclose each donation to the group.

Republicans have said the Democratic measure is directed at corporate donors rather than labor unions. In terms of direct contributions, business interests have given 15 times more money to campaigns, PACs and outside groups than organized labor so far for the 2012 election, with 56 percent backing Republicans, according to the Center for Responsive Politics.

Democrats have sought to require groups that fund political ads to reveal who is paying for them.

Van Hollen’s Suit

Representative Chris Van Hollen, a Maryland Democrat, sued and won a ruling in March by a federal judge in Washington that the FEC can’t allow groups that spend money on campaigns to keep their donors secret. That decision is being appealed.

House Democrats have filed a bid in that chamber to push their version of the Disclose Act to the floor.

Among the Republicans voting against the bill was Senator John McCain of Arizona, who said in a U.S. Supreme Court brief in May that “Americans believe that the current system of campaign finance is corrupt, and that Citizens United, thanks to the anonymous spending it unleashed, has made the problem worse.” McCain co-sponsored a 2002 campaign finance law that required groups to report their ad spending.

The legislation is S. 3369 and H.R. 4010.

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


July 16, 2012

The Power of Anonymity

Two years ago, Congress came within a single Republican vote in the Senate of following the Supreme Court’s advice to require broad disclosure of campaign finance donors. The justices wanted voters to be able to decide for themselves “whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

The court advised such disclosure in its otherwise disastrous Citizens United decision in 2010, which loosed a new wave of unlimited spending on political campaigns. The decision’s anticorruption prescription has grown even more compelling as hundreds of millions of dollars in disguise have flooded the 2012 campaigns — a great deal of it washed through organizations that are set up for the particular purpose of hiding the names of the writers of enormous checks.

The ability to follow the money has never been this important since the bagman days of the Watergate scandal. But when the Democratic Senate majority made a fresh attempt to enact a disclosure bill on Monday, the measure was immediately filibustered to death by Republicans, like other versions.

Still, the vote was a chance for the public to see who stands for and against such basic transparency in political spending. The answer: not one Republican showed the courage to break ranks and speak up for disclosure.

Republicans have been the main beneficiaries of corporate and independent spending sprees. The party’s lock-step opposition to letting voters see who writes the big checks is an embarrassment to Congress.

Opponents are crying that disclosure violates donors’ privacy and favors unions. This is election-year nonsense to give cover to the aggressively partisan groups that pose as “social welfare” organizations but tip the campaign scales heavily with stealth financing.

The Senate measure would require corporations, unions and any other organization paying for election-cycle messages to disclose expenditures of $10,000 or more within 24 hours and identify donors writing checks of $10,000 or more. It would further require reporting of third-party money transfers, a shadow device to hide contributors.

The measure’s chief sponsor, Sheldon Whitehouse of Rhode Island, has tried to win Republican support by eliminating a provision requiring that the top five donors be identified at the end of election commercials.

But Republicans turned their backs, including John McCain, once the great champion of campaign finance reform who has been predicting that “huge scandals” will inevitably flow from Citizens United.

Voters concerned about the big-money distortion of politics now know precisely who put the issue quietly to bed.


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