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Who’s behind the money?


Alarmed at the big bucks spent in the Oklahoma City Council election, an outgoing member calls for more transparent campaign disclosure.

Clifton Adcock March 16th, 2011

The day of the March 1 City Council election, the council held its regular meeting, and outgoing Ward 2 Councilman Sam Bowman had something he wanted to get off his chest.

Bowman, who did not run for re-election, praised the public candidate forums and the civility therein, but expressed concern about the amount of money being spent and what he said was a lack of open campaign disclosure.

“In these last few weeks, big money has gotten involved to the extent, in my opinion, that it has just made a mockery of our city elections,” Bowman said. “I didn’t see it coming this fast. The times are here where bigger money is going to be involved in local elections. I had no idea whatsoever to this extent.”

One deadline for candidates and committees to file donation and expenditure reports fell on Feb. 13. Of the four races, only Ward 2 went to an April 5 runoff, and the two remaining candidates, Charlie Swinton and Ed Shadid, as well as other political groups, will be required to file campaign finance reports between Monday and March 25.

On both sides, candidates were backed, sometimes indirectly, by groups that exist in the murky area between PACs and nonprofit organizations. At least one such group plans to continue campaigning in the Ward 2 runoff.

A year ago, these non-PAC groups would have been severely restricted from supporting or opposing candidates, telling voters who they should elect, or giving money to PACs, but all of those restrictions were wiped away because of a 2010 U.S. Supreme Court decision known as Citizens United v. Federal Election Commission.

Similar, but different

Candidates’ election committees aside, four groups filed to take part in campaign contributions: Chesapeake Oklahoma Political Action Committee; Better Local Government Political Action Committee; International Union of Painters & Allied Trades Political Action Together Committee; and the Committee for Oklahoma City Momentum. These groups are not all created equal, however. All four could be regarded as PACs, although one isn’t — not because of its goals or political activity, but because of its status with the Internal Revenue Service: the Committee for Oklahoma City Momentum. While the other three committees are legal PACs, Momentum is a 527 group, referred to as such for the section in the tax code under which its organizational status falls. Because of their IRS status, they operate under different rules than political action or candidate committees.

While the FEC regulates PACs in federal elections, and the Oklahoma Ethics Commission oversees state and county elections, 527s are not overseen by either. Instead, they fall under the regulatory scope of the IRS, said Marilyn Hughes, executive director of the state Ethics Commission.

Several 527 groups and the issues surrounding them have gained prominence over the past decade, most notably the Swiftboat Veterans for Truth 527 group in 2004, which questioned presidential candidate Sen. John Kerry’s military service in Vietnam.

In the following years, 527 groups were reined in by court rulings and FEC decisions. After 2007, a 527 group’s communication could not mention any election, candidacy, political party, opposing candidate, nor a candidate’s character, qualifications or fitness for office. But many of those electioneering restrictions were swept away by the Citizens United decision, as well as constraints on when advertisements could air, limits on independent expenditures and limits on the groups’ use of corporate money. In the case, the court ruled that many of the previous restrictions were unconstitutional limits to the First Amendment. However, state campaign laws governing municipal elections require that organizations file campaign records with the municipal clerk. According to IRS records, Momentum filed its Political Organization Notice of 527 status on Feb. 16 — the Monday following the city’s Friday campaign contribution and expenditure reporting deadline.

The next day, Feb. 17, the newly formed group filed its committee registration papers to participate in the municipal election with no campaign finance reports. The next campaign contribution filing period is a little more than a week prior to the April 5 runoff.

Both filings have little information about Momentum, but they do list the chairman as Oklahoma City attorney William H. Whitehill Jr. Whitehill said his group will file its reports during the March 21-25 time period. The new freedom such groups now have as a result of Citizens United is the reason Momentum was able to participate in the city election, he said.

The liberal from Ward 5?

Leading up to the election, Momentum used bold campaign tactics. The group’s direct-mail pieces are ideologically diverse, praising one candidate’s progressive stance, and criticizing another for not being conservative enough.

Momentum circulated at least two direct-mail pieces that attacked the conservative reputation of Walters, an outspoken, conservative councilman who was endorsed by the Sooner Tea Party.

Walters declined to comment. One Momentum mailer superimposed Walters next to President Barack Obama, criticizing the councilman for voting to spend economic stimulus money.

