In record spending year, millions in election cash not disclosed

NEW YORK On a crisp October morning, a group of high school students taped one dollar bills over their mouths as they approached the Lower Manhattan offices of JP Morgan Chase. Danielle Raskin, a 17-year-old senior at Eleanor Roosevelt High, was among them.

"Those with more money should not have a larger say in politics than the rest of the people," Raskin said. "It frustrates me that these people create policies only for profit and not for the benefit of people, which is not how government is supposed to work."

Raskin and other members of 99Rise, an outgrowth of last year's Occupy Wall Street movement, were at the offices of the nation's largest bank to protest the deluge of political spending bankrolled by undisclosed donors.

While spending by independent political groups on races for the presidency, the Senate, and the House of Representatives topped $1.3 billion this year, according to the Sunlight Foundation at least $300 million was spent by groups that are not required to disclose their donors -- so-called "dark money."

More than 100 dark money groups have been active, and overall, 80 percent of their spending supported Republicans, according to Sunlight's analysis. The top seven non-disclosing spenders backed a conservative agenda -- Crossroads Grassroots Policy Strategies ($70 million); Americans For Prosperity ($35 million); U.S. Chamber of Commerce ($33 million); American Future Fund ($21 million); Americans For Job Security ($16 million); Americans For Tax Reform ($16 million); and American Action Network ($12 million).

The ballyhooed super PACs, which spent at least $625 million by Election Day are registered with the Federal Election Commission and are required to disclose the sources of their unlimited funds. But the dark money groups, registered with the Internal Revenue Service as 501c non-profits or social welfare organizations, do not. (They disclose only expenditures to the FEC).

"I want big companies to say how much they are giving and to whom in these elections," said Jenny Ferreiras, a 17-year-old senior at the Bronx High School of Science, who participated in the protest at JP Morgan Chase. The demonstrators had no specific evidence of bank political donations to dark money groups.

Classmate Carolein Mossel said, "It shows that the one percent can buy politicians, while the 99 percent just sit there and watch."

Mossel and Ferreiras watched as Raskin and two other young women went inside the bank's lobby and staged a sit-in. They held an American flag and a sign demanding greater donor disclosure. After an hour of refusing to budge, the NYPD arrested them.

In Washington a few days earlier, Public Citizen had left gift-wrapped boxes of fake money on the front steps of the U.S. Chamber of Commerce as a mock presents for the Chamber's 100th birthday.

"What the Chamber is doing is taking money from the giant multinationals around the country, laundering it, and then spending it in huge ways in election races across the country," said Robert Weissman, president of Public Citizen. "We don't know which companies are behind this money. Today, we are calling as a first step for the source of that money to be disclosed."

A study by Public Citizen found the Chamber was the top or second-biggest non-disclosing outside spender in 29 of the 35 congressional races where it spent $100,000 or more.

Public Citizen also found 86 percent TV advocacy paid for by all independent groups, were negative attack ads.

Like other watchdog groups, Public Citizen has called for passage of the DISCLOSE Act, which would require all groups that spend $10,000 or more on campaign communications to reveal their donors. The Senate bill died in a Republican filibuster over the summer.

"I think at the very the minimum what we need to is make sure it's all transparent," said Jon Tester, the Montana Democrat who won a close battle Tuesday for a second U.S. Senate term. "So we know who's giving the money."

Tester was subjected to most of the $7.5 million in dark money ads aired in Montana, seen as a linchpin to the Senate majority Senate candidates in Wisconsin, Nevada, Ohio, and Virginia, were hit with millions more - with mixed results.

"I've been told that there's very few people that are making these contributions. Let's find out who they are," Tester said. "I mean, freedom of speech is great, but if we're giving freedom of speech to a hundred people and not the rest of us, that's kind of crazy."

Disclosure, Tester said, would enable targets to defend themselves better.

"Then I can say, 'Hey, this is why X corporation doesn't like me, because I stood up for clean air and clean water' or whatever. The way it is now, there's no way to trace it back," the senator said. "Long term, this is a real threat to our democracy."

To diminish the reliance on big and undisclosed donors, Fred Wertheimer, a long-time campaign finance reform advocate who heads Democracy 21, is promoting the Empowering Citizens Act which would increase public matching funds for donations up to $250.

"Massive amounts of unlimited contributions and secret money provide the opportunity for donors to buy corrupting influence over government decisions on taxes, spending, regulation, health care policy and countless other issues," Wertheimer said.

But Tim Phillips, the president of Americans For Prosperity, which is not required to disclose donors, disagreed that greater disclosure would help.

"We feel like it would have a chilling effect on people willingness to get involved," Phillips said. "We do think a lot of times politicians will seek to get back at them a little bit for opposing their policies."

While not accusing the Obama Administration of maintaining a proverbial enemies list, Phillips said donors, especially from the business world, would rather remain unknown.

"It's pretty easy to make donors opposing you to pay a price with regulations, and agencies can make life miserable for people who disagree with you," Phillips said. "I think there are still a lot of business folks who feel particularly vulnerable to being attacked."

There was a surprising dearth of corporate donors to super PACs, with only 11 percent of their money raised in 2011-2012, about $75 million, coming from companies, according to a joint study by the Center For Public Integrity and the Center For Responsive Politics.

"We have very few Fortune 100 companies, certainly publicly-held ones, that give to AFP," Phillips said.

Americans For Prosperity, which is backed by the billionaire brothers Charles and David Koch, targeted all of its $35 million in express advocacy ads this year against President Obama. One of the most frequently aired ads featured voters discovered in focus groups talking about why they were switching their votes.

What the campaign watchdogs have been unable to track is $40 million Americans For Prosperity has spent on issue education ads that have decried the Obama administration's polices on spending, health care, and green energy. Those expenditures will eventually be disclosed to the IRS.

In all, Americans For Prosperity spent $75 million on media and another $70 million on field operations in 2012, Phillips said. The group had staff in 18 states going door to door, phone banking, and connecting with voters via social media. It held rallies and posted volunteers' photos on its website.

"We give voice not just to donors but to hundreds and hundreds of grassroots Americans that feel they are left out," Phillips said. "We're not some secretive operation."

From Phillips' perspective, outside groups that need not disclose donors are positive addition to the political landscape.

"They dilute the power of political parties, which is a good thing, because parties enforce to much party discipline on both sides," Phillips said. "We give freedom to more members of the House and Senate to do what they think is right, because they know they have someone that has their back."