Today government reform groups put corporations on notice: Try to funnel political donations through entities that can hide them, and expect major public relations consequences.
Occupy Wall Street's Aaron Black speaks, with Tom Edgar (far left) and Bill de Blasio (second to right)
At a press conference in Washington, 15 organizations launched a national campaign to target corporations who try to influence the 2012 election by contributing to 501c4 and 501c6 nonprofits, thereby keeping their donations secret. Non-profits running the gamut from long-standing entitities such as the Chamber of Commerce to newer ones such Priorities USA, organized to help re-elect Barack Obama, are exempt under the U.S tax code from having to disclose their donors. (The reformers also want to stop corporations from donating to super PACs, which do disclose the sources of their corporate contributors, unless they're funneled through a nonprofit or shell corporation.)
Though the tax code makes it impossible to say how much corporate money is going to politically active non-profits, one barometer is the level of giving by organizations — corporations, unions and other groups that aren't organized as political action committees — to super PACs in this year's campaign. A new analysis by the Sunlight Foundation found more than $30 million in donations from organizations, out of a total of $126 million in contributions to super PACs so far.
Some of the largest organizational donors are corporations, such as Contran, a holding company of billionaire mega-donor Harold Simmons; some are politically active nonprofits, such as the Cooperative of American Physicians or American Crossroads. But labor unions are also on the list, led by the AFL-CIO.
At Monday's press conference, New York City public advocate Bill de Blasio — a member of the Coalition for Accountability in Political Spending and a former manager of Hillary Clinton's historic campaign for the New York Senate seat — cited the 2010 boycott of Target after the mega-retailer indirectly made contributions to a candidate opposed to same-sex marriage as the model for what the government reformers are hoping to unleash on corporate political givers who try to hide their donations.
"What happened to Target is child's play compared to the strength that all of these organizations can bring to bear against companies that decide they're going to go against the people's will," said de Blasio. "We're saying to corporate America: Enough is enough. We are not going to stand for our democratic system being overwhelmed by money."
One of the coalition members, Americans United for Change, is offering a $25,000 reward to the first corporate whistleblower who exposes a political donation to a nonprofits.
The methods to influence corporate America will include using the power of state and city pension funds to stop investing in a rogue company, shareholder resolutions, or even legal action, de Blasio said.
Common Cause President Bob Edgar, a former Democratic congressman, said his group will organize rallies at shareholder meetings, push the Securities and Exchange Commission to require public companies to disclose political giving and also advocate that state legislatures require companies to do so.
The speakers appeared at the national headquarters of the Service Employees International Union (SEIU) — which, along with its PAC, has donated nearly $2 million to super PACs so far in the 2012 campaign campaign. But they drew a sharp distinction between union and corporations. De Blasio cited "the sheer mass of money" that corporate America can bring to bear on elections. Ethan Rome, the president of Health Care for America Now, argued that unions are democratic organizations that help workers express themselves rather than profit-maximizing ones. He also brought up disclosure, saying that, unlike corporations, unions have to report every donation over $5,000 to 501c4s in annual reports to the U.S. Department of Labor. The SEIU was not represented at the press conference.
(Jacob Fenton contributed to this story.)