Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Guardian, Men's Journal, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndyKroll.

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Following the Dark Money Would Be Easier if This Goverment Agency Did Its Job

| Fri Dec. 20, 2013 12:02 PM EST
A screenshot of the Priorities USA Action 2012 ad "Stage" attacking Mitt Romney.

A recent headline over at the Atlantic captured the mood when it comes to the state of money in American politics: "There's No Way to Follow the Money." The author, former Reuters editor Lee Aitken, was referring to the web of "social welfare" nonprofit groups moving hundreds of millions of dollars in dark money all around the country with the goal, ultimately, of influencing elections and shaping policy. Aitken has a point: As deep as reporters dig, it's harder than ever to track where the money's going, how it's being spent, and who's taking a cut along the way.

Following the dark money isn't any easier when timid or dysfunctional watchdogs plainly fail to do their jobs. Fingers point most often to the Federal Election Commission, which is at the moment an underfunded, ideologically divided, broken institution. But a new Sunlight Foundation analysis identifies another culprit: the Federal Communications Commission, the nation's top cop when it comes to TV, radio, and broadband.

Here's the back story: Tucked inside the Bipartisan Campaign Reform Act of 2002, a landmark piece of legislation better known as "McCain-Feingold" after its two sponsors, was a new requirement that local TV stations make available to the public information about political ad buys, including how much was spent and what candidates or issues were mentioned in the ad. Post-Citizens United, spending on political ads has exploded—$5.6 billion was spent in 2012, a 30 percent increase from 2008. Broadcasters' ad data can provide journalists, campaign staffers, activists, and anyone else with detailed and useful information on the ads running all over the country.

The problem? TV stations are ignoring the law, leaving the public in the dark.

A Sunlight Foundation analysis of 200 randomly-chosen ad buys by PACs, super-PACs, or nonprofits found that fewer than one in six actually disclosed the name of the candidate or specific election referenced in the ad. The most important fields on the ad buy paperwork are blank, and the TV stations that are so eager to rake in all those revenues aren't prodding the ad buyers to fully disclose what they're doing.

The FCC could crack down on this if it wanted. Sunlight's Jacob Fenton explains why the agency isn't acting:

TV stations could be penalized for leaving out disclosure information, but the FCC has shown little appetite for doing so. Although occasional enforcement checks took place in the years after the reforms were adopted, more recently the FCC has fallen back on a "complaint driven" process. In other words, the agency won't act unless someone asks it to. But because the vast majority of the political ad filings are hidden away in file cabinets at broadcast stations, available only during business hours when most voters are working, few people ever see them, let alone complain.

Steve Waldman, an Internet entrepreneur and journalist who worked as a senior advisor to former FCC chairman Julius Genachowski, said the nation's communications watchdog was leery of getting stuck with the unenviable position of campaign cop. "When it comes to political stuff, there's extra sensitivity at the commission because it's the one area where Congress jumps up and down and says, 'If you do that we're going to come and slap you in the head,'" Waldman said.

Tom Wheeler, who just replaced Genachowski, saw his Senate confirmation vote held up by Sen. Ted Cruz, R-Texas, over the issue of political ad disclosure. In a statement, Cruz said he lifted the hold after Wheeler said he'd make political ad funding disclosure "not a priority."

It's not all bad news on the political ad transparency front. In August, a judge ruled that the FCC could proceed with a plan to require several hundred broadcast stations located in the nation's 50 largest cities to post their ad files online. Sunlight, among others, is working to make those files accessible and easily searchable to anyone with an Internet connection.

In the campaign finance world, that's progress. But it's enough. The FCC and the TV stations themselves need to feel more pressure to ensure that those ad files comply with the law. It's one of the few useful tools we have nowadays for following that shadowy money trail.

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Should the NFL Lose Its Tax-Exempt Status?

| Mon Dec. 16, 2013 10:47 AM EST

Times are good for the National Football League. Viewership is up. For the 47th year in a row, Harris Interactive named pro football the most popular sport in America. And with overall revenues north of $9 billion, the NFL is the most lucrative sports league on the planet.

That's not enough for NFL Commissioner Roger Goodell. He wants to nearly triple the league's revenues to $25 billion by 2027—a mind-bogglingly large number. But here's an even more shocking fact: The NFL pays nothing in taxes on all those revenues. Not a nickel. And now the anti-corruption organization Rootstrikers wants to put an end to the NFL's free ride.

