The Democratic and Republican governors’ associations are increasingly relying on nonprofit affiliates to get their candidates elected and influence ballot initiatives, a move that allows them to avoid disclosing the identity of their donors.
The Washington, D.C.,-based Republican Governors Association and Democratic Governors Association are the most prolific outside spending groups in state-level elections, but as so-called 527 political organizations, they are required to make their donors public.
Their nonprofit affiliates, however, are not.
The RGA’s Republican Governors Association Public Policy Committee nonprofit spent $1.3 million between 2005 and 2009. During 2011, spending spiked to nearly $10 million, Internal Revenue Service filings indicate.
The DGA, meanwhile, established a nonprofit called America Works USA in 2011, which raised and spent $4.4 million.
The governors associations still spend far more through their 527 groups. The DGA spent $49 million and the RGA spent $77 million during the 2012 election cycle.
But rising spending by the RGA and DGA’s nonprofits, which have funded state-level battles over union rights, supreme court seats, tax policy and national healthcare reform, has gone largely unnoticed — and is likely to increase this year and next when 38 governorships are up for election.
The increase, says RGA spokesman Michael Schrimpf, is because “the number of GOP governors has increased along with the importance of their role as policy leaders.”
The 2010 Citizens United Supreme Court decision allowed nonprofits to accept unlimited donations from corporations, unions and individuals and spend the money on advertising in an attempt to elect or defeat candidates.
As spending by nonprofits and super PACs has exploded in federal elections, the same trend can be seen at the state level, says Stetson University law professor Ciara Torres-Spelliscy.
“The governors associations are sophisticated players, so if there’s a new tool to influence politics, they’re going to be early adopters,” she said.
The new prominence of nonprofits has come with controversy.
Watchdog groups, and now a U.S. senator, have called on the Internal Revenue Service to investigate and New York’s attorney general has proposed new disclosure rules for nonprofits that spend money on elections in the state.
At the center of the dispute are vague IRS rules that require 501(c)(4) nonprofit groups to be primarily focused on promoting “social welfare,” not election campaigns.
“The rule of thumb,” says Torres-Spelliscy, “is that 50 percent of a nonprofit’s money has to go to something other than politics.”
Despite the requirement, America Works USA — the Democratic nonprofit — spent about 70 percent of its budget on “media buys and production” in two races for governor in the last half of 2011 and the first half of 2012, according to a Center for Public Integrity review of unreleased tax records.
DGA spokesman Danny Kanner says America Works USA’s “primary purpose is not political.”
When the RGA nonprofit applied for tax-exempt status in 2004, it told the IRS it would host policy forums and workshops, not get involved in campaigns for elected office.