Checks: Political Money & Democracy

Republican FEC Commissioners Say They Will Crack Down on Shadowy LLCs. But Do They Mean It?

(Photo: Tom Williams/CQ Roll Call)


Three Republicans on the Federal Election Commission who have signaled their willingness to crack down on the growing use of secretive limited liability companies (LLCs) to make campaign contributions will soon be put to the test on the issue.

The FEC faces multiple complaints from watchdog groups regarding the alleged use of LLCs to make large “straw” donations to super PACs. In this election, LLCs are, at an increasing clip, making six- and seven-figure contributions to super PACs supporting Republicans and Democrats alike. In some cases, the LLCs have come into being just days or weeks before making a large campaign contribution.

The FEC also faced complaints about LLCs in 2012, but failed to take action. Some of those LLC donors even admitted to the FEC that they had set up the companies specifically to make a contribution, saying they thought it was legal. The FEC general counsel recommended further investigation in three out of four 2012 LLC cases but the commission deadlocked along partisan lines, failing to investigate further.

On Friday, the FEC’s three Republican commissioners released a 15-page explanation stating that they had decided not to act because the FEC hadn’t given sufficient guidance to corporations on the matter in the wake of the Supreme Court’s Citizens United ruling, which opened the door to corporate expenditures. The GOP statement asserted that it would be “manifestly unfair” to take action against those LLCs.

But in a recent interview with The Washington Post, Republican FEC Commissioner Lee Goodman said LLCs would face FEC scrutiny in the future.

“Six commissioners have now taken the position that closely held LLCs can violate the law under certain circumstances when they make contributions to super PACs,” he said. “Now everyone should be on notice. “If you funnel money through an LLC entity for the purpose of making a political contribution and avoiding disclosure of yourself, that is an abuse of the LLC vehicle.”

But watchdogs with LLC complaints pending before the FEC greeted that comment with skepticism. Some even think last week’s GOP statement explaining the commission’s inaction after the 2012 election could give immunity to all past LLC contributors.

Under the commissioners’ reasoning, the Republicans could justify letting off the hook any player subject to an LLC complaint prior to its Friday statement, says Paul S. Ryan, deputy executive director at the Campaign Legal Center, one of the groups that has complained to the FEC about LLCs.

In fact, Ryan sees the potential for last week’s Republican statement of explanation to open up further loopholes in the law. Campaign-finance lawyers could begin to advise clients who want to make anonymous contributions to use other vehicles on which the FEC also has failed to give clear guidance, like unincorporated associations or limited liability partnerships, he said.

But in the near-term, campaign-finance groups will be keeping a close eye on the FEC, hoping for the best but expecting continued inaction. If the Republican commissioners really want to scrutinize LLCs more closely, as Goodman’s comments to the Post suggest, they will have plenty of chances to do so as the agency mulls a half-dozen LLC complaints from the Campaign Legal Center, Democracy 21, and Citizens for Responsibility and Ethics in Washington (CREW.)

“The standard they have set out appears to be written to be easy to get around, so we will hold off on further judgment until we see them actually taking meaningful action on shadow-LLCs," said CREW Communications Director Jordan Libowitz said in a statement to the Prospect.



Big Money Descends on Big Senate Races

Big money isn’t just pouring into the 2016 presidential race—which is already on pace to break several campaign spending records. The campaign-finance arms race has also driven big money into several contentious U.S. Senate races much earlier than usual.

“Early money is like yeast, or so goes the saying, implying that when you raise and spend big money early, it leads to more campaign cash,” says a new Sunlight Foundation report analyzing the most expensive Senate races so far this election season.

With Democrats vying to retake the Senate, several high-stakes races have already proven to be big-money magnets. Candidate committees, super PACs, and political nonprofits have spent more than $65 million to date on the 10 most expensive Senate races, according to Sunlight’s analysis of FEC filings.

Those races include the Ohio battle for incumbent Republican Senator Rob Portman’s seat, which is so far the biggest of the big money Senate races. Portman faces a formidable Democratic foe in Ohio’s former Democratic Governor Ted Strickland. But Portman is sitting on a $12.7 million war chest, compared to Strickland who only has $2 million on hand.

