National Press Club

Campaign finance reporters discuss ways to uncover secret money

September 15, 2016 | By Herb Jackson |

Campaign finance reporters discuss covering secret money at Club program.

Campaign finance reporters discuss covering secret money at Club program.

Photo/Image: Noel St. John

A growing share of the money influencing elections for federal, state and local office is going through groups that do not disclose their contributors, and Congress right now is movig toward requiring less disclosure rather than more, a panel of campaign finance reporters said at a Sept. 13 National Press Club program.

“It has required us as reporters to develop new techniques to try to find this money,” Ken Vogel, chief investigative reporter at Politco, said at an event sponsored by the National Press Club Journalism Institute and the club’s Professional Development Committee.

Vogel described him trying to dress as a wealthy donor to sneak into conferences organized by a network funded by energy billionaires Charles and David Koch.

“Some donor seminars are now a little more open to the press,” Vogel said. “I always find the bars at the hotel late at night are the best places to go. You sit there, get a chardonnay or a Miller Lite, and just eavesdrop.”

Fredreka Schouten, campaign finance reporter for USA Today, said that even money required to be disclosed, such as donations to candidates, political parties and super political action committees, may not be as transparent as they could be.

Contributions sometimes come from limited liability corporations that appear to be created as pass-throughs to conceal the original donor’s identity, Schouten said.

She described finding a large LLC contribution on deadline and having to search state corporate registry databases for clues to the corporation’s principals. She also said she will search the LLC's address on Google and in contribution databases to see if other entities at the same location made donations.

“There’s not a lot of enforcement, and that’s especially true since the IRS imploded over its handling of Tea Party group applications starting in 2013,” said Peter Overby, the power, money and influence correspondent for National Public Radio. “It seems like they’ve just kind of thrown in the towel.”

Nonprofits have to make their tax returns public, but if they take advantage of all the extensions available to them, those disclosures happen almost a year after a campaign has ended. And while the nonprofits must disclose their donors to the IRS, that part of the tax return is not publicly released, and the House recently passed a bill to prohibit the IRS from even collecting that information.

“We’ll probably move further away from disclosure before we see a greater legal requirement for disclosure,” Vogel said. He said that while polls show the public would like to see more disclosure, it is not one of the top issues that drives their votes.

Overby said that watching the way money is flowing in the 2016 campaign, it appears that there is extensive effort to create systems that “move money along to strip donors’ names away so it can be spread out where it’s needed or concentrated, like artillery batteries, on a particular target they need to hit.”

Nonprofit spending on ads that support or oppose a candidate are disclosed in the weeks before an election, but only the amount spent and the candidates targeted, not the donors funding the effort. But if the ads do not specifically urge a vote for or against someone, they may not be disclosed.

But those ads may be reported by the television stations that air them to the Federal Communications Commission, which has its own disclosure website, Vogel and Schouten said.

Vogel said these documents can be revealing, because a group that may have said its ads were not campaign-related and therefore not reported to the FEC could slip up and say on a television contract that the ad was designed to attack a candidate.

Overby said some campaign finance regulators at the state level have gotten more aggressive about requiring groups to disclose funding sources, and that could be a source for information not available from federal agencies, but it varies widely.

Vogel said litigation, such as a fight between two people involved in a dark money group or a divorce involving a wealthy donor, is another way for important revelations to come to light.

“Savvy people who want to keep their names off of things usually find a way to do it,” he said.