The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.

Monday, September 16, 2013

Open Secrets: Dark Money

The following is a re-blog from Open Secrets Dot Org.  

The piece is as relevant to US politics and US society as state and federal government.  Money is flowing into US politics at an alarming and dangerous rate.  Ultimately, lobbying dollars and political contributions work for business entities and special interest groups. There are few to no organizations, which pour money into Congress on behalf of "The People." It just does not happen comparable to money funneled to support 360 degree wealthy accumulation by the nation's Top 20% (ers). 

As is the case with all 'high information", the following is not a quick read.  Of course, we are aware, people really do not like long reads. Well, there are times when our tendencies contribute to "low information." Do you want to live your life as do most Fox News viewers? How about Beck viewers and listeners?  Or, better yet, people who visit Breitbart News Dot Com and actually feel they are being informed vs. entertained.  In fact, entertainment and political posturing is the basic media model for each of the three entities. 

Open Secrets, nor  do we have an answer to the horrors of purchased legislation, purchased votes, and purchased politicians However, we feel an obligation to inform. When information flows, good things eventually happen. What we do know is Citizens United open a door that leads to nothing the horrors of plutocracy. As the IRS attempted to investigate the legitimacy of the Citizens United money flood, it became immersed in conservative, "hands-off" our SCOTUS decision rhetoric  that lingers even today. 

Update, Sept. 11: For clarity, we have added two paragraphs to this story (see *) explaining that the IRS and FEC definitions of political spending are not identical, and have rephrased headlines to two charts.

Building on our previous work on "dark money" nonprofits, the Center for Responsive Politics is rolling out new information on the activities of these groups that are playing an increasing role in U.S. elections. 

Dark money groups -- politically active 501(c)(4) social welfare organizations and 501(c)(6) trade associations that, under tax law, don't have to disclose their donors -- aren't supposed to spend the majority of their resources on politics. But over the last six years, a combination of Supreme Court decisions that loosened restrictions on their electoral activity, coupled with regulatory confusion, has led to a surge in their political expenditures. Direct spending on federal elections by 501(c)(4) and 501(c)(6) groups has risen from $10 million in 2004 to well over $300 million in 2012 -- and that's just counting what they reported to the Federal Election Commission, which doesn't include all of their political spending.

And the nature of their activity has changed in recent elections. Nearly half of the political spending by these groups in 2004 went for communications to their own members -- what the FEC calls "communication costs." Now, it shows up almost entirely in the form of negative, often misleading ads aimed at influencing the outcome of elections. In 2012, only 2 percent of the spending by these groups was directed at their own members. 

But trying to sort out exactly what these groups are doing ranges from very difficult to impossible, given how little information is available to the public. For example, the groups must disclose their total spending on their IRS Form 990s, due annually. But nowhere do they have to break down those expenditures in detail and say exactly how they spent the money, as unions must in reports with the Department of Labor. On top of that, the 990s are filed anywhere from five to 23 months after the spending in question actually takes place. Once they're filed, the IRS offers no searchable database or machine readable data to the public. It provides only scant summary data. 

To help get around some of the hurdles posed by the dearth of IRS data, CRP has manually input more than 14,000 records, with the aim of bringing more clarity to the financial activities of nonprofits that have spent money to influence, directly and indirectly, federal elections over the last three cycles. 

CRP's data includes all politically active 501(c)(4)s and 501(c)(6)s, whether or not they have been granted tax-exempt status by the IRS. Such groups as Crossroads GPS, American Commitment, and Citizens for Strength and Security either have not received or not applied for exempt status. The IRS does not include such groups in the data it makes available. Also, CRP's new data includes other information that's absent from the IRS data: total expenditures, total grants and total political spending reported to the IRS, over a period of multiple years. 

On the other side of the divide, at the FEC, these groups must file reports when they make certain political expenditures, but the agency doesn't require them to provide identifying information -- such as Employee Identification Numbers (EINs). So CRP has gone through three cycles of outside spending data and matched FEC filers with IRS identifiers, allowing us to link the two sets of data. 

The result is that we are providing multiple years of data reported to the IRS and the FEC, matched over the same time periods that the spending took place. We've included direct political spenders as well as what we call "dark money mailboxes" that reported no spending to the FEC themselves, but sent more than half their funds to politically active nonprofits. 

Not only have we matched spending reported to the FEC for the spenders themselves over the exact dates covered by each IRS report, but we have also incorporated recipient political spending into the donor profiles, so that users can get a better understanding of how much a donor's grant recipients spent on politics. This information has never been provided anywhere until now.

Here are some of the larger findings that stand out in the new data.

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