He also has plenty of help from outside groups, which so far have spent $4.2 million in the race. Much of that is on behalf of Portman, with Republican super PACs and other outside groups like the Koch-funded Freedom Partners and the NRA Political Victory Fund spending millions.

The second-most expensive Senate race is in Maryland, where nearly $9 million has already been spent. Senator Barbara Mikulski’s retirement has turned the Democratic primary race into a heated battle between Maryland Representatives Chris Van Hollen and Donna Edwards. The Democratic primary victor is widely expected to win the general election against the Republican candidate in the dark blue state, which makes the preliminary contest a big-money bonanza for the eventual winner.

Van Hollen has $3.6 million on hand, compared with Edwards’s $300,000. But Edwards has benefited from the outside support of Emily’s List’s super PAC, which has so far spent $2.4 million on her behalf. The National Association of Realtors’ political arm has spent nearly $1 million in support of Van Hollen.

In Wisconsin, the Republican incumbent and conservative darling Ron Johnson is running against former Wisconsin senator and progressive firebrand Russ Feingold. The Democrat has created a successful grassroots fundraising campaign, and with $4.8 million on hand, is slightly outraising Johnson.

Outside spending has been a little more than $750,000, most of it going to attacks on Feingold from the free-market conservative Club for Growth super PAC. However, Johnson has plenty of friends in, and connected to, the Koch brothers’ machine, so Wisconsin may turn into an outside-spending battlefield.

The 2014 elections, which the GOP swept into control of the Senate, attracted the largest-ever amount of outside spending on Senate races. And 2016 is on pace to break that record. As the Prospect’s Eliza Carney wrote earlier this week, the specter of a Trump nomination is likely to drive many big donors to spend on Senate races instead of the presidential race. The Democratic Senatorial Campaign Committee is already outraising its GOP counterpart as the prospect of a Senate takeover has produced big blue fundraising numbers early on.

However, as the Sunlight report notes, the biggest story of the 2016 Senate races will likely be the big money that we can’t see. Undisclosed spending by dark-money political nonprofits is increasing. Moreover, with the Federal Elections Commission and the Internal Revenue Service failing to scrutinize these activities, dark money groups have a green light to play fast and loose with their nonprofit tax status, which requires that they spend the majority of their funds on social welfare.”

Will Disclosure Fight Doom SEC Nominees?

(Photo: AP/Susan Walsh)


The question of whether the Securities and Exchange Commission should require public corporations to more publicly disclose their political spending has emerged as a growing point of contention in Senate deliberations over who should serve on the SEC.

At a Senate Banking Committee hearing this week to consider two potential commissioners nominated by President Barack Obama—Democrat Lisa Fairfax and Republican Hester Pierce—Democrats on the panel called on both candidates to state whether they think the SEC should step up corporate political disclosure requirements.

Senators Chuck Schumer of New York, Jeff Merkley of Oregon, and Robert Menendez of new Jersey all signaled that the nominees would need to be crystal clear that they support the corporate disclosure rule if they want to move forward in the process.

Republicans attached a rider to a federal spending bill last year that explicitly blocks the SEC from implementing the corporate disclosure rule, arguing that a corporation’s political spending is immaterial to shareholders. Democrats have since doubled down on their support for the rule, which they contend is essential to corporate political transparency.

However, both Fairfax and Pierce danced around the controversial issue and did not offer much assurance to Democrats. “I think there is certainly an argument to be made that it is material,” Fairfax said, without committing any further. Pierce, the Republican, punted, saying she would need to examine the details of such a rule before staking out a position.

That prompted Schumer to warn the nominees that he was “leaning against both your nominations” because their answers were unclear.

Senate Democrats have argued that the GOP rider doesn’t keep the SEC from doing preparatory work on the rule, and they have pressed SEC Chair Mary Jo White to take it up—so far, to no avail. Their strategy now seems to be to force nominees to go on the record about the rule, as a means to increase pressure on the SEC to act.

The Senate must now decide whether it wants to consider the SEC nominations on the floor, a process that is sure to be contentious given the prominence of the issue of financial regulations so far in the 2016 presidential election.

Meanwhile, Schumer has indicated that he may follow up with the nominees and insist that they more clearly explain their positions in writing.

“This issue is something that’s risen to such prominence among investors and politicians that it’s no longer appropriate to be vague on this,” says Lisa Gilbert of Public Citizen, an advocacy group that is lobbying for the SEC rule. 