Over the weekend, Rootstrikers blasted out an email urging people to sign a petition in support of Sen. Tom Coburn's (R-Okla.) PRO Sports Act, which would ban big sports leagues from receiving tax-exempt status. "You know the NFL as the National Football League," says the Rootstrikers email. "But the IRS knows them better as the Nonprofit Football League—that's because the NFL has not paid any taxes since 1966 and average Americans are left paying higher taxes to make up for that lost revenue. Senator [Tom] Coburn is trying to change that, and we support his endeavor." Coburn's bill would ban pro sports leagues with more than $10 million in revenue from receiving tax-exempt status.

So, you might ask, how did the NFL score such a lucky deal in the first place? It's a classic tale of political influence and lobbying ingenious, as Gregg Easterbrook explains in an excerpt of his book The King of Sports: Football's Impact on America, published in the Atlantic:

The 1961 Sports Broadcasting Act was the first piece of gift-wrapped legislation, granting the leagues legal permission to conduct television-broadcast negotiations in a way that otherwise would have been price collusion. Then, in 1966, Congress enacted Public Law 89‑800, which broadened the limited antitrust exemptions of the 1961 law. Essentially, the 1966 statute said that if the two pro-football leagues of that era merged—they would complete such a merger four years later, forming the current NFL—the new entity could act as a monopoly regarding television rights. Apple or ExxonMobil can only dream of legal permission to function as a monopoly: the 1966 law was effectively a license for NFL owners to print money. Yet this sweetheart deal was offered to the NFL in exchange only for its promise not to schedule games on Friday nights or Saturdays in autumn, when many high schools and colleges play football.

Public Law 89-800 had no name—unlike, say, the catchy USA Patriot Act or the Patient Protection and Affordable Care Act. Congress presumably wanted the bill to be low-profile, given that its effect was to increase NFL owners’ wealth at the expense of average people.

While Public Law 89-800 was being negotiated with congressional leaders, NFL lobbyists tossed in the sort of obscure provision that is the essence of the lobbyist's art. The phrase or professional football leagues was added to Section 501(c)6 of 26 U.S.C., the Internal Revenue Code. Previously, a sentence in Section 501(c)6 had granted not-for-profit status to "business leagues, chambers of commerce, real-estate boards, or boards of trade." Since 1966, the code has read: "business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues."

The insertion of professional football leagues into the definition of not-for-profit organizations was a transparent sellout of public interest. This decision has saved the NFL uncounted millions in tax obligations, which means that ordinary people must pay higher taxes, public spending must decline, or the national debt must increase to make up for the shortfall. Nonprofit status applies to the NFL’s headquarters, which administers the league and its all-important television contracts. Individual teams are for-profit and presumably pay income taxes—though because all except the Green Bay Packers are privately held and do not disclose their finances, it’s impossible to be sure.

Since winning that insanely lucrative add-in, the NFL has spent lavishly to protect it and keep lawmakers happy. The organization has shelled out $12.7 million on lobbying since 1998—more than any other professional sports league—and given $2 million in campaign donations since 1992, according to the Center for Responsive Politics.

Those calling for the NFL to be stripped of its tax-exempt status point out that its leadership is making Wall Street money. In 2011, the NFL paid its five highest-ranking executives almost $60 million. Goodell alone pocketed $29 million. This largesse comes largely on the backs of taxpayers in cities that have pro football teams. As Easterbrook notes, "Judith Grant Long, a Harvard University professor of urban planning, calculates that league-wide, 70 percent of the capital cost of NFL stadiums has been provided by taxpayers, not NFL owners. Many cities, counties, and states also pay the stadiums’ ongoing costs, by providing power, sewer services, other infrastructure, and stadium improvements." In other words, the NFL isn't just ducking taxes; it's fleecing working people who do pay their taxes.

To be clear, as the NFL points out, much of pro football's billions in revenue ultimately get funneled to the league's 32 teams, which do pay taxes. Yet the league office's 2011 revenues still add up to a staggering $255 million, while the league spent some $332 million that year.

Which brings us back to the Rootstrikers petition in support of Coburn's PRO Sports Act. The bill, which has been stuck in committee since September, could use all the help it can get. So as you settle onto the couch next Sunday for a full day of gridiron action, don't be fooled by the NFL's manly, to-the-victor-go-the-spoils ethos. The league is one of the biggest welfare queens around.