“Instead of trimming back on government spending like a true conservative would do, Brian Walters voted to spend newly printed ‘stimulus’ dollars to grow city government,” it read.

The Momentum mailer then cites a June 17, 2009, story from The Oklahoman and City Council meeting minutes, specifically Resolution P, which was the approval of the city’s fiscal year 2010 budget. It passed the council unanimously, meaning Momentumbacked incumbents in other wards also voted in favor of it.

In fact, the group’s mailings in support of Salyer praise the incumbent’s progressive credentials. The group published a testimonial written by Democratic state Rep. Al McAffrey, which stated, “She is a nonpartisan progressive leader who is moving Oklahoma City forward. We cannot allow a handful of tea party extremists to take over our community.”

The group also took out ads in The Oklahoman between Feb. 24 and March 1.

“The committee has no particular ideology; rather, we’re interested in electing strong leaders who will keep OKC’s momentum going,” Whitehill said. “The city has come too far in the past 15 to 20 years to stop or slow down that momentum.”

Follow the money, if you can

The Momentum group was not the only nonprofit involved in the city election, however. The Better Local Government PAC received $125,000 — the largest single donation at the time — from an organization called A Voice for Responsible Government Inc.

A Voice for Responsible Government is a nonprofit that filed incorporation papers with the Oklahoma Secretary of State on Feb. 8 (two days prior to the $125,000 donation). Local firefighters’ union president and Better Local Government Chairman Phil Sipe said the group is a 501(c)(4) charitable organization, which the IRS considers to be “social welfare organizations.”

Sipe said money donated from the firefighters to A Voice for Responsible Government was in turn given to the Better Local Government PAC, which spent the money on campaigning. This flow of money allowed the nonprofit to keep its donors anonymous because A Voice for Responsible Government did not register with the city clerk.

Unlike 527s, 501(c)(4) organizations are not required to disclose their donors in IRS filings. Sipe said the nonprofit’s funds came from money donated by individual firefighters.

" A Voice for Responsable Government was a corporation that was set up by the firefighters for the purpose of funding A Better Local Government PAC, “It’s all firefighter money,” Sipe said, noting that prior to the Citizens United case, the nonprofit would not have been able to make such large donations. “You could only donate a maximum amount allowed by the Ethics Commission. On the advice of our counsel, we set it up the way we did to make sure we didn’t violate the law. We did everything legally to reduce our tax liability.”

The next election

The Ward 2 runoff between Swinton and Shadid is April 5, and Momentum, which backed Swinton in the primary, plans to continue exerting its influence.

“We want to see what’s been happening in OKC the past 20 years keep moving on,” Whitehill said.

Sipe said neither the Better Local Government PAC nor the firefighter PAC will participate in the runoff.

“We’re not giving Ed any money at all. No firefighter PAC has donated any money to him, and we don’t intend to. He doesn’t want any money from us,” he said.

Although finding the source of campaign money is becoming more difficult since the Citizens United decision, some local officials are calling for more oversight. During the March 1 City Council meeting, Bowman recommended the city look into making campaign disclosure more open, or at least lobby the Legislature to do so at the state level.

“I think we owe it at least to our citizens to address it and see what we can do about campaign disclosure,” Bowman said. “We’re not going to slow the money down, the day has arrived and it’s going to come. But people need to know who’s behind the money.”

View direct-mail pieces from the recent City Council race:

Adrian Van Manen #1

Adrian Van Manen #2

David Greenwell #1

Brian Walters #1

Brian Walters #2

Meg Salyer #1

Meg Salyer #2

 
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03.16.2011 at 12:27 Reply

I am impressed that Ed Shadid is refusing all PAC and other special interest money, for once everyone can agree big money should butt out, Shadid can not be bought, but the shadow group sure must be getting something from the other guy.  Citizens UNITE, Defeat the MONEY.

 

03.17.2011 at 03:05 Reply

Good article. But in the last paragraph which reads, "Click here to view direct-mail pieces from the recent City Council race and to read comments from the Center for Responsive Politics about 527s and charitable organizations," there is no link.

 

What's the link?

Doug Loudenback

 

03.21.2011 at 09:28 Reply

It is sad when big businesses use their money to paint a negative picture on candidates instead of letting the voters and election process work as it is intended.  I would not want to live in a ward where a councilman allowed a business to buy their seat.

 

 
 
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