Judicial Spending Blitz in Arkansas Spurs Calls for Reform

(YouTube/Judicial Crisis Network)


A $1.1 million corporate spending blitz that helped defeat two candidates for the Arkansas Supreme Court has prompted the state legislature to call for reforms that would either eliminate judicial elections, ban undisclosed “dark” money in those races, or both.

The two candidates in question, Supreme Court Justice Courtney Goodson and Little Rock attorney Clark Mason were defeated Tuesday after heavy spending by two conservative groups with close ties to the billionaire industrialists Charles and David Koch, and by a variety of corporate interests. The groups lined up against Goodson and Mason in an attempt to shift the state’s high court, which is one of the country’s most liberal, in a more conservative direction.

The calls for reform were noteworthy because they came not just from Democrats, but from the state’s GOP governor, Asa Hutchinson. "Regrettably, a winner in yesterday's campaign was dark money," said Hutchinson at a political event Wednesday. He went on to say that he’d support a ballot initiative that would require state judges to be appointed, not elected, to their positions on the bench.

In response to Tuesday’s election, Democrats in the state’s house and senate called on Hutchinson to place a package of campaign-finance and ethics reform measures on the agenda for the legislature’s special session next month, including legislation to require all outside groups to disclose their donors.

One of the conservative groups behind the ads, the Judicial Crisis Network, is a tax-exempt social-welfare group that isn’t required to disclose its donors. The Judicial Crisis Network alone spent more than $600,000 on the chief justice race, attacking incumbent Justice Courtney Goodson as an insider and a “rubber stamp” for President Barack Obama’s policies, the Associated Press reports. Goodson ultimately lost to her challenger, Circuit Judge Dan Kemp, whom the groups supported for his conservative record.

The network has deep ties with other politically active nonprofit groups, in the past serving as a funding pipeline for the Wisconsin Club for Growth, the America Future Fund, and other groups associated with the Koch brothers.

The other conservative group that spent heavily in the recent judicial race is the Republican State Leadership Committee, a tax-exempt GOP political organization known as a 527 group, which has received funding from business lobbyists and such major corporations as Arkansas-based retail giant Walmart. That group spent more than $500,000 on the chief justice race and on another open-seat race in which it attacked judicial candidate Clark Mason. One attack ad accused him of charging clients high fees, calling him “Clark ‘Ka-Ching’ Mason.” Circuit Judge Shawn Womack, a former Republican state legislator whom the groups backed because of his conservative bona fides, beat Mason.

Judicial watchdogs warn that the judicial spending spike in Arkansas is not an anomaly. Outside spending in judicial elections has more than tripled over the past decade. "The high spending, out-of-state money and harsh attack ads we've seen in this year's Arkansas Supreme Court race make it the latest example of some of the worst trends in judicial elections across the U.S.," Susan Liss, executive director of watchdog Justice at Stake, told the AP.

Thirty-eight states install judges via popular elections, as opposed to judicial appointments. These elections have not been spared from the repercussions of the Supreme Court’s 2010 Citizens United v. FEC ruling, which deregulated independent political spending. In 2013, outside spending in judicial elections reached $10.1 million—accounting for 29 percent of total spending, according to a report from Justice at Stake and the Brennan Center for Justice.


Reform Advocates’ Elusive Goal: Fix the FEC

(Photo: AP/CQ Roll Call/Tom Williams)

Campaign-finance reform advocates hold out zero hope that the current Congress will overhaul the rules, but they have nevertheless unveiled a plan that sketches out their ideal vision for tightening up federal election law enforcement.

On Tuesday, Senator Tom Udall, of New Mexico, introduced a bill that would kill the Federal Election Commission and replace it with a new agency that is “empowered to crack down on campaign finance violations,” according to a statement. A cadre of pro-reform advocacy groups is now calling on other senators to support the legislation, dubbed the Federal Election Administration Act.

“The Federal Election Commission is a failed, dysfunctional agency that does not enforce or properly interpret the nation’s campaign finance laws,” the groups wrote in a letter to U.S. senators this week. “As a result, campaigns, political operatives, parties and independent spenders know they can operate with impunity and without consequences for campaign-finance violations. This has created the modern political equivalent of the Wild West without a sheriff.”

