[EL] An insidious foreign dark money threat: New reports about Russian money going to the NRA could prove watchdogs’ fears correct

Fri Jan 19 10:10:38 PST 2018

It is very easy for a bill that requires non-profits or other multipurpose
organizations to report their relevant contributors when they make
political expenditures to be sensitive to the concerns of the wealthy (or
anybody else) wanting to donate to charities anonymously.

SB 27, passed in California in 2014 to require non-profits to report the
funders of their political expenditures when they spend $50,000 or more on
California political campaigns, does exactly that.  It doesn't require
non-profits to reveal ALL their funders -- just enough donors who gave
$1,000 or more, on a last in, first out basis, to account for their
political expenditures.  Furthermore, it excludes from the disclosures,
among other appropriate things:

(A) A donor who designates or restricts the donation for purposes other
than contributions or expenditures.
(B) A donor who prohibits the multipurpose organization’s use of its
donation for contributions or expenditures.

So all a wealthy donor to a non-profit that wants to keep their donation
anonymous needs to do is say that it can't be used for political purposes,
and they won't be disclosed if the non-profit makes political expenditures
(of course, the non-profit would have to make those expenditures out of
other funds).

Now, if a wealthy donor wants to make a donation to the non-profit
anonymously and have it be used for political purposes, SB 27 would rule
that out, as is appropriate.

- Trent

On Fri, Jan 19, 2018 at 9:46 AM, Eric J Segall <esegall at gsu.edu> wrote:

