Super-Rich Give Big to Smear Groups

In this update: 1. “527s” raise record cash from tiny cadre of Wisconsin donors 2. Report on “new judicial politics” opening eyes Super-Rich Give Big to Smear Groups

Email date: 8/17/10

In this update:
1. “527s” raise record cash from tiny cadre of Wisconsin donors
2. Report on “new judicial politics” opening eyes

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“527s” raise record cash from tiny cadre of Wisconsin donors
The Democracy Campaign issued a report today showing that so-called “527” groups raked in over $1.3 million from 266 Wisconsin contributors in the first half of the year. The top five givers supplied nearly two-thirds of the money. Additional thoughts on our findings were podcasted this morning and can be heard here.

Record fundraising by these outfits is no doubt attributable in part to the fact that Wisconsin is seeing its first wide-open race for governor in 28 years and that both houses of the Legislature are up for grabs. But a January ruling by the U.S. Supreme Court in Citizens United v. FEC allowing unlimited corporate and union spending on elections clearly factors into the equation as well. Donors could give as much as they wanted to 527s before that decision, but the groups could not spend unlimited amounts on direct electioneering. Now they can.

The money identified in our analysis is only part of what is being raised by mostly out-of-state advocacy groups to fund campaign ads in Wisconsin. The groups we focused on get their name from the section of the Internal Revenue Service code under which they are organized, and they are required to disclose their donors to the IRS. Even more money is being raised by advocacy groups organized under section 501(c)(4) and trade associations under section 501(c)(6). Those organizations do not have to report donations to the IRS or any other government agency.

State rules aimed at requiring disclosure of election spending and the sources of money fueling it were to take effect August 1, but are now tied up in court. Even though a federal court had already exercised jurisdiction and starting hearing the case, Wisconsin’s Supreme Court stepped in to block enforcement of the new rules by imposing a temporary injunction. This is a departure from a legal principle known as comity, which discourages multiple courts from simultaneously considering the same issues.

In a dissenting opinion joined by two other members of the high court, Justice Ann Walsh Bradley took the four-member majority to task on this point, writing that “the majority here turns a blind eye to the rule of comity and ignores any consideration of it. Given that another court has already exercised jurisdiction and held hearings on the case, most courts would at least pause to consider the rule of comity. Unfortunately, in a rush to judgment, this court fails to even mention the rule of comity let alone honor it.”

Wisconsin Public Television has twice aired discussion of the controversy surrounding the state’s new disclosure rules on its “Here and Now” program. You can watch these 7-minute segments by going here and here.

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Report on “new judicial politics” opening eyes
Media outlets close to home and far away are taking note of how Wisconsin figures prominently in the new report issued yesterday by a trio of nonpartisan national policy groups. The findings prompted coverage in newspapers ranging from The Washington Post to the Milwaukee Journal Sentinel.

The Democracy Campaign’s director is quoted on page 48 of the report commenting on the role outside interest groups are increasingly playing in state Supreme Court elections: “Not only does the law allow independent groups to operate like Swiss banks, it allows them to effectively take the ‘r’ out of free speech.”