Replacing the FEC with a stronger agency, like a Federal Election Administration, isn’t a new idea. Republican Senator John McCain, of Arizona, introduced a similar bill back in 2007, as did former Wisconsin Democratic Senator Russ Feingold in 2009. Both times, though, the legislation went nowhere.

“I’m not arguing that anything is going to happen overnight,” Fred Wertheimer, who heads Democracy 21, one of the reform groups backing the bill, told the Prospect. “This presents a marker that’s on the table and can begin educating people about how we can reform the FEC. One of the purposes is to start a discussion; you don’t get much attention inside Congress on this issue.”

As the groups wrote, “The legislation addresses major reasons for the failure of the current FEC, including the ineffectual structure and cumbersome procedures of the Commission, the politicization of the appointment of commissioners, the lack of effective enforcement powers and the denial of adequate resources for the agency.”

The new proposed agency would instead consist of five commissioners—appointed by the president—including one chairperson who steers the agency for a 10-year term while the other four officials, theoretically two Democrats and two Republicans, serve staggered, six-year appointments. This design sets out to addresses what critics say is the major pitfall of the FEC: that an even number of Democratic and Republican commissioners is prone to deadlock along party lines.

Additionally, administrative law judges would be responsible for hearing and deciding campaign-finance enforcement cases, eliminating the possibility for potential violations to become embroiled in political infighting on the commission.

Finally, a nonpartisan “blue ribbon advisory panel” would be responsible for recommending commission appointees to the president, a provision that sets out to curtail the politicization of the current FEC nomination process.

Given that Senate Majority Leader Mitch McConnell rabidly opposes bolstering campaign-finance laws, the bill stands little chance of gaining any traction—at least in this Congress. But when a pathway toward reform presents itself, advocates say, they want to be ready.

“We’re going to reach a point where the need for reform is going to be overwhelming and real fights for reform will occur,” Wertheimer says. “When that happens, part of comprehensive reform needs to include overhauling the FEC.” 

DNC Lobbyist Money Gives Bernie More Ammo

(Photo: AP/Jacquelyn Martin)

The Democratic National Committee’s decision to roll back the ban on lobbyist contributions initially imposed by President Barack Obama captures the complicated political money struggle going on between Democratic presidential frontrunners Hillary Clinton and Bernie Sanders.

On the one hand, Clinton may benefit from an influx of lobbyist money to the DNC. Sanders has done far better than Clinton in raising low-dollar contributions from a massive army of donors, a contributor pool that Clinton has struggled to bring in on the same scale. At the same time, the DNC’s decision has given Sanders fresh ammunition in his relentless attacks on Clinton and on “establishment” Democrats for allegedly being in the pocket of Wall Street and special interests.

Sanders has circulated a petition calling on supporters to “tell the Democratic National Committee that you support the restrictions put in place by President Obama that ban special interest contributions.”

The DNC’s decision to undo the ban—which was made completely under-the-radar—plays directly into Sanders’s main criticism of Clinton: Her reliance on special-interest money compromises her message. Sanders has not-so-subtly implied that the DNC is in cahoots with Clinton. A joint fundraising committee that Clinton operates in conjunction with the DNC brought in $26.9 million last year, money that is divvied up between the DNC and the Clinton campaign. Meanwhile, Sanders’s joint operation has yet to get off the ground.

DNC officials have said that repealing the ban was necessary for gaining “the resources and infrastructure in place to best support whoever emerges as our eventual nominee.”

“The DNC has realized that whatever political upside [the ban offered] did not outweigh the financial and political cost of telling people that their money is no good here,” Joseph Birkenstock, who was formerly the DNC’s chief counsel, told the Prospect. “Whatever the difference is—even if it’s just 2 percent—that’s what you’re foregoing.”

“The DNC never liked or agreed with Obama’s policy of removing lobbyists from campaign fundraising,” says Craig Holman, Public Citizen’s government affairs lobbyist. “As we enter the election season in which a new party leader is to be selected, the DNC feels it can shed Obama’s ethics policies and pursue the interests of a new party leader.”

The Clinton campaign has made no pledge to reinstate the ban, something that Francis X. Clines of The New York Times has called consistent with the campaign’s thinking that in the real world of modern political fundraising, it’s futile to engage in symbolic protests in the short-term when so much is at stake politically. As Clines put it, the Clinton camp believes that “they must not ‘unilaterally disarm’ in the approaching ‘dark money’ war with the Republicans in the general election.”

