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.
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.
Last week, the Internal Revenue Service, led by an appointee of President Obama's, and the Treasury Department sent shock waves throughout the political world by unveiling a new set of proposed regulations intended to clamp down on secretly funded nonprofits known as 501(c)(4) groups. Big-name 501(c)(4)s include Karl Rove's Crossroads GPS, the League of Conservation Voters, Grover Norquist's Americans for Tax Reform, and the pro-Obama Priorities USA. In the 2012 election season, 501(c)(4) groups spent $310 million, up from $5 million in 2006, according to the Center for Responsive Politics.
The government's new proposals are an attempt at stemming that tide of secret spending. In some corners, the proposals were hailed a smart first step; in others, a dangerous intrusion on taxpayers' free-speech rights. But on closer examination, tax lawyers and election experts say, the Obama administration's proposals won't plug the spigot of dark money pouring into US elections. Here are four reasons why.
DonorsTrust is the conservative movement's little-known but hugely influential cash machine, a conduit for millions of dollars in anonymous donations to anti-union legal shops, climate change deniers, pro-life advocates, libertarian think tanks, media watchdog groups, and a panoply of other right-leaning causes. Wealthy conservatives use DonorsTrust as a surefire way to invest their money, fingerprint-free, with the assurance it will end up in the right hands. According to new tax filings obtained byMother Jones, DonorsTrust is growing increasingly popular among the bankrollers of the conservative movement.
Last year, DonorsTrust (and its sister group, Donors Capital Fund) doled out a record $96 million, making it one of the largest honeypots for right-leaning groups. That's an increase from $85 million in 2011 and $78 million in 2010. DonorsTrust CEO Whitney Ball, who cofounded the group in 1999 and sometimes appears at the Koch brothers' donor summits, says the increased giving stems from her organization's growing profile and also conservative donors' anger at the Obama administration. And despite worries about donor burnout within the conservative ranks, Ball says DonorsTrust is on track for another great year in 2013.
In the summer of 2011, a group of law school professors filed a petition (PDF) with the Securities and Exchange Commission, the nation's leading financial regulator, asking it to force corporations to disclose their political spending. At the time, a small but growing number of corporations voluntarily revealed their political giving, but the law professors argued that corporate executives shouldn't ever be able to spend shareholders' money on campaigns and elections without telling shareholders where it was going.
Support for the corporate disclosure petition spread like brushfire. More than 600,000 comments—most of them supportive—were filed in response, a record for the SEC. When white-collar attorney Mary Jo White was confirmed as the new SEC chair in April, transparency advocates hoped she would take action on the issue.
Over the weekend, those hopes were dashed. The Washington Postreported on Saturday that White's SEC has dropped corporate disclosure from its 2014 to-do list:
Missing from the Security and Exchange Commission's list of regulatory priorities for the coming year is any plan to consider whether public companies should disclose their political spending, a setback for investor advocates who rallied behind the cause.
Last year around this time, when the SEC released its 2013 to-do list, it signaled that it might consider formally proposing a rule to require the spending disclosures. But the item slipped off the 2014 agenda released this past week without any formal explanation.
Supporters of the disclosure petition couldn't hide their disappointment at White's decision to sideline the issue:
"[White] obviously did not really recognize the significance of this," said Bruce Freed, president of the Center for Political Accountability, which has pioneered the push for political spending disclosures. "She is not looking at investor protection and corporate governance broadly. You do not see those as primary drivers of her agenda."
Robert J. Jackson, one of the professors involved in crafting the petition, said he has not lost hope.
The agency's new agenda is geared toward advancing proposals that are mandated by Congress, so it is not surprising that a non-mandatory initiative has dropped off the radar screen for now, he said. The agency is not precluded from acting on a matter, even if it's not on the formal agenda, according to federal statute.
"I remain hopeful that the SEC will eventually take up this rule," said Jackson, an associate professor at Columbia Law School. "I'm hopeful that when the SEC looks at the merits, they're going to decide that a rule is necessary."
