Undisclosed donors pump millions into state campaigns

A gold rush of local election-season advertising is pouring into Seattle media outlets, raising questions in some cases about who is trying to influence voters.

Nearly $40 million in political advertising has been reserved or bought in the Seattle television market by candidates, political parties, initiative campaigns and independent groups — a record for a nonpresidential election year.

Of that total, at least $3.1 million comes from nonprofits organized so that they do not have to disclose their donors.

Those groups — most targeting incumbent Democrat Patty Murray in the U.S. Senate race — are prompting renewed concerns among government watchdog groups about the evolving campaign-finance rules.

Murray is locked in a tight race with Republican Dino Rossi, a former state senator and two-time gubernatorial candidate.

President Obama last week criticized one group active in the Washington Senate race, Crossroads GPS, a new organization affiliated with GOP strategist Karl Rove. Crossroads GPS and others that don't disclose their donors are taking advantage of Supreme Court rulings that have altered the landscape for independent campaign expenditures.

A review of orders for TV advertising statewide, as well as interviews with media buyers, shows that Murray is outspending Rossi by approximately $6.2 million to $5.6 million.

But the national GOP is spending about $800,000 more for Rossi than the Democratic Party is for Murray. And independent conservative groups are outspending left-leaning counterparts by nearly a 2-to-1 ratio, giving Rossi's bid to unseat the 18-year incumbent a boost.

TV orders include time reserved or paid for through Election Day, Nov. 2, and could change, depending on the buyers' whims. But their sheer volume has spiked local TV rates. The price for a single 30-second ad during a recent Seahawks game increased from $12,000 to more than $35,000, according to one media buyer.

Washington Secretary of State Sam Reed, a Republican, said he is troubled by the lack of disclosure required for some independent groups. Unlike the new rules in federal campaign-finance laws, which apply to U.S. Senate and congressional races, state law requires all independent groups to disclose contributors in nonfederal races.

Without such disclosure, independent groups "really have a license to be the most irresponsible in terms of advertising," Reed said. "Knowing who is behind a candidate gives you a very good clue about what kind of elected official a candidate may be."

Court rulings ease rules

Inventive application of two Supreme Court campaign-finance rulings — a 2007 case, Federal Election Commission v. Wisconsin Right to Life, and this year's Citizens United v. Federal Election Commission — has made tracking campaign donors difficult, if not impossible, in some cases.

The court rulings eased requirements for certain nonprofits to disclose their donors while removing curbs on political spending by corporations and unions as long as they're not coordinated with candidate campaigns.

The nonprofits at issue are set up under section 501(c)(4) of the IRS code, which governs "social welfare organizations." They can spend no more than half their revenue on direct political support, and the rest on nonpolitical activities.

Some of the groups have interpreted that to include so-called "issue ads" run in the midst of campaigns, leading to formal complaints by watchdog organizations and Democrats.

The result for this election: Well-financed groups funded largely by anonymous donors are spending heavily on contested races, such as the Murray-Rossi race.

Groups active in Washington include:

• Crossroads GPS, the nonprofit wing of American Crossroads. The two groups collectively hoped to raise $52 million this election year and are on pace to spend $1.6 million in the Murray-Rossi race. Among the group's funders, according to the Center for Public Integrity, is hedge-fund manager Paul Singer, who held a fundraiser for Rossi.

One Crossroads ad shows Murray as a cartoon figure, standing astride an airplane and holding fistfuls of dollars as figures flash across the screen about ballooning national debt.

"If Congress would change the rules, we'd comply, but as the rules apply right now, liberal groups and conservative groups are allowed to not disclose their donors by the IRS," said Jonathan Collegio, a spokesman for Crossroads GPS.

• American Action Network, which is affiliated with former Sen. Norm Coleman, R-Minn., and shares a D.C. office building with American Crossroads. Coleman's group has spent $750,000 in the Murray-Rossi race, buying an ad that depicts the senator walking on the backs of people while wearing muddy tennis shoes.

• Committee for Truth in Politics, represented by Indiana attorney James Bopp Jr., which paid for a $325,000 ad against Murray that ran in August. Bopp is a well-known critic of campaign-finance rules and had an early role in the Citizens United case.

• American Future Fund, an Iowa-based nonprofit advocating for free-market ideas, which has spent about $480,000 on ads attacking U.S. Rep. Rick Larsen and congressional candidate Denny Heck, both Democrats.

Anonymity v. accountability

Wide-open spending by independent groups is a national phenomenon that could set a midterm-election record of about $500 million, according to the Center for Responsive Politics.

Bruce Boram, a local GOP consultant not affiliated with the nonprofits, said anonymity is attractive to donors because "it's a brutal business. If somebody is going to give a lot of money, why would they want to expose themselves to harassment if they don't have to?"

Left-leaning groups have reserved at least $2 million for ads supporting Murray or attacking Rossi, but all those groups are so-called 527 organizations that must report their donors — primarily labor unions.

Locally, spending on the Senate and congressional races is being supplemented by several well-funded campaigns for ballot initiatives, including the $14.4 million donated by the American Beverage Association to roll back new soda-pop and candy taxes.

Jim Rose, KING-TV's sales director, said the political advertising started heavily in August and will continue through Nov. 2. "This is hands down the largest midterm I've ever seen," he said.

Todd Donovan, a Western Washington University political-science professor, said surveys show voters are intensely skeptical about spending by independent groups. But the fact that some don't report their donors may not lead to a "clamoring for campaign-finance reform."

But voters are likely to become cynical amid the barrage of negative ads.

"The more you spend," Donovan said, "the more likely the voters are to say that they don't like the choices."

Staff reporter Sean Collins Walsh contributed to this report.

Jonathan Martin: 206-464-2605 or jmartin@seattletimes.com

Information in this article, originally published Oct. 11, 2010, was corrected Oct. 12, 2010. A previous version of this story incorrectly stated a person's name. The correct name is Paul Singer.