But Holman calls it a “grave irony” that the DNC’s move to accept lobbyist money is only in line with one potential party leader, namely Clinton. Says Holman: “Clearly, the party bosses have picked their favorite and are acting accordingly.”

Business Lobby Fuels Alabama’s Minimum Wage Fight

(Photo: AP/Brynn Anderson)

Well-funded business groups in Alabama are spending millions to help kill a minimum wage hike enacted by the city of Birmingham, prompting outrage from labor organizers who plan a massive rally in the state capitol of Montgomery on Tuesday.

The city-state clash over the minimum wage in Alabama mirrors similar fights around the country that pit cities that have passed pro-worker policies like minimum wage hikes, paid sick leave, and wage theft protections against GOP-controlled state legislatures now pushing so-called “preemption” laws to ban localities from passing certain statutes.

In Alabama, the the city of Birmingham raised its minimum wage to $10.10 an hour in August, up from $7.25. The Republican-controlled House responded with a bill that bans Alabama cities from passing minimum wage laws. Tensions are now running high in Montgomery, as a coalition of fast-food workers and clergy members geared up for a Tuesday rally, and the Birmingham City Council scrambled to fast-track implementation of its minimum wage increase before the legislature enacts its preemption bill.

"We have legislators down in Montgomery who are taking a stance reminiscent of George Wallace standing in the schoolhouse door against equal access to education," Birmingham City Council President Johnathan Austin told

The minimum wage battle has drawn big money in Alabama, which imposes no limits on campaign contributions. The Business Council of Alabama alone gave nearly $1.5 million to Republicans in statehouse races, helping to expand the GOP’s already-strong majority. The group gave $115,000 to the 2014 reelection effort of Republican House Speaker Mike Hubbard, who sets the lower chamber’s political agenda. Hubbard is currently battling 23 felony ethics counts of using his office for personal gain.

The state’s Business Council has made preemption a centerpiece of its 2016 legislative agenda, explicitly stating its support for “legislation that would prevent local governments from setting wage, leave, or other labor policies for private employers at levels higher than those already required by the state and federal governments” and for “fighting efforts to create a state minimum wage above the national minimum wage.” The business group also has an army of at least 11 registered lobbyists pushing its agenda on a day-to-day basis.

In addition to the BCA, an interconnected web of four business PACs—LEG PAC, NEW PAC, MAX PAC, and FAX PAC—spent almost $500,000 in 2014 to “promote candidates who share a common philosophy for pro-industry, pro-development business and education environment in Alabama,” according to state PAC filings. Those PACs also gave six-figure contributions to Hubbard’s campaign coffers.

The well-funded business groups have set out to stop pro-worker policies from spreading to other cities like Tuscaloosa, Mobile, and beyond, pressing state legislators to pass preemption laws that would thwart what the business leaders see see as burdensome local laws.

“The pattern is that opponents of economic populist measures will always go to the state to strip cities of the power to act,” said Paul Sonn, general counsel for the National Employment Law Project, in an interview earlier this year. “You see this most frequently in the South. Typically there’s the veneer of keeping the state regulatory framework uniform. That’s pretty clearly not what’s driving this. It’s naked power politics.”

The business lobby has a lot of friends in the Republican-dominated Capitol. In the 2014 election cycle, business associations contributed almost $2.9 million to local Senate and House races—almost entirely backing GOP candidates—a Prospect analysis of National Institute on Money in State Politics data found.

The push for a local-minimum wage ban is not the first attack on pro-worker policy in Alabama. A few years back, the state legislature passed a preemption law that banned cities from passing laws mandating paid sick leave. The state House also recently passed a bill that would enshrine the Alabama’s right-to-work law, which bars union membership, fees, and dues as a condition of employment, in its constitution.

While Alabama business associations have spent heavily on local elections, they have plenty of company around the country. In the 2014 elections, business associations contributed a combined $12.7 million to state legislative campaigns—including heavy investments in Southern states where pro-business policy glides most easily through legislatures. Business spending has also been heavy in former industrial Midwest states like Illinois, Indiana, Michigan, and Missouri, where conservative groups have invested in shifting state control from blue to red.