In other words, corporate disclosure isn't dead at the SEC. It's just on the back burner for 2014. Certainly nothing major will happen before the 2014 midterm elections. The 2016 presidential race? Maybe. In the meantime, you can expect ongoing pressure from the advocates who churned out those hundreds of thousands of SEC comments.
Rep. Tom Petri (R-Wisc.), the author of a new campaign finance reform bill.
After the 2012 election, the Republican National Committee published a 100-page autopsy (PDF) nobly titled the "Growth and Opportunity Project" that pointed the supposed way forward for the humbled Grand Old Party. Regarding the dark-money-driven, super-PAC-mad politics of today, the document left little doubt about the party's view: Let the money flow. The RNC called for ending the ban on "soft money" (the 1990s-era equivalent of dark money that fueled the Clinton White House scandals), raising contribution limits, removing the aggregate limit on how much overall money a donor can give in one cycle, and further deregulating money in politics at the state and federal levels.
But as the cost of winning an election increases, fundraising swallows up more of a congressman's time, and candidates scramble to acquire their own super-PACs, several House Republicans are bucking their own party and demanding real reform.
Last week, Rep. Tom Petri (R-Wisc.) introduced a bill called the Citizens Involvement in Campaigns, or CIVIC Act, with the hope of spurring more small-dollar donations to political campaigns by reviving a pair of tax incentives. Petri's bill would offer small donors two options. They could receive a tax credit of up to $200 (or up to $400 on a joint tax return) for donations made to a campaign or national political party. Or that same donor could claim a tax deduction of up to $600 (up to $1,200 for a joint return) for political donations. The intent is obvious: entice many more small donations to candidates.
When he unveiled his bill, Petri lamented both the cost of running for federal office and the growing clout of very wealthy donors in the political process. "Campaigns are becoming more and more expensive with no signs of slowing down," he said. "And most would agree that the ideal way to finance a campaign is through a broad base of donors. Unfortunately, most Americans aren't in the position to donate hundreds or thousands of dollars—but they want to get involved. We should be encouraging political participation."
Fewer than 1 in 10 Americans have ever made a political donation, polls show. And for all of President Barack Obama's success in reeling in scads of small donations (aside large contributions), politics remains dominated by big money. In last year's elections, more than 60 percent of all donations came from donors giving more than $200, according to the Center for Responsive Politics. As for super-PACs and nonprofits, well, those are the playgrounds of millionaires and billionaires on both sides of the aisle.
Another House Republican, Rep. Andy Harris (R-Md.), recently introduced a bill of his own aiming to reform another cash-crazy part of congressional politics: so-called leadership PACs. Leadership PACs are different from your typical campaign committee. Instead of raising money for a politician's own reelection bid, leadership PACs, which sprung up in the 1990s, allow members to raise money for distributing to their colleagues' reelection campaigns. By spreading money around to your pals, a lawmaker can earn some goodwill and climb the ranks within his or her own party. Thanks to a loophole in the law, however, lawmakers often use their leadership PACs to pay for golf outings, tickets to NFL games, and other swanky junkets that politicians can't pay for with their traditional campaign war chest.
Harris' bill would close that loophole. "Public opinion of Congress is already low enough," he said. "By banning the personal use of political committee funds, we can help improve the public trust in Congress."
Let's face it: In the Republican-controlled House, these bills stand little chance of passage. (The slew of Democrat-introduced reform bills, which tend to be more extensive and comprehensive, are also doomed.) Yet the fact that Republicans are joining the reform effort matters. In the past, when campaign spending has spiraled out of control and resulted in headline-grabbing political scandals, Congress' instinct has been to look for the reforms already on the table and to pass one or some of those reforms in the scandal's aftermath. And if the bills have a bipartisan imprimatur, all the better.
So Petri's and Harris' proposals may be DOA. But should another money-and-politics scandal strike, these bills will be ready to go—and they'll have Democrats and Republicans ready to jump onboard.