Analysis: Most Outside Spending in Politics Comes from Unknown Sources

Nonprofit groups that don't disclose their donors, not Super PACs, responsible for most political spending, analysis finds.

No major announcements are expected when the Fed's latest two-day policy meeting ends Wednesday.

No major announcements are expected when the Fed's latest two-day policy meeting ends Wednesday.

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No one knows where a majority of the money in federal elections in the last two years came from.

Secretive nonprofits that don't disclose their donors are responsible for this, having spent significantly more than Super PACs on elections in the 2010 elections, according to the Center for Public Integrity and Center for Responsive Politics.

Nonprofits have spent $95 million on elections in 2010, while Super PACs, which are required to disclose their donors, have spent $65 million, the Centers found.

[Read: Vast Amounts of Political Ad Spending Goes Unreported]

Current campaign finance law allows Super PACs to raise and spend unlimited sums of money for political causes as long as they disclose the sources of their donations. However, nonprofits organized under 501(c) of the tax code, so-called "social welfare" groups and other nonprofits, can raise and spend unlimited sums on politics without revealing their donors — as long as politics isn't their primary purpose.

As long as these social welfare groups can prove that politics isn't their primary purpose, they can spend as they please, without ever revealing where their money came from.

Such groups are overwhelmingly conservative, having spent $78 million in 2010 — five times more than liberal ones, which have spent $17 million, according to CPI and CRP.

In many cases, these social welfare groups funnel money to Super PACs, who then only report the nonprofit itself, not its donors. In this scenario, anonymous donors give money to a 501(c) group, which then gives money to an often-related Super PAC, which only reports the money as coming from a 501(c) group, keeping the donor's identity hidden.

For example Foster Freiss, the Wyominng businessman who funded Rick Santorum's presidential campaign, said recently he would support Romney through 501(c) groups.

"Well I'm going to do that more undercover, I'm going to do it through a lot of c4's so it's not so high profile," Friess said at the Faith and Freedom Conference.

"If you give to a c4, it doesn't get disclosed," Friess said. "So if I give money to various organizations, nobody knows what I'm giving. Even my wife won't know."

[Read: Sheldon Adelson Willing to Spend $100 Million to Beat Obama]

Not only do 501(c) groups not reveal where their money came from, they often don't disclose how they spend it. Often these groups air "issue ads," which don't explicitly tell viewers to vote for anyone but push a political message. As long as these ads don't air within 30 days of a primary or 60 days of an election (which is most of the time), they go unreported.

By some estimates, about two-thirds of all political ad spending goes unreported. Which is to say, if you see an ad and live somewhere with no upcoming elections, there's a good chance the group behind it did not disclose the ad itself, nor the source of the money that paid for it.

Seth Cline is a reporter with U.S. News and World Report. You can contact him at or follow him on Twitter.