Expect those numbers to grow exorbitantly in the 2016 election cycle as more blue cities continue passing progressive policies, despite operating in often-hostile red states.  

Pro-Shelby Super PAC: 'People Power' or 'Dark' Money?

(Photo: CQ Roll Call/Bill Clark)


The Alabama Senate primary race between incumbent Republican Senator Richard Shelby and challenger Jonathan McConnell has seen an unexpected surge in outside spending—an influx that spotlights the growing role of undisclosed “dark” money in 2016, even in super PACs that supposedly must report their donors.

Citizens for a Sound Government, a political nonprofit that doesn’t disclose its donors, funneled $400,000 in January to a super PAC that’s supporting Shelby’s re-election bid, according to the Montgomery Advertiser.

Citizen Super PAC, as the group is called, is run by a group of former Senate Republican political operatives and has so far spent more than $300,000 on ads supporting Shelby. The group has also shelled out $50,000 on ads opposing Shelby’s toughest GOP primary contender, McConnell, a conservative Birmingham businessman who is running as a political outsider.

Ironically, the super PAC brands itself as a vehicle to amplify the voices of average citizens.

“Transparency is one of our founding principles. It’s why we created the first platform that gives the American people the power to sponsor political speech directly,” one of the super PAC’s cofounders told the Montgomery Advertiser. But the Advertiser reported that the “PAC had received no online pledges to help finance the Shelby ads.”

But none of the $400,000 that came to the PAC Citizens for a Sound Government can be traced, and a big chunk of the super PAC’s receipts—$100,000—comes from a corporate PAC dubbed New Generation, which has direct ties to coal behemoth Murray Energy Corporation—hardly a mouthpiece for average citizens.

For its part, Citizens for a Sound Government has spent $413,000 on its own ads commending Shelby for opposing President Barack Obama’s executive action to require criminal background checks of gun buyers, according to the Advertiser. The group’s website says that its goal is “to promote policies that create a strong environment for job creation, enhance personal freedom, and generate fiscal responsibility.”

It’s not the only group backing Shelby with undisclosed money that has ties to prominent Republican operatives. As the Montgomery Advertiser reported earlier this week, One Nation, a group with ties to Karl Rove, spent $140,000 on radio ads supporting Shelby’s opposition to Obamacare and to admitting Syrian refugees into the U.S.

Shelby is facing his first serious primary challenge since he took office in the 1980s, and the prospect of an insurgent outsider ousting a prominent Republican senator has attracted unprecedented levels of outside support for his re-election—so far nearly $900,000, according to the Center for Responsive Politics.

Dark-money spending has already reached record levels in the 2016 cycle, and experts expect that more is on the way. What’s noteworthy about Citizens for a Sound Government’s early investment in the Alabama Senate race is that it illustrates how super PACs, which theoretically are subject to full disclosure, can be used to obscure political funding sources.  


Watchdog Group Sues FEC Over Crossroads GPS

(Photo: AP/Lawrence Jackson)

The watchdog group Citizens for Responsibility and Ethics in Washington (CREW) has filed suit against the Federal Election Commission, alleging that the agency violated election laws when it dismissed a CREW complaint against Crossroads GPS, a conservative political operation masterminded by GOP operative Karl Rove.

The lawsuit asks the court to refute the FEC’s dismissal—which was due to a 3-3 partisan split over whether or not the commission should take action—and order the FEC to do its job. In the suit, CREW accuses the FEC of violating the Federal Election Campaign Act, the post-Watergate reform law that formed the agency to begin with.

At issue is whether Crossroads GPS is a political organization or a legitimate 501(c)(4) social welfare group. Since its inception, Rove’s GPS group has branded itself a “social welfare” nonprofit. These groups are not required to disclose their donors, but under tax laws they may not engage in politics as their “primary purpose.” But IRS regulations are murky, and CREW alleges that GPS has taken advantage of loopholes in the law. Crossroads GPS has spent $100 million dollars—all undisclosed—in the past six years, mostly on attack ads.

Back in 2012, CREW filed a complaint with the FEC alleging that Crossroads GPS violated election laws when it raised $6 million specifically to support Republican Josh Mandel’s unsuccessful Ohio Senate bid without disclosing its donors. Campaign-finance laws require that organizations disclose their donors when contributions are spent on political activity.

