Transcript: Eliza Newlin Carney on Citizens United & the influence of Super PACs

Transcript of remarks by Eliza Newlin Carney, Staff Writer for CQ Roll Call, on Super PACs at a panel hosted by the Sunlight Foundation on Jan. 23, 2012:

“Thank you. Thanks to the Sunlight Foundation for having this event.

“Well, in the movie ‘All the President’s Men,” the character known as Deep Throat tells Bob Woodward and Carl Bernstein to follow the money. And even though that was actually not a line from the book – that was something that a screenwriter wrote – it became kind of a rallying cry for generations of people who care about transparency and accountability.

“But I think it’s fair to say that it’s more difficult now to follow the money than it once might have been. And there are a number of reasons for that.

“The truth is transparency has been eroding for some time now. It’s not just because of the Citizens United ruling.

Read more: More money, less transparency in U.S. politics after Citizens United 

“My own view is that the greatest threat to transparency – if you could call it a ‘threat’ – is the increased activism and political engagement of non-profit groups. As I’m sure you guys know, the Internal Revenue Service doesn’t require non-profits to disclose the source of their spending. There are really minimal disclosure and reporting requirements. And that’s probably for very good reason and it dates all the back to the Civil Rights era when the IRS wanted to protect groups that were active in issues like civil rights and protect the anonymity of their donors.

“But nonetheless, beginning with the 527 organizations in 2004, we’ve seen really millions and millions of dollars flow through non-profit groups of different types to be spent in arguably campaign-oriented fashion.

“Now the 527 groups do disclose everything to the IRS so eventually you saw the money and where it had come from.

“With the advent of Super PACs, I would argue that there are a number of new transparency challenges that have been presented. And Super PACs present special transparency problems in my view for three reasons.

“One is the FEC disclosure regulations are arguably incomplete. To some degree, the FEC has basically said that unless a donor earmarks a contribution for a particular campaign expenditure, the organization – the Super PAC – doesn’t have an obligation to report that. So you could theoretically have a donor give money to a group for overhead and say, ‘Well this wasn’t really for a specific ad.’ And so we – the members of the public – wouldn’t necessary know who funded that group even if a lot of the money went to a particular campaign ad.

“And the latest crop of Super PACs have found ways to at least delay reporting their receipts at key junctures. And a great number of them…

“The Super PACs – many of them have decided that instead of reporting on a quarterly basis, they’re going to go to a monthly reporting. This was months into their having formed themselves, which counterintuitively has meant less disclosures right on the eve of these important early GOP primaries. Because when you disclose quarterly, you have to do a pre-primary report. But if you disclose monthly, you don’t have to do that. So by going to monthly, they now will disclose on the 31st of January, and lo and behold a great many primaries will be done by then. So that’s been a challenge.

“The third is the use of non-profits. As I alluded to earlier, a number of Super PACs have established affiliated non-profits.

“The leading example right now is the Crossroads operation. There’s a Super PAC known as American Crossroads, which has an affiliated non-profit of 501(c)(4) social welfare group called Crossroads GPS. These two groups together have predicted that they plan to raise and spend on the order of $240 million in this election, which is actually twice as much as they predicted they would be spending originally. And my guess is that a pretty good chunk of that – maybe half of it, maybe even more – is going to go through the non-profit, which means that we’ll never know where the money came from.

“I shouldn’t say never because journalists have been pretty good actually at finding out the source of a lot of these donors and donations. But nonetheless it’s a lot more challenging and it’s not immediately evident.

“And there’s another trend that has to do with non-profits and Super PACs which is that some Super PACs have actually been accepting donations from non-profits. So, you know, even if the Super PAC discloses and says, ‘Here are our donors, and one of our donors of X million dollars is this non-profit group,’ you still don’t know who funded the non-profit. So that’s really the third transparency challenge presented with Super PACs.

“So it’s not as though following the money is impossible, but it is a lot more challenging than it used to be.

“And I do want to slightly rebut some of the election lawyers I talked to on the eve of Citizens United. Because I would raise questions about transparency, and I was frequently told, ‘Well, Super PACs disclose everything.’ I’m here to say conventional political action committee – every dollar in and every dollar out, if you’re a journalist, you can go and look at. And that’s just not the case with Super PACs. At least not now.”


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3 Comments on “Transcript: Eliza Newlin Carney on Citizens United & the influence of Super PACs

  1. Pingback: Transcript: Paul Ryan on Citizens United & the influence of Super PACs | What The Folly?!

  2. Pingback: Transcript: Allen Dickerson on Citizens United & the influence of Super PACs | What The Folly?!

  3. Pingback: Transcript: Mimi Marziani on Citizens United & the influence of Super PACs | What The Folly?!

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