Labor Unions Are Underwriting the Republican Party's Civil War

| Mon Dec. 9, 2013 11:11 AM EST

The Republican Main Street Partnership, led by former Ohio Congressman Steven LaTourette, plans to spend millions of dollars in the 2014 midterm elections supporting what it calls "the governing wing of the GOP." LaTourette's group aims to give political support and air cover to more moderate Republicans open to compromise in Congress, neutralizing the efforts of conservative stalwarts such as the Club for Growth and getting Ted Cruz-style hardliners out of Congress. The Main Street Partnership is a hybrid entity—part super-PAC, which can raise and spend unlimited sums of money but must disclose its activities, and part nonprofit, which can accept anonymous donations but can't focus primarily on campaigns and elections.

LaTourette has said his group plans to get involved in eight to 10 Republican primaries, and the Main Street Partnership has raised nearly $2 million to date. Yet according to National Journal, a good chunk of that money comes from two unlikely sources: the International Union of Operating Engineers and the Laborers' International Union of North America.

That's right: Two prominent labor unions are underwriting a group stoking the civil war that threatens to tear apart the Republican Party. Documents reviewed by National Journal show that the two unions have together given $400,000 to the Main Street Partnership, accounting for 20 percent of the group's funds.

Here's more from National Journal:

Certainly, labor's not alone in funding Main Street. The group's money is "coming from business folks, from private donors," said Main Street spokesman Chris Barron. "It has a wide range of folks who are interested in supporting the governing wing of the Republican Party."

Barron rejected critiques of Main Street's funding and positioning. "If the money came from Mother Teresa, the Club for Growth would attack where it came from," Barron said.

Both the Operating Engineers and the Laborers' union have given millions of dollars to Democratic candidates and millions more to the party's quasi-official House and Senate super PACs over the last few years. Only one other PAC gave more to Democratic candidates than the Operating Engineers' in 2012, according to the Center for Responsive Politics.

But both unions have also consistently invested in the campaigns of friendly Republicans, including LaTourette's (when he was in Congress). Earlier this year, LIUNA endorsed New Jersey Republican Gov. Chris Christie for reelection and its PAC gave $300,000 to the Republican Governors Association, which ran pro-Christie advertising in the Garden State.

The Operating Engineers' PAC has given 23 percent of its donations to federal candidates to Republicans this year, according to the Center for Responsive Politics, and it supported a super PAC called "Lunch Pail Republicans" last year. At the AFL-CIO's national convention in September, the Operating Engineers and another group offered a successful resolution urging "that the AFL-CIO take practical steps...to cultivate and nurture relationships with members of all parties" and "encourage moderate candidates" in Republican-leaning congressional districts as part of a "pragmatic, bipartisan approach" to its political giving and advocacy.

"Especially with this crazy political atmosphere, this is a place where we need to be lending support to middle-of-the-road Democrats and Republicans both, and this is part of that effort," Jeffrey Soth, the Operating Engineers' political director, said.

ALEC Boots Mother Jones From Its Annual Conference

| Fri Dec. 6, 2013 7:00 AM EST

Starting Wednesday, hundreds of state lawmakers descended on downtown Washington, DC, for a big three-day confab hosted by the American Legislative Exchange Council, the conservative advocacy group that that brings together lawmakers and representatives of major corporations to draft model legislation on issues such as taxes, energy, workers' rights, education, and agriculture. These bills are then introduced in state legislatures around the country—in some cases, lawmakers pass ALEC-inspired bills without changing a word.

There were dozens of press credentials laid out on ALEC conference's check-in table when I arrived Thursday morning. Mother Jones' was not among them. ALEC's board of directors had refused my request for credentials, according to spokesman Bill Meierling.

When asked why I'd been turned away, Meierling pointed to our previous coverage of ALEC and said it's clear that Mother Jones "fundamentally hates" ALEC. We've covered ALEC for more than a decade—a 2002 exposé titled "Ghostwriting the Law," coverage of the group's proposals regarding voting rights and workers' rights, and more recently the departures of big-name corporate members.

At the same time he was explaining why I couldn't attend, Meierling stressed to me that ALEC is "moving toward transparency." To his credit, he acknowledged the irony.

If ALEC had given me a press credential, the only events I would've been allowed to cover were keynote speeches by Republican luminaries Sen. Ted Cruz (R-Texas), Indiana Gov. Mike Pence, and Grover Norquist. But the real action at ALEC conferences, the meat-and-potatoes work, happens at the meetings of the group's many task forces—the environment and energy task force led by American Electric Power, the tax and fiscal policy task force led by tobacco giant Altria, and the international relations task force run by tobacco company Philip Morris. Meierling says that even credentialed reporters can't cover those meetings. Washington Post columnist Dana Milbank learned this firsthand on Wednesday, when DC police and ALEC staff stopped him from attending the group's private task force meetings.

