Who's Paying For What? Washington Takes Aim at Secret Political Money

As election draws near, efforts to unveil secret political money Washington are increasing.

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In the election cycles since the 2010 Citizens United Supreme Court decision transformed campaign finance, Super PACs with well-known mega-donors and vaguely reassuring names initially stole the show. But recently that attention seems to have shifted another issue: disclosure.

Uncovering anonymous money has become a priority, especially for Democrats.

[Analysis: Most Outside Spending in Politics Comes from Unknown Sources]

The Democratic Senate's campaign committee filed a complaint Monday with the Federal Election Commission in the name of disclosure. The complaint alleged that three conservative nonprofits were violating campaign finance law by dedicating themselves to politics while also hiding their sources of funding.

That complaint mirrored one filed by President Barack Obama's campaign last month, which demanded the FEC require Crossroads GPS, one of the nonprofits targeted in the DSCC complaint, to reveal its donors.

Just a week after the Obama campaign's complaint was filed, the Internal Revenue Service, which oversees the tax codes that allow for donor secrecy, began a review of Crossroads and other tax-exempt nonprofits. The IRS sent a questionnaire to such groups to determine if they are spending too much on partisan politics to identify as tax-exempt organizations, the Wall Street Journal reported.

The complaints are all attempts to shine light on the most prolific source of outside political cash: 501(c) nonprofits that organize as "social welfare" or "business leagues," which allow them to keep their donors secret. They've spent much more than Super PACs, which can raise and spend unlimited amounts, but most disclose their donors. They also overwhelmingly support conservatives – for every dollar these groups spent in the 2010 election, 82 cents benefitted Republicans, according to the Center for Responsive Politics.

The emphasis on lifting the veil hasn't been limited to political nonprofits.

On the same week the Obama campaign filed its complaint, the White House addressed another disclosure hole. The Office of Management and Budget issued an order requiring information on political TV ads be posted online by Aug. 2.

[White House Orders Political Ad Info To Be Posted Online]

Previously, information on political ads was technically available, but nearly impossible to compile, and as much as two-thirds of all political advertising went unreported. Now, important information on any political ad appearing in the 50 largest TV markets—who paid for it, how much it costs, how often it ran—will be posted on the Federal Communications Commission's website.

It's unclear why political spending disclosure has suddenly become a point of contention, especially when many of the actions take months or years to resolve. Neither the FEC complaint nor the IRS investigation will be finished in time for this fall's election. Bob Biersack of the Center for Responsive Politics, and formerly of the FEC, says the timing is due to both the state of campaign finance law and the upcoming election.

"The more the system gets opened up, the more impact those remaining restrictions have. So if disclosure is the only part of the regulatory system left that's what people are going to work off of," says Biersack. "One the other hand, if they raise these issues and they become issues in the public, then maybe they can get the right side of the issue…it might have political implications."

Addressing disclosure is also more attainable than attempting to reform the whole system, says Mary Boyle, vice president of communications at open government group Common Cause.

"It's an immediate remedy that's politically realistic," she says. "Both sides of the aisle have historically been in favor of disclosure."

The DISCLOSE Act, a bill that would increase disclosure requirements for corporations, may have some bipartisan backing, Boyle says. The bill passed the House in 2010 before dying in the Senate. Newer versions were introduced in both chambers this year.

Seth Cline is a reporter with U.S. News and World Report. Contact him at scline@usnews.com or follow him on Twitter.