8 Secretive Groups Whose Money Is Running The 2012 Election

By Aaron Crowe
November 06, 2012

By now, you've probably had your fill of political advertising. The story behind those ads that's new to this presidential election year centers on those unfamiliar names at the end of the commercials -- who's funding these messages anyway?
 
It's not your campaign contributions that are funding these. In fact, your dollars are likely being overwhelmed by an absolute flood of money from outside groups -- many of which don't have to say where their money comes from.
 
Campaign funding is markedly different this year than it's been in the past. The amount of outside spending has more than quadrupled since 2004 to more than $1 billion today. While the U.S. Supreme Court can't be blamed for the flood of negative political ads paid for by groups that don't fully disclose their donors, the justices did open the door -- widely -- in a January 2010 decision (Citizens United v. Federal Election Commission) permitting corporations and unions to make political expenditures from their treasuries directly and through other organizations as long as the spending is done independently of any candidate.
 
Almost all of this so-called shadow money is spent on negative ads directed against Democrats, according to the Center for Responsive Politics' OpenSecrets.org. (There is some shadow money spent against Republicans, the Center's data shows, but it's far less than is spent against Democrats.)
 
Super PACs and special interest groups such as American Crossroads and its affiliates -- which the Center for Responsive Politics says leads all "multicandidate outside spending groups" with $175.8 million in expenditures -- are paying for such attack ads more and more. And they are outspending political parties with donations from corporations and individuals.
 
"In many cases, the activity takes place without complete or immediate disclosure about who is funding it, preventing voters from understanding who is truly behind many political messages," according to OpenSecrets.
 
Without knowing who's behind the ads, consumers don't know how self-serving the request is to sway their vote. This issue came up when a California judge heard a case on an anonymous $11 million donation to fund political ads, which is likely the state's single largest political contribution from an undisclosed source. Just last week, the judge ruled the Arizona organization that gave the money must turn over documents to a campaign finance watchdog to determine if the group broke any laws, according to the Contra Costa Times.
 
"The Court finds that irreparable harm has occurred and continues to occur as each day passes, and voters continue to cast their votes without information that may influence their votes," Sacramento County Superior Court Judge Shelleyanne Chang wrote in her decision.
 
In addition to super PACs and regular political action committees, special interest groups can form "527 organizations" and 501(c) nonprofit operations that must register with the Internal Revenue Service and may engage in political activities as long as the activities don't become their primary purpose. Unlike 527 organizations, 501(c) groups aren't required to publicly disclose their donors.
 
The amounts raised by these groups range from nearly $176 million by the top group to a mere $8 by the last-ranked group. Here are the top eight with partial to no disclosure of donors, listed by the amount of money spent on independent expenditures -- ads that urge votes for or against a candidate -- in federal elections in 2012.
 
American Crossroads/Crossroads GPS: $175,808,214
Partial disclosure of donors
 
This conservative group was started in consultation with GOP operatives Karl Rove and Ed Gillespie. American Crossroads is a super PAC, and GPS is a 501(c)4 that isn't required to disclose its donors.
 
Priorities USA Action: $67,496,077
Partial disclosure of donors
 
The group discloses a partial list of donors and is the top liberal super PAC supporting President Barack Obama's re-election bid. It was founded in 2011 by two of Obama's former White House aides, Bill Burton and Swan Sweeny.
 
Americans for Prosperity: $36,637,591
No disclosure of donors
 
Founded by oil billionaire David Koch and Richard Fink -- a member of Koch Industries' board of directors -- this conservative-leaning PAC and 501(c)4 funds Republican candidates.
 
U.S. Chamber of Commerce: $36,177,667
No disclosure of donors
 
This conservative 501(c)6 is a lobbying group for businesses and other industry associations. In 2011 it was the biggest spender among organizations that were not national party committees. It generally supports Republicans and opposes Democrats. This election cycle it started sponsoring ads that overtly urge people to vote for or against a candidate.
 
House Majority PAC: $30,735,096
Partial disclosure of donors
 
This group's ultimate goal is to have a Democratic majority in the House of Representatives, and various unions are among its main sources of funding.
 
American Future Fund: $24,986,522
No disclosure of donors
 
This conservative-leaning nonprofit group is not required to disclose its donors because it is a 501(c)4. Its stated purpose is to fund candidates who support "conservative principles that sustains free market ideals focused on bolstering America’s global competitiveness across the country."
 
FreedomWorks: $19,103,569
Partial disclosure of donors
 
"Lower Taxes. Less Government. More Freedom." is the motto that guides this conservative nonprofit, which -- like Americans for Prosperity -- began as an offshoot of David Koch's political group, Citizens for a Sound Economy.
 
Club for Growth: $17,910,375
Partial disclosure of donors
 
Advocating for decreased taxes, limited government, free trade and economic libertarianism, this conservative organization endorses and financially supports conservatives running for office. It was founded in 1999 by economic analyst Stephen Moore, who sits on the editorial board of The Wall Street Journal
 
The list of groups goes on and on, including names you might recognize such as Planned Parenthood, the National Rifle Association and the AFL-CIO. But most likely their names are vague and don't offer much of a clue of who is running them or donating to them, such as Winning Our Future, Endorse Liberty and America Shining.
 
The Investing Answer: Trusting the advice of a political ad should be done cautiously, especially if it's difficult to discern the motive of the group behind it. Checking out who's behind the shadowy spending may change your mind before you get in the voting booth.