Oregon Corporations use loophole to hide political spending
In Oregon, we have no limits on the amount of money that can be given to or spent by political campaigns. What we do have, however, are rules that require those contributions and expenditures to be reported in a transparent, timely manner.
When it comes to monitoring campaign spending, Oregon’s approach is to use the disinfecting power of sunlight. The Secretary of State maintains a publicly available web database (ORESTAR), which tracks all giving and spending so that anyone—in theory—can find out who’s putting money into political campaigns.
But as we’ve seen from people like Bill Sizemore and Kevin Mannix, exploiting the system in order avoid campaign disclosure has become almost a cottage industry. Mannix, Sizemore, and their donors have long set up complicated webs of shell organizations in order to hide their political funds.
It appears that other new political players are now taking a page from those antics.
This week’s issue of Willamette Week has a look into the use of “Independent Expenditures” by political donors to effectively keep campaign contributions off the books. The article focuses on a little-known group called Grow Oregon, which was founded by corporate lobbyists to move a pro-business agenda. Willamette Week reports that Grow Oregon supporters include the Standard, Nike, Schnitzer Steel, Columbia Sportswear, U.S. Bank, and the Oregon Business Association.
Independent Expenditures are when a political committee or organization does work on behalf of a campaign, but without any collaboration or consultation with the campaign itself. In federal races and states with campaign spending caps, Independent Expenditures are usually used to get around political contribution limits.
But in a state like Oregon, with no contribution limits, it’s logical to conclude that Independent Expenditures are used to avoid transparency and full disclosure. Independent Expenditures aren’t reported on the Secretary of State’s website; paper records of the transactions are kept in a binder in Salem. (Independent Expenditures made by PACs do show up on the site, but not linked to the beneficiary campaign, making it difficult to track.)
According to Willamette Week, the members of Grow Oregon used Independent Expenditures to funnel money into the unsuccessful re-election campaign of Mike Schaufler, who lost 2-1 in the primary.
These organizations paid for canvassing on behalf of Schaufler by the Signature Gathering Company of Oregon, a firm created by corporate lobbyist Mark Nelson. Until Willamette Week began looking at the records, these contributions remained hidden.
Why hide their contributions? Perhaps they were afraid of the message it would send to Democratic primary voters that Schaufler was supported by big business. (He did, after all, return a $5,000 check from the Koch brothers, after proudly accepting their support.) Had the contributions been more transparent, Schaufler’s big business support could very well have ended up featured in a mail piece.
Or maybe the secrecy was because the money was going to Mark Nelson’s signature gathering firm, which was gathering signatures on an anti-union ballot measure at around the same time they were canvassing for Schaufler. That would have obviously been at odds with the unions that were supporting Schaufler’s re-election.
Or maybe it was that these large corporations didn’t want to be publicly associated with Schaufler, given his recent high-profile PR disasters. Since the corporate contributors are refusing to comment, and the election is in the past, we may never know the reason.
The overall problem is that Oregon’s campaign finance laws depend largely on the expectation that campaigns will respect the rules. Examples like Grow Oregon, Sizemore, and Mannix, however, show that many people will continue to devise new ways to exploit the system in order to hide their activities.
Apparently, the use of this system is part of a growing trend in Oregon. The question is: How much money will be effectively hidden by groups like Grow Oregon in the November 2012 election, when all expectations are that campaign spending will be high?