Sunday, November 11, 2012

Koch's Americans for Prosperity Returns to "Issue" Ads

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By Brendan Fischer

After a court decision in March required nonprofit groups running phony "issue ads" to disclose their donors, David Koch's Americans for Prosperity (AFP) shifted to ads expressly calling for President Obama's defeat in the November 2012 elections. At the time, they claimed the change in tactics was only because the president's record was "disastrous," but now that the decision has been overturned and AFP can again run issue ads while keeping their funders secret, they have reverted to their old strategy. Is it because the group no longer thinks the president's record is "disastrous?"

In March 2012, a federal court in VanHollen v FEC closed a loophole in federal campaign law and required nonprofit groups making "electioneering communications" -- issue ads running within 30 days of a primary and 60 days of a general election -- to disclose all donors of more than $1000. In response to the decision, dark money groups like AFP, Crossroads GPS, and the U.S. Chamber of Commerce stopped their "electioneering communications" and began running "independent expenditures" that expressly call for the election or defeat of a candidate.

In August, AFP Director Tim Phillips said the change in tactics was not to hide their funders, but because "given the president's disastrous record, we felt this was necessary." AFP spent around $30 million on independent expenditures over the summer.

This strategy allowed AFP and others to keep their donors secret under election law but potentially raised new issues under the tax code, since nonprofits are not supposed to have election activity as a primary purpose. In recent years, AFP and other nonprofits have avoided running afoul of the IRS by classifying their electioneering communications as "education," "lobbying," or "issue advocacy," rather than political activity. But as CMD reported, "once they shift to express advocacy" -- meaning the ads include an express call to vote for or against a candidate -- "they can no longer claim the ads are anything but political," says Lloyd Hitoshi Mayer, an associate dean and law professor at Notre Dame Law School. This would make it harder for these dark money groups to continue the charade that they are anything but political organizations disguised as nonprofits.

On September 18, 2012, the DC Court of Appeals reversed the Van Hollen decision and re-opened the door for nonprofits to air issue ads while keeping their donors secret. And AFP, Crossroads GPS, the U.S. Chamber and others have all returned to running issue ads.

Did AFP begin airing issue ads again because they no longer think Obama's policies are "disastrous?" Of course not. They are just doing whatever it takes to hide from the American people the identities of those who are trying to buy our elections.

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