The State Government Leadership Foundation’s application for nonprofit status turned out to be a goldmine. Because the IRS had initially rejected it, the group was forced to file an appeal. It ended up submitting nearly 300 pages of additional documents—including a list of seed-money donors. Those documents are now public records. And, as Elliott reported last week, they show that some of the nation’s biggest corporations, including Exxon, Pfizer, and Time Warner, put “up at least 85 percent of the $1.3 million the foundation raised in the first year and a half of its existence, starting in 2003.”
It’s important to note that these records don’t tell reporters nearly us much as we’d like. We don’t know, for example, whether the same set of donors who backed the group nearly a decade ago also funded the Republican cause in the redistricting battles in North Carolina and elsewhere. We don’t know who made the anonymous $1 million donation to the foundation recorded on its 2011 IRS forms, which are posted on ProPublica’s site—or any of the other donors whose cash gave new life to the foundation after it lay dormant in the late 2000s.
Still, what ProPublica dug up is noteworthy. Campaign finance buffs have long speculated that publicly traded companies would funnel their political donations through dark-money groups to avoid a backlash from customers and shareholders, but there is little proof that they have actually done so. And the bulk of super PAC cash in 2012 came from wealthy individuals, many of whom backed losing candidates—all of which has led many Beltway denizens to opine that the fuss about outside groups was overblown. Elliott calls his recent findings “one tiny, tiny piece of evidence that confirms that speculation that big public companies are—or at least were—actively financing these groups that are engaged in politics, defined broadly.”
His and his colleagues’ reporting also show just how disruptive outside money can be, especially on the state level, where there is less public scrutiny and even modest sums can have a big impact.
Unfortunately, the reporting techniques that yielded these insights won’t work wonders every time. The North Carolina case provided unusually rich detail about the role of outside groups and dark money in the redistricting process. And Elliott says it’s “incredibly rare” to get so much information about a dark-money group from the IRS. The donor records were available in this case only because of the group’s lawyer had volunteered them as part of the protracted appeal over the foundation’s nonprofit status.
In the end, this episode says as much about the obstacles reporters face when covering the murky new world of money and politics as it does about corporate cash or gerrymandering. “A lot of people argue that the new congressional maps in North Carolina and other places hurt voters in the aggregate and are a distortion of democracy,” Elliott said. “I think people should know how exactly that happened….But there’s only so much we can tell them. It’s one those Rumsfeldian ‘we don’t what we don’t know’ situations.”
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