It's been a tough week for ALEC. On Tuesday, the Guardian reported that the group faced a "funding crisis" after 40 of its corporate members and hundreds of state lawmakers ditched ALEC in the wake of Trayvon Martin's killing last year. Those members fled after it was revealed that ALEC's model legislation included the same Stand Your Ground law invoked by George Zimmerman, the neighborhood watchman who shot and killed Martin. ALEC has since eliminated its gun-related advocacy and, with a narrower fiscal focus, is trying to woo its erstwhile members to back into the fold.

Given the organization's recent struggles, I can understand why ALEC would be feeling defensive. Meierling, the ALEC spokesman, was polite throughout our conversation. We traded business cards before I left and promised to get a drink to talk more about Mother Jones. Fingers crossed for next year.

Conservative Think Tank Network Plotting "Coordinated Assault" on Medicaid, Education, Workers' Rights

| Thu Dec. 5, 2013 6:05 PM EST

The State Policy Network, an umbrella group overseeing a constellation of right-leaning think tanks in all 50 states, is plotting a nationwide "coordinated assault" to cut public-employee pensions, oppose cap-and-trade legislation and Medicaid expansion, and advocate for school vouchers, according to documents obtained by the Guardian newspaper.

The Guardian's documents reveal that State Policy Network's think-tank affiliates sought financial support for this blitz from the GD Searle Trust, a conservative foundation that bankrolls many major nonprofits including Americans for Prosperity, the American Legislative Exchange Council, and the climate-denying Heartland Institute. The documents show 40 different funding requests pitching conservative policy reforms that were written by think tanks in 34 states.

Here's more from the Guardian:

Most of the "think tanks" involved in the proposals gathered by the State Policy Network are constituted as 501(c)(3) charities that are exempt from tax by the Internal Revenue Service. Though the groups are not involved in election campaigns, they are subject to strict restrictions on the amount of lobbying they are allowed to perform. Several of the grant bids contained in the Guardian documents propose the launch of "media campaigns" aimed at changing state laws and policies, or refer to "advancing model legislation" and "candidate briefings", in ways that arguably cross the line into lobbying.

The documents also cast light on the nexus of funding arrangements behind radical right-wing campaigns. The State Policy Network (SPN) has members in each of the 50 states and an annual warchest of $83 million drawn from major corporate donors that include the energy tycoons the Koch brothers, the tobacco company Philip Morris, food giant Kraft and the multinational drugs company GlaxoSmithKline.

SPN gathered the grant proposals from the 34 states on 29 July. Ranging in size from requests of $25,000 to $65,000, the plans were submitted for funding to the Searle Freedom Trust, a private foundation that in 2011 donated almost $15m to largely rightwing causes.

[…]

The proposals in the grant bids contained in the Guardian documents go beyond a commitment to free enterprise, however. They include:

• "reforms" to public employee pensions raised by SPN thinktanks in Arizona, Colorado, Minnesota, Missouri, New Jersey, and Pennsylvania

• tax elimination or reduction schemes in Alabama, Arkansas, Georgia, Maryland, Nebraska, and New York

• an education voucher system to promote private and home schooling in Florida

• campaigns against worker and union rights in Delaware and Nevada

• opposition to Medicaid in Georgia, North Carolina, and Utah

As I've written before, SPN exists to help out its influential state-level affiliates around the country and to push conservative policies in state capitals. It's enjoyed quite a lot of success lately: SPN members also played a role in the crackdown on workers' rights in 2011 in Wisconsin, Ohio, Idaho, and Tennessee. A year ago this month, the Mackinac Center for Public Policy, an SPN member, rightly took credit for making Michigan the nation's 24th right-to-work state. Months later, Dick DeVos, the Amway heir and onetime in Michigan gubernatorial candidate, used SPN's annual conference as a chance to share his strategy with state-level allies itching for right-to-work in their states. The Guardian's documents strongly suggest that conservatives are coordinating their attacks on unions, public employees, and government.

Like prominent liberal nonprofit groups, the State Policy Network appears to have plenty more planned for the near future. If you thought the 2011 fight over workers rights was intense, what's coming next could be even fiercer.

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