Campaign Finance Trend Spotting

With more and more groups getting involved in the political arena, advertising and independent expenditures by outside groups are becoming more common. As they become more common, the candidates under attack are beginning to fight back through complaints to the FEC and state campaign finance agencies. But instead of merely complaining about illegal or unfair activity which is usually legal, complaintants are asking groups to disclose funders of advertising.

The Philadelphia Inquirier reports on the latest effort:

Democratic Senate candidate Robert P. Casey Jr. took his displeasure with $1 million in TV commercials touting GOP Sen. Rick Santorum's record to the Federal Election Commission yesterday, alleging that the group behind the ads was skirting campaign finance laws.

Casey filed the complaint in a bid to force Virginia-based Americans for Job Security to disclose the names of its donors.

This case in Pennsylvania comes on the heels of a similar case in Wisconsin soon to appear before that state's Supreme Court. A push to disclose donors to a non-profit faces a few constitutional hurdles dealing with freedom of association. But if the FEC finds that that activity is an electioneering communication, there may be finding that Americans for Job Security is a political committee requireing registration and reporting, including reporting of contributors. But here's the wrinkle

Americans for Job Security is registered as a 501(c)6 trade group under the federal tax code, a classification that allows limited political activity without disclosing donors as long as that is not its main focus.

Casey's complaint argues that the ads - like much of the group's activities - are "unquestionably for the purpose of influencing" an election, putting the group in violation of its tax status. It should be considered a political action committee, forcing the group to disclose its donors, abide by contribution limits, and provide disclaimers in ads, the complaint states.

If Americans for Job Security had been registered as a 527 organization, they would be reporting activity to the IRS. But as a 501(c) organization they don't have the same obligation. Of course, the question will be whether the major purpose of the group is actually influencing elections, in which case, Americans for Job Security may find themselves in the same boat as Club for Growth, which is currently defending a suit by the FEC for a major purpose matter.
I generally advocate more political activity and less regulation, but the one area where I think campaign finance regulation has done much more good than bad is in the area of disclosure. Making sure political players disclose who is paying for political ads helps voters make informed decisions. If Americans for Job Security is focused on something else, and the FEC/IRS is unable to prove otherwise, they should no more have to dislose their donors than my local church. But if their purpose is political, disclosure is important.

Having said that, it seems that complaints about this kind of activity is likely to grow as more and more groups begin to realize the importance of being involved in political matters.