Groups ask feds to investigate mystery corporate campaign donations


Election watchdog groups asked the Department of Justice Thursday to investigate whether this year's largest corporate donor to a super PAC  broke the law by hiding the source of the money. They also filed a complaint with the Federal Election Commission.

The groups, Democracy 21 and the Campaign Legal Center, allege that a Tennessee man illegally set up two corporations in the weeks before the election which then donated $12 million the super PAC FreedomWorks for America. The Sunlight Foundation Reporting Group broke news of the donations, which came in a series of installments in the last month before Election Day. They accounted for half of FreedomWorks' take in the 2012 campaign and enabled the tea party-aligned group to make scores of donations to Republican House and Senate candidates. 

In an interview earlier this month with Mother Jones, former FreedomWorks president Dick Armey cited the mystery money as one of the reasons behind his abrupt resignation from the organization.

Democracy 21 and the Campaign Legal Center contend, in a letter to Attorney General Eric Holder, that William S. Rose set up Specialty Group Inc. and Kingston Pike Development LLC  as shell companies to obscure the source of funds they provided FreedomWorks — a move that could make Rose and others liable to civil and criminal penalties. Rose could not immediately be reached for comment, but he earlier disputed that the his companies are primarily political in character.

In a six-page document that he provided to the Knoxville News Sentinel in the wake of news stories about his companies and their political donations, Rose wrote that the Specialty Group was "formed to buy, sell, develop and invest in a variety of real estate ventures and investments." The company is developing land that has been in his family for over 50 years, he wrote, and its business plan includes bankruptcy and reorganization transactions, which Rose says he has been involved with for decades. He described the nature of the business as a "family secret."