Anonymous money makes its way to Iowa

How will unlimited, undisclosed donations shape state politics?

Mike Wiser
Published: March 10 2014 | 12:10 pm - Updated: 1 April 2014 | 9:23 am in

DES MOINES — The unlimited, anonymous money that shook the 2012 elections may be poised to make its way down the ballot.

It’s been more than four years since the U.S. Supreme Court decided the landmark Citizens United v. the Federal Election Commission, which helped give rise to a flood of unlimited, undisclosed money.

Called 501(c)(4) groups after the chapter in the tax code from which they derive their authority, these issue-driven groups, such as Crossroads GPS and Priorities USA, have spawned shoot-offs and imitators now cropping up in Iowa.

Some are state chapters of nationally run organizations. Others are homegrown groups expanding their fundraising repertoire. No matter their origin, they’re creating new avenues for donors who want to eschew the traditional party system.

“Clearly, the popularity of 501(c)(4) is growing. I don’t think there’s any question about that,” former Iowa Democratic Party chairman and state Rep. Tyler Olson, D-Cedar Rapids, said. “I think it’s making its way to the states, as is a lot of campaign finance vehicles or politics. People are taking the tools that they used at the federal level and using them at the state level.”

Untraceable

Mark Lucas is the director of the Iowa branch of Americans for Prosperity. His branch is one of 38 chapters that sprouted from the group’s national organization founded by billionaire brothers David H. and Charles Koch.

“If you compare us to the state party or the (Republican National Committee), what you’re getting out of them is not a great return on investment,” Lucas said. “Look at the data side. The amount of money we’re investing on the data operation is about the same as the RNC. The Iowa GOP isn’t going to even be close.”

Lucas won’t divulge how much money Americans for Prosperity Iowa raises, but he said the organization is “self-sustaining,” meaning it raises at least some of the money it spends from inside the state.

“Sometimes, we’ll share some of our information,” he said. “Like when we took out the half-million ad buy against Bruce Braley, we announced that.”

Hugh Espey, executive director of Iowa Citizens for Community Improvement, is more open about his organization’s 501(c)(4) fund, called the ICCI Action Fund.

The group has been in Iowa since the 1970s and created its 501(c)(4) in late 2011. The group raised about $370,000 for its activities since, Espey said.

“What’s appealing to people about a (c)(4) like us is we offer them an opportunity to kind of change the way politics by the parties are done,” Espey said. “We really have a focus on values and issues instead of a candidate or a specific party.”

That’s probably one of the few instances Espey and Lucas agree on.

“We’re really a niche organization focused on economics,” Lucas said. “People are getting tired of giving money to candidates and not hearing back from them. They can see our results.”

The future

Last month, the online magazine Politico published a Byron Tau story asking if the influx of 501(c)(4) groups heralded the “Last call for state parties” across the country, noting dropping receipts in state parties, including the point that 15 out of 100 state parties are operating in the red.

Body copy ragged right: That’s not the case in Iowa, at least not yet. Both state parties had cash balances on hand at the most recent reporting period, and fundraising numbers look to be roughly where they have been historically for non-presidential election years, campaign finance reports show.

Although the Republican Party of Iowa’s last quarter is a clear exception to the rule. The $228,414 it reported it raised in the most recent period is less than half it did during the same period in 2012 and a little more than half of the $425,000 it raised for the same period in 2010.

“In the past, the parties did a tremendous amount of messaging and TV ads. Now, there are other groups doing those things and raising the money to do it,” Republican Party of Iowa Chairman A.J. Spiker said. “It has a major impact on the state and the national political parties.”

Spiker has announced that he is stepping down as the party’s chairman.

Christina Freundlich, communications director for the Iowa Democratic Party, said the effect has been negligible so far. The $1.3 million it raised in the most recent reporting period is less than the $1.6 million it raised at the same period in 2012 but more than double the $642,000 for the same period in 2010.

“We have not really seen a change in our fundraising over the past few years impacted by Citizens United or the increasing influence of 501(c)(4)s,” she wrote in an email. “More so, it is difficult to quantify whether we have seen dramatic increase or decrease in our incoming money, as a lot of fundraising is dependent on the political climate.”

Megan Tooker, executive director of the Iowa Ethics & Campaign Disclosure Board, said Iowa’s campaign finance laws likely have something to do with that.

“In Iowa we’re seeing less of that activity because we have unlimited campaign contributions,” she said. “My perception of how this is working is we have a lot of big donors that are comfortable giving to candidates or the party, and they know how to do that, they do it well and why change it?

“I think in states that have hard limits, people give the maximum amount of money, and then they look for other ways to get involved.”

Body copy ragged right: Republican strategist Doug Gross, who supports unlimited contributions with immediate disclosure, said he sees the 501(c)(4) role getting bigger.

“They’re doing a lot of the soft work, I would call it, the polling, voter identification, a lot of which was done by political parties in the past,” he said. “So yes, they have a negative impact on political parties.”

Comments: (515) 422-9061; michael.wiser@lee.net

Chatter: Election-year fundraising figures for the state of Iowa show totals have remained relatively constant over the past several cycles.

2012

$39,567,885 Total dollars contributed

$13,781,251 Total contributed to party committees

$8,579,019 Total contributed to Democratic Party committee

$5,202,232 Total contributed to Republican Party committee

2010

$57,585,091 Total dollars contributed

$14,417,838 Total contributed to party committees

$8,804,210 Total contributed to Democratic Party committee

$5,613,627 Total contributed to Republican Party committee

2008

$37,567,819 Total dollars contributed

$13,563,000 Total contributed to party committees

$9,167,953 Total contributed to Democratic Party committee

$4,395,046 Total contributed to Republican Party committee

2006

$52,797,632 Total dollars contributed

$12,879,310 Total contributed to party committees

$8,093,845 Total contributed to Democratic Party committee

$4,785,465 Total contributed to Republican Party committee

2004

$26,474,895 Total dollars contributed

$9,460,848 Total contributed to party committees

$6,072,665 Total contributed to Democratic Party committee

$3,388,183 Total contributed to Republican Party committee

Sources: Iowa Ethics and Campaign Disclosure and the National Institute on Money in State Politics

 

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