For months, comedian Stephen Colbert has been taking his satire to the field of campaign finance, highlighting how little-known groups can raise and spend unlimited -- and sometimes undisclosed -- funds on election ads. Since early August, Colbert has been raising money through real groups he created and producing ads to support a fake candidate, Rick Parry. (That's Parry with an "A" for America, as Colbert says.)
On his satirical news show recently, Colbert registered a new nonprofit group -- what he called a shell corporation -- explaining that he wanted to attract funds from corporations that want secret ways to support "Parry:"
His segment has gotten mixed reviews from campaign finance experts -- some of whom called it "very illuminating" and others, "disinformation." But as it happens, there's a real candidate who's getting some of the same help from supporters: Texas Gov. Rick Perry, who entered the presidential race just days after Colbert's first pro-Parry ad first ran.
Perry’s allies also just launched a new nonprofit, Citizens for a Greater America, which will also be able to take in unlimited funds while keeping donors secret. iWatch News posted a fact sheet on the new group that it traced to a Perry fundraiser who had received it from Mike Toomey, Perry's close ally and former chief of staff.
The efforts could be the start of a new trend in campaign finance -- nonprofits started by allies of a specific candidate that can be used as conduits for undisclosed donations. Together with those so-called candidate-specific super PACs, the two groups make a powerful pair, allowing supporters to donate to support specific candidates with few restrictions and, if so desired, with no disclosure.
As we explain in our guide to campaign finance, the nonprofit groups, or 501(c)(4)s, can't be primarily involved in politics but can donate to super PACS, and they don't have to publicly disclose their donors. Meanwhile, super PACs must disclose their donors, and they can’t coordinate their spending with candidates’ campaigns, but they can run ads directly in support of candidates and they can take unlimited money. If a nonprofit in turn passes along donations to a super PAC, the original donors, whether an individual or corporation, can stay hidden. (Campaign finance reform groups have filed complaints with the IRS against both Democratic- and Republican-aligned nonprofits, alleging that the groups are violating their tax-exempt status by crossing the line into political activity and partnering closely with their explicitly political sister super PACs.)
Fake Parry and real Perry aren’t the only ones who may benefit from such a setup. Following in the footsteps of Karl Rove’s American Crossroads and Crossroads GPS, former aides to President Obama started Priorities USA Action, a super PAC dedicated to Obama’s re-election, and Priorities USA, an affiliated nonprofit that can funnel donations to the super PAC.
Former Sen. Norm Coleman -- recently named an adviser for the Romney campaign -- also has a nonprofit group, American Action Network, which was the second-largest 501(c) spender in last year’s elections. Coleman’s group, if it so chooses, can have its pick of the several super PACs set up by former Romney aides, including Restore Our Future, the super PAC that Romney seemingly endorsed by speaking at its fundraising events.