Political Campaign Finance Disclosure—by Accident

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July 7, 2012; Source: New York Times

At the same time that the president of Aetna, the Connecticut-based insurance company, was speaking on the record in favor of President Obama’s health insurance reform legislation, his company gave more than $3 million to the American Action Network (AAN). Self-described as a 501(c)(4) “action tank” and chaired by former Minnesota Republican Sen. Norm Coleman, one of AAN’s main goals is to overturn the Affordable Care Act. You might be shocked to find corporations using (c)(4)s for that purpose—but only if you haven’t been watching the perverse use of 501(c)(4) social welfare organizations by big money interests to engage in partisan political campaigning for the last two years.

The two Times reporters on this story, Mike McIntyre and Nicholas Confessore, identify several similar operations that are funneling corporate donations to oppose Obama administration initiatives and policies, including American Electric Power’s $1 million donation to the Founding Fund (which favors limited government) and the likes of Prudential Financial, Dow Chemical, and Merck, which have been funneling millions to the U.S Chamber of Commerce, which has been very critical of President Obama and is expected to fund anti-Obama advertisements.

If the donations are secret, how is it that McIntyre and Confessore got the information on these corporate (and sometimes labor union) behemoths? Sometimes the donors report their contributions elsewhere by mistake. For example, the American Federation of State, County, and Municipal Employees (AFSCME) gave $100,000 to a group called Advancing Wisconsin, but the information only appeared in a report AFSCME filed with the U.S. Department of Labor. Aetna’s donation to AAN plus another multi-million dollar contribution it made to the Chamber was mistakenly reported by Aetna in a filing with insurance regulators. American Electric reported its donation to the Founding Fund as a legitimate business-related lobbying expense, though the Fund then noted that it does no lobbying.

Some corporations “voluntarily” disclose their contributions, though the voluntary aspect is often compelled by shareholder actions. However, sometimes even those shareholder actions allow corporations not to reveal their donations to 501(c)(4)s.

“Companies want to be able to quietly push for their political agendas without being held accountable for it by their customers,” Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, told the Times. “I think the 501(c)(4)’s are likely to outweigh super PAC spending, because so many donors want to remain anonymous.” Shouldn’t political campaign finance reporting require disclosure that occurs by some manner other than catching corporations making reporting mistakes?—Rick Cohen