Other campaign-finance watchdogs have challenged Crossroads GPS in FEC complaints, to no avail. The Campaign Legal Center and Public Citizen sued the agency in 2014 after it also dismissed the groups’ complaint arguing that the commission should act on evidence substantiating that GPS is a traditional political committee.

“It’s a shame that we have to take the government to court for not doing something it was put in place to do,” CREW Communications Director Jordan Libowitz told the Prospect in an interview. “It shows a pattern [regarding the FEC’s partisan gridlock] that so many groups have resorted to lawsuits.”

The FEC isn’t the only government agency that reformers say has failed to hold Crossroads GPS to the standard of law. CREW’s lawsuit comes just a week after news broke that the Internal Revenue Service had officially granted GPS tax-exempt status as a “social welfare” nonprofit.

As Robert Maguire meticulously detailed for the Center for Responsive Politics, Crossroads GPS’s lawyers essentially waged a multi-year war of attrition until the tax agency finally granted the group exemption.

In the case of the FEC, its own general counsel had found likely wrongdoing on GPS’s behalf, but due to its partisan deadlock the commission failed to find a consensus to even consider taking action. FEC rules bar the agency from taking action without at least four votes.

Having found no relief from the FEC or the IRS, reform advocates have also asked the Department of Justice’s tax division to crack down on Crossroads GPS. But the division has signaled no plans to wade into the troubled waters of political regulation.

To CREW and other reformers, federal regulators’ failure to act signals that more dark money spending lies ahead.

“Between the FEC refusing to act in this case and the IRS granting Crossroads GPS nonprofit status, the government has allowed Karl Rove and company to get away with entirely too much improper secret political activity,” said CREW Executive Director Noah Bookbinder.

The Makings of a New Democracy-Reform Coalition?

(Photo: AP/Susan Walsh)


A broad coalition of 160 civil-rights, pro-democracy, and other progressive organziations have announced plans for an ambitious Democracy Spring campaign that will culminate with a massive rally and sit-in at the capitol in April.

The campaign includes a 140-mile march that is scheduled to kick off on March 2 from Philadelphia to Washington, D.C., in the name of ending big money in politics, restoring the right to vote, and guaranteeing free and fair elections. Organizers say the campaign is designed to pressure a corrupted Congress to take any type of action on reform—admittedly a tall task.

Already, 2,000 individuals have committed to joining the march, including such prominent democracy advocates as progressive activist Mark Ruffalo; Harvard law professor and reform advocate Lawrence Lessig; and New York congressional candidate Zephyr Teachout. Marchers will call on Congress to pass a viable campaign-finance reform bill.

The rally’s mobilization campaign will kick off on March 1 with a “tele-town hall” featuring the heads of the NAACP, the Sierra Club, and former Labor Secretary Robert Reich, among others. (Reich is a co-founder of The American Prospect.)

Organizers have dubbed the scheduled sit-ins and rallies on the capitol April 16-18 a "Democracy Awakening." The event brings together players in the progressive movement who often work on parallel tracks but not always in unison, most notably civil-rights and campaign-finance reform advocates. In addition to the usual political money reform suspects, the campaign brings together environmental advocates, religious groups, civil-rights organizations, and labor unions. Participating groups include, the NAACP, and the Communications Workers of America, who have all committed their support.

Diverse players have come together “to really try to build a deeper and broader democracy movement,” says Public Citizen President Robert Weissman. “While the communities are mutually supportive, we have never done anything jointly on this scale.”

It’s part of a deliberate strategy to broaden the focus of democracy reforms beyond money-in-politics to address voting rights and redistricting as well. A report released this month by reform groups like Public Citizen and Common Cause titled “Our Voices, Our Democracy” specifically articulates the need to work across party lines and diversify the democracy reform tent at both the state and federal levels.

This push for a broader reform coalition comes on the heels of President Barack Obama's call in his State of the Union speech for renewed public dedication to bolstering democracy, specifically through campaign-finance, redistricting, and voting reforms.

“Protecting voting rights and pushing for money in politics reform are two sides of the same coin,” Marge Baker, executive vice president of People For the American Way, said in a statement. “When people face barriers to casting a ballot, and when wealthy special interests can overpower the voices and priorities of everyday Americans, our democracy simply isn’t working.”