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With a new set of politically active nonprofits promising to pour millions into ads supporting President Donald Trump’s agenda and cabinet nominees, an FEC decision last month provides a telling reminder of how these groups push the legal limits on their activity — and how difficult it is for regulators to do anything about it.
For the second time in as many months, the Federal Election Commission deadlocked along party lines on whether or not to pursue a politically active nonprofit for its political spending in a single 2016 race.
Conservative Solutions Project, a 501(c)(4) social welfare organization, was founded in 2014, about a year before Sen. Marco Rubio (R-Fla) announced his failed bid to become the Republican party’s nominee for president. In its filings with the IRS and other agencies, the group listed the same address as another similarly named group, Conservative Solutions PAC, a super PAC formed by Rubio allies to support his candidacy.
Though (c)(4) groups like CSP — funded mostly by wealthy donors whose identities are kept secret — aren’t supposed to have politics as their primary purpose, the rules on how much is too much are about as clear as the view through a pair of kaleidoscope binoculars. The IRS has never defined the limits that define “primary purpose,” nor has it ever laid out how to measure it — as a share of overall expenditures, for example, or employee time devoted to a cause. That leaves interpretation up the groups themselves and their most creative, top-dollar lawyers.
Of the more than 6,500 ads that ran in support of Rubio by the end of 2015, nearly 75 percent were paid for by this nominally apolitical nonprofit group, according to a December 2015 Wesleyan Media Project report produced in partnership with the Center for Responsive Politics. Yet, none of that ad spending was reported to the FEC because these ads — all of which targeted viewers in early primary states with positive messages about Rubio’s record and policies — were framed as educational “issue” ads, ostensibly aimed at influencing policy positions rather than the election. Such ads only have to be reported to the FEC if they run within 30 days of a primary election, or 60 days of a general election.
Between July and October of 2015, CSP spent at least $8 million on such ads.
The initial investigation by the FEC’s Office of General Counsel stemmed from a complaint filed by American Democracy Legal Fund, a liberal nonprofit headed by Democratic operative Brad Woodhouse, focusing on two of those ads. According to the complaint, the spots, which ran in September and October in Iowa, New Hampshire and South Carolina, amounted to “express advocacy” and, therefore, should have been reported to the FEC as independent expenditures within days of being aired.
The OGC disagreed with Woodhouse and the ADLF. The ads did indeed have the “look and feel of campaign speech,” the OGC said. And the campaign nature of the ad, “with Rubio orating about the greatness of America and the future leadership the country needs” lent itself to the perception that the ads were aimed at furthering Rubio’s campaign, a perception that was “bolstered by the fact that the ads aired in September and October 2015 in the early primary states.”
But the ads did not ultimately reach the threshold of express advocacy, in the OGC’s view. For one, they make no reference to Rubio’s candidacy — though viewers in those early primary states, where the candidates were racing from Elk’s Club to rec center to diner making stump speeches, would have known Rubio was running.
And if the ads didn’t make a reference to Rubio’s candidacy, they certainly didn’t call on viewers to support him in the primaries, which is express advocacy in its purest form.
The agency’s three Republican commissioners accepted the OGC’s recommendation to find no reason to believe CSP was in violation of the rules, while the two Democrats and one independent on the Commission voted to pursue an investigation.
And mirroring the FEC’s November deadlock in the Carolina Rising case, Democratic commissioners Ann Ravel and Ellen Weintraub provided a statement criticizing their agency’s failure “to enforce clear law on the registration of political committees.”
They contended that “no reasonable person could conclude that the ads were intended as anything other than advocacy on behalf of Rubio’s election.” And just as they did in November, they argued that factors beyond a narrow analysis of the ads’ content further support the idea that CSP was acting as a political committee.
“The Commission has affirmed that the major purpose inquiry is a fact-intensive analysis that may consider a number of elements,” they say, citing a report by the Center for Responsive Politics showing the significant overlap of Rubio staff and consultants working with his campaign, his allied super PAC and CSP itself.
Since Rubio’s presidential aspirations were put on hold, CSP has done little aside from posting links to news articles on its website and social media accounts. It hasn’t run millions of dollars educating viewers around the country about Rubio’s, or anyone else’s, policies.
With the FEC’s investigation at an end, focus now shifts to the IRS, which also has regulatory oversight of politically active nonprofits. The watchdog group CREW filed a complaint against CSP with the IRS, but we may never know what comes of it, because decisions like that are private under IRS rules that protect taxpayer confidentiality.
Now as the Trump movement transitions from campaign to policy platform, at least two nondisclosing nonprofits have been formed to promote the administration’s agenda. America First Policies was founded this week by top campaign aids Brad Parscale, Rick Gates and Nick Ayers. The “grassroots group” will soon “go out there and help with the agenda, help the White House be successful,” Parscale told the AP.
Another group, Great America Alliance, was started by former House Speaker New Gingrich and former New York City Mayor Rudy Giuliani, both prominent campaign surrogates for Donald Trump and previous presidential candidates themselves. Two other Republican strategists, Ed Rollins and Eric Beach, will help run that new group. In 2016, Rollins and Breach ran a pro-Trump super PAC called Great America PAC that spent $23 million to boosting Trump.
Opting to transform a campaign apparatus into a nonprofit supporting the president’s agenda is not new. The Obama administration also turned its campaign into a (c)(4) called Organizing for Action. One big difference: OFA reluctantly disclosed its donors, allowing watchdogs like the Center for Responsive Politics and the Sunlight Foundation to report on the individuals and interests fueling the organization.
Neither of the two new pro-Trump groups have made any such commitment to transparency, which will encourage the arrival of big checks from those who may want to curry favor with the president but remain out of public view. Contributions from foreign governments are also possible, should the group’s leaders choose to allow it.
Meanwhile, Conservative Solutions Project will slip back into the darkness. It could fade away entirely or lay dormant until Rubio’s next potential foray in the presidential arena.
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As pro-Trump nonprofits rev up, regulators stall again
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