“Tell President Obama … “
Remember that command from TV ads through the spring and summer? “Tell President Obama” to stop spending, or increase oil production, or whatever.
Even as the presidential campaign over the battleground states airwaves continues unabated — some $30 million every week — those three little words are largely gone. For the same reason they were ever used in the first place: so the groups running the ads can keep their donors secret.
IRS rules for tax-exempt “social welfare” organizations allow them to keep their donors’ names secret. That secrecy is crucial to many donors, who want to influence an election, but who do not want their businesses to suffer a backlash from customers and clients.
That tax status, though, is only available for groups so long as their primary purpose is not politics — as narrowly defined by a consensus among election lawyers that such messages can be entirely about politics as long as they include “tell so-and-so” rather than a specific voting instruction.
For their part, the groups insist their ads are merely educating people about issues, and have compared themselves to organizations like the NAACP that kept their donors’ names secret during the voting rights struggles to protect them from violent reprisals.
But starting 30 days prior to the presidential nominating conventions, groups that run issue ads are required to disclose to the Federal Election Commission every donor who gives more than $1,000. That law has been on the books for a decade, but it was widely ignored until this spring, when federal courts made the FEC enforce it.
It was early August when the 30-day window began that requires disclosure for presidential “issue ads.” That requirement will remain in force through Election Day, thanks to the related 60-day disclosure window for all federal races.
“It’s actually kind of perverse,” said Joseph Birkenstock, a Washington, D.C. elections lawyer who used to work at the Democratic National Committee. “I don’t think there’s anybody who would think this is an appropriate way to line up the disclosure rules.”
“This all gets very complicated,” said Rick Hasen, who teaches election law at the University of California Irvine. “Because the disclosure rules, surprisingly enough, are right now less strict if you say, ‘Vote against Obama’ or, ‘Vote for Obama,’ than if you say, ‘Call Obama and tell him what you think of his plan to kill the American economy.'”
Crossroads GPS, founded by top Republican consultant Karl Rove, was the second biggest spender on the GOP side for much of the year, behind only the Mitt Romney campaign itself. Rove, in fact, bragged about Crossroads’ role in an Aug. 1 Wall Street Journal op-ed.
“Roughly $111 million of Mr. Obama’s ad blitz was paid for by his campaign [in the previous three months]; outside groups chipped in just over $20 million. The Romney campaign spent only $42 million over the same period in response, with $107.4 million more in ads attacking Mr. Obama’s policies or boosting Mr. Romney coming from outside groups (with Crossroads GPS, a group I helped found, providing over half),” Rove wrote.
But Crossroads has stopped advertising in the presidential race since then.
Spokesman Jonathan Collegio told the Los Angeles Times in an Aug. 1 article: “Crossroads has no plans to air ads that will trigger reporting in the [electioneering communications] window.”
The only way for a tax-exempt group both to continue running ads in the presidential race and to keep their donors secret is to take advantage of a different loophole and run ads explicitly telling voters what to do — even if it means endangering their tax-exempt status with the IRS.
Another social welfare group, Americans for Prosperity, is doing exactly that. Backed by the billionaire Koch brothers, Americans for Prosperity began a $25 million ad campaign earlier this month telling voters to vote against Obama.
The first ad had a handful of voters explaining why they were voting against Obama after supporting him four years ago.
“The president has not earned re-election in 2012, in my book,” says a woman identified as Maria.
Group president Tim Phillips said the decision to switch to “express advocacy” was a result of how badly the economy is doing under President Obama. “Our organization felt compelled to act, so we’re taking a step that for us is unprecedented,” Phillips said.
Hasen, for one, got a kick out of that explanation.
“It was somewhat humorous that the spokesperson for Americans for Prosperity said we’ve done this and we’ve now decided that it’s important to be direct and come out against Obama,” he said. “They’ve been against Obama from the start. What’s changed is that we’re getting into the period of disclosure, so they’ve shifting to these ads in order to avoid disclosure.”
And Hasen said he think that Americans for Prosperity and other groups like it are caught in a bind. “I think what they’ve done is taken a calculated risk. And that they know that any action that might be taken against these groups will not happen until well after the election.”
Levi Russell, a spokesman for Americans for Prosperity, said the group would take care not to get close to the line that would endanger their status as a social welfare group. He said that the stricture against political activity has generally been interpreted as meaning a group cannot spend more than 49 percent of its money on politics. Just to be safe, he said. Americans for Prosperity would keep that percentage closer to 39 percent.
The IRS has never given such specific guidance. Nor is it clear if the “issue” ads that have openly attacked Obama all summer would qualify under IRS review as non-political, as the groups claim.
In either case, though, if the past is any guide, any enforcement action either by the IRS or the FEC is unlikely to force groups to reveal their donors. Which is likely something the groups are counting on, Hasen said.
“If these groups have to face a fine, that will just be a cost of doing business. They can disband and new similar groups can form before the next set of elections,” Hasen said.
Which would set the stage for the whole process to repeat itself in the summer and fall of 2014.
S.V. Dáte is the congressional editor on NPR’s Washington Desk.