Gaming of Contribution Reporting Rules Rampant in Midterms, Watchdog Says

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RICHMOND (CN) – The 2018 midterms saw record spending by candidates of both parties, but it also broke records for a new kind of campaign funding scheme: gaming campaign finance reporting data to delay the release of donors until after the race ends.

And while the schemes were used by both parties, the new report by the non-partisan campaign watchdog group the Campaign Legal Center found spending by SuperPACs surpassed that of traditional party-affiliated groups for the first time ever this past campaign season.

“Money in politics are increasingly becoming concentrated in a handful of politically connected super PACs, and those same super PACs are finding new ways to disguise their spending from voters,” said Corey Goldstone, media strategist at the Campaign Legal Center.

“In the 2018 midterms, super PACs made a deliberate effort to obscure the identity of donors – sometimes to make it look like the source of funding was local, when in fact it was tied to major national sources. Voters deserve full transparency,” Goldstone said.

The schemes, according to the group, involved spending large sums of money towards the end of the election so donor lists wouldn’t be revealed until after the election.

Among the groups the report accused of such tactics was a West Virginian Republican Senate PAC called “Mountain Families PAC.”

Campaign Legal Center said the Senate PAC managed to avoid disclosing donors until after the state’s primary ended and when that data was made public it showed most of their money came from a Mitch McConnell-backed group and none of it came from those living in the Mountain State.

The same gamesmanship was used in the Arizona GOP primary by “Arizonans for Life” and again in Alabama’s Special election by ““Highway 31” with the later being shells for money from the Democratic super PACs Senate Majority PAC and Priorities USA Action.

But the scheming didn’t end there. The growth of social media use by the American public has lead to an increase in spending by political groups hoping to reach that new digital audience.

Adav Noti, senior director of trial litigation at Campaign Legal Center, said this new reality created a perfect storm of obscured campaign spending.

“The FEC has failed to provide meaningful guidance as to how its 1970s-era rules apply to modern digital advertising,” he said. “Congress should [act to] make sure that major sellers of online ads aren’t selling them to foreign interlopers, and to create strong disincentives against foreign actors targeting American voters with election-related messages.”

But the report was not all doom and gloom, and it includes ideas the authors believe could fix the problematic campaign finance system. Among them would be the passage of laws that require campaign committees to report contributions of $1000 or more within 48 hours if it was received within the last 20 days of an election. A similar rule for superPACs could also stifle such abuse, the group said.

And while the report acknowledged Facebook’s efforts to crackdown on unreported campaign advertising, it also said it was unwise to leave the future of transparent elections in the hands of “private entities whose ultimate responsibility is to their shareholders rather than to American voters.”

The solution? Expanding federal reporting laws to include digital spending by passing the Honest Ads Act.

“Voters have a right to be fully informed about who is trying to influence their vote through online political ads,” said Brendan Fischer, director of the federal reform program at the Campaign Legal Center, while advocating for the Honest Ads Act.

“The transparency this bill aims to provide in elections will protect and enhance the integrity of our elections, which are the most fundamental component of American self-governance,” Fischer said.

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