Spending violations reveal secretive political efforts

November 4, 2013 

A mention of the “Koch brothers” sparks anger among opponents who believe the Kochs, Charles and David of Arizona, are constantly trying to buy power for themselves and others. Now a California case has exposed to just how much trouble secret nonprofit groups will go to in order to funnel millions of dollars to their causes – and how much money is involved.

In a settlement of the case, a group tied to the Kochs admitted to failing to disclose more than $15 million it put into referendum battles in the Golden State last year. The case should focus attention on what one California official called “the nationwide scourge of ‘dark money’ nonprofit networks hiding the identities of their contributors.”

The Center to Protect Patient Rights out of Arizona and another group involved in the battle over those referenda will pay a $1 million fine and forfeit more than $15 million in contributions.

One referendum, called Proposition 30, would raise taxes on the rich. Another, Proposition 32, would have banned labor unions from using payroll deductions to raise money for political campaigns. The money, millions and millions of dollars, invested by high-dollar contributors must not have made much of a difference. Proposition 30 passed, and Proposition 32 failed, the outcomes desired by moderates and doubtless feared by conservatives.

The Kochs’ reach extends to North Carolina, where Americans for Prosperity, a group they started, has been orchestrating ads against Democratic U.S. Sen. Kay Hagan, who’s up for re-election in 2014. The campaign is gratuitous and hooked to an obscure issue, the carbon emissions tax, something few people are familiar with. It presents, however, an opportunity to attack a Democrat.

The New York Times reported Monday that the Kochs’ allies don’t go after just big political game. For example, the group is participating heavily in the mayoral and town council races in Coralville, Iowa, and in other small places. Why? Apparently, AFP, as some call it, fights for lower taxes and less government anytime, anywhere. Perhaps AFP wants to seed the race in Coralville figuring that the word might spread to Des Moines.

Some of this arch-conservative money goes to political action committees, which means that contributors’ names have to be disclosed. Other donors give to groups not required to disclose names – groups that can spend millions of dollars on issue advertisements.

A spokesman for the Kochs, who tend to be secretive about their own contributions, said the brothers did not themselves contribute to the conservative efforts in California.

Another “clever” maneuver by such groups is to dump money into a “center” and not designate that the money go for a political cause, which allows them to avoid California regulations that require sources of money for political spending be revealed. But those who receive the money are well aware of the intentions of donors, and the money is so spent.

In California with regard to the referenda, a Virginia-based group gave $25 million to the Center to Protect Patient Rights, which transferred $25 million to two other groups with ties to the Kochs. A Republican consultant told investigators that it was understood that some of the money would go to groups working on the referenda.

The network may be complicated, the rules complex and the maneuvering clever, but it appears the objective of all this transferring of money is akin to trying to confuse government regulators as to which shell the pea is under.

Democracy should not be bought and paid for, but the Supreme Court’s Citizens United decision of 2010 made it possible for corporations to pump whatever money they like to support their political causes and undermine those who oppose their agenda.

The Supreme Court majority called it a simple matter of free speech for corporations, but in a democracy the public should also be freely informed about who is doing the speaking. The California case is one positive step toward casting light on the “dark money” in our nation’s politics.

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