> I’m sensitive to the concerns of the wealthy wanting to donate to
> charities anonymously. I’m much more worried about our completely broken
> democracy.
>
> Best,
>
> Eric
>
> Sent from my iPhone
>
> On Jan 19, 2018, at 12:43 PM, Sean Parnell <sparnell@
> philanthropyroundtable.org> wrote:
>
> Well, and brining this back to my area of work, philanthropic giving and
> charities, I and others concerned about the ability of philanthropists to
> give anonymously to charity would probably have some issues with the
> definition of “election-related activity.” For example, my pastor this past
> Sunday made what would have in some legislation I’ve seen proposed been an
> “electioneering communication” if he’d said it at a different time of year
> and it had been about the governor rather than the President. So long as
> “electioneering communication” means, in one way or another, any reference
> to a candidate in a specified time period, regardless of whether it is an
> attempt to influence an election, you’re not going to get a lot of interest
> in the vastly-expanded disclosure regime that you want.
>
>
>
> Best,
>
>
>
> Sean
>
>
>
>
>
>
>
> *From:* Rick Hasen [mailto:rhasen at law.uci.edu <rhasen at law.uci.edu>]
> *Sent:* Friday, January 19, 2018 12:28 PM
> *To:* Sean Parnell <sparnell at philanthropyroundtable.org>; Jeff Hauser <
> jeffhauser at gmail.com>
> *Cc:* Election Law Listserv <law-election at uci.edu>
> *Subject:* Re: [EL] An insidious foreign dark money threat: New reports
> about Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> That seems like a pretty good argument for Congress to pass improved
> disclosure laws, regardless of the tax status of a particular organization,
> for any organization or person who spends or contributes BIG money (I’d
> raise thresholds dramatically) on election-related activity (we can discuss
> how that is best defined, but at least extending electioneering
> communications to digital ads seems like a good start).
>
>
>
> This way we know where the ultimate source of money is, without allowing
> the kind of shell games to go on.
>
>
>
>
>
> *From: *Sean Parnell <sparnell at philanthropyroundtable.org>
> *Date: *Friday, January 19, 2018 at 9:22 AM
> *To: *Jeff Hauser <jeffhauser at gmail.com>, Rick Hasen <rhasen at law.uci.edu>
> *Cc: *Election Law Listserv <law-election at uci.edu>
> *Subject: *RE: [EL] An insidious foreign dark money threat: New reports
> about Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> And the same goes for the public, of course, who would only see “We’re
> Totally Not The Russians LLC” listed on whatever form of disclosure is
> envisioned by Ciara and others in the “reform” community.
>
>
>
> Sean
>
>
>
>
>
> *From:* Jeff Hauser [mailto:jeffhauser at gmail.com <jeffhauser at gmail.com>]
> *Sent:* Friday, January 19, 2018 12:11 PM
> *To:* Rick Hasen <rhasen at law.uci.edu>
> *Cc:* Sean Parnell <sparnell at philanthropyroundtable.org>; Election Law
> Listserv <law-election at uci.edu>
> *Subject:* Re: [EL] An insidious foreign dark money threat: New reports
> about Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> Michael Cohen has been alleged by the Wall Street Journal to create an LLC
> to pay off an actress aleged to have an affair with Trump:
> https://www.wsj.com/articles/trump-lawyer-used-
> private-company-pseudonyms-to-pay-porn-star-stormy-daniels-
> 1516315731?utm_source=The+Point+with+Chris+Cillizza+Alerts&utm_campaign=
> d827904afa-EMAIL_CAMPAIGN_2018_01_19&utm_medium=email&
> utm_term=0_ada7c7ac0a-d827904afa-83775533
> <https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.wsj.com%2Farticles%2Ftrump-lawyer-used-private-company-pseudonyms-to-pay-porn-star-stormy-daniels-1516315731%3Futm_source%3DThe%2BPoint%2Bwith%2BChris%2BCillizza%2BAlerts%26utm_campaign%3Dd827904afa-EMAIL_CAMPAIGN_2018_01_19%26utm_medium%3Demail%26utm_term%3D0_ada7c7ac0a-d827904afa-83775533&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=PgF9%2FV6dIeZhVXoba5D63mdIIA9b5gAjiv73Ck67s4E%3D&reserved=0>
>
>
>
> If Russians created shell companies in Delaware to give money to the NRA,
> all the IRS would see is "Delaware LLC."
>
>
>
> (the NRA would presumably make inquiries about any unexpected
> contributions, and I doubt they lack information on who is giving them big
> money)
>
>
>
> On Fri, Jan 19, 2018 at 11:59 AM, Rick Hasen <rhasen at law.uci.edu> wrote:
>
> Has the NRA issued any public statements denying the receipt of money from
> Russian government sources/sources allied with Russian government which
> were used by its c4 for election-related activity?
>
>
>
>
>
> *From: *Sean Parnell <sparnell at philanthropyroundtable.org>
> *Date: *Friday, January 19, 2018 at 8:55 AM
> *To: *Rick Hasen <rhasen at law.uci.edu>, Election Law Listserv <
> law-election at uci.edu>
> *Subject: *re: An insidious foreign dark money threat: New reports about
> Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> I wanted to clear up what some might mistakenly infer from the piece by
> Ciara Torres-Spelliscy linked to below concerning the latest speculation
> regarding foreign money, Donald Trump, and those pesky Russians (hold on a
> sec, it appears the 1980’s are calling and wish to talk to me about
> something). She writes:
>
> *For many years now, good-government groups and campaign finance experts
> have warned that illegal foreign funds could be hiding in that dark money.*
>
> *That’s because, in federal races, political spenders that go dark are
> exploiting a loophole between the campaign finance system overseen by the
> FEC, which typically insists on that all donors to campaigns identify
> themselves, and charities the Internal Revenue Service allows to collect
> funds donated anonymously.*
>
> Three things:
>
>    1. The National Rifle Association is not a “charity,” at least as
>    defined by the IRS. It’s a 501c4 “social welfare” organization (it does
>    have an associated foundation, which is a 501c3, but I don’t believe it’s
>    alleged that this entity was funding any political ads, let alone
>    Russian-funded ads).
>    2. While the NRA and other 501c organizations do not reveal donors to
>    the public, they do reveal them to the IRS (or at least are required to) on
>    Schedule B. Presumably, if there is a concern that the NRA took in millions
>    of dollars from Russian sources (whether state or “private” to the extent
>    there’s any distinction in Russia), it should be relatively easy for the
>    FBI to get the information from the IRS (I’m not sure if it requires a
>    subpoena or not in this particular instance, but law enforcement is able to
>    get confidential tax records). I’d guess that someone at the NRA handed a
>    few million dollars by a Putin pal would have realized this and handed it
>    back, if such a highly-speculative transaction occurred, but then there are
>    some imprudent people out there so who knows?
>    3. Anonymous contributions to charities are hardly a “loophole,” it is
>    in fact a practice with a long and deeply ingrained history in
>    philanthropy, praised in the Gospel of Matthew 6:1 – 6:4 and also by Seneca
>    the Younger, among others. I’ve written an overview of anonymous charitable
>    giving, published last year, if anyone is interested: http://www.
>    philanthropyroundtable.org/file_uploads/Protecting_Donor_Privacy.pdf
>    <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.philanthropyroundtable.org%2Ffile_uploads%2FProtecting_Donor_Privacy.pdf&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=MXjhoM%2BYVL5IYkkqNGLvop%2BrE7EsDV%2Fn7VrR2p10hSU%3D&reserved=0>
>
> Best,
>
> Sean Parnell
>
> Vice President of Public Policy, The Philanthropy Roundtable
>
> 1120 20th Street NW, Suite 550 South
>
> Washington, DC  20036
>
> (202) 600-7883 (direct)
>
> (571) 289-1374 (mobile)
>
> sparnell at philanthropyroundtable.org
>
>
>
>
>
>
>
>
>
>
>
>
>
> *“An insidious foreign dark money threat: New reports about Russian money
> going to the NRA could prove watchdogs’ fears correct”
> <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Felectionlawblog.org%2F%3Fp%3D96992&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=hQFqRIgu49Qa0K%2FphgoV9XWv%2F3wtfS%2FWUsZLYPXAWNM%3D&reserved=0>*
>
> Posted on January 19, 2018 7:16 am
> <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Felectionlawblog.org%2F%3Fp%3D96992&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=hQFqRIgu49Qa0K%2FphgoV9XWv%2F3wtfS%2FWUsZLYPXAWNM%3D&reserved=0>
>  by *Rick Hasen*
> <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Felectionlawblog.org%2F%3Fauthor%3D3&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=K9isstdElCba4jwIxtN%2BBCzohlVNQUtI%2F4WhuSzMnm4%3D&reserved=0>
>
> Ciara Torres-Spelliscy
> <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.nydailynews.com%2Fopinion%2Finsidious-foreign-dark-money-threat-article-1.3765048&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=MkTTOodeNxftPZfAzK1VLA58uH0uqNLWbQ4z0GBm8YQ%3D&reserved=0> NYDN
> oped.
>
> Posted in campaign finance
> <https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.addtoany.com%2Fshare%23url%3Dhttp%253A%252F%252Felectionlawblog.org%252F%253Fp%253D96992%26title%3D%25E2%2580%259CAn%2520insidious%2520foreign%2520dark%2520money%2520threat%253A%2520New%2520reports%2520about%2520Russian%2520money%2520going%2520to%2520the%2520NRA%2520could%2520prove%2520watchdogs%25E2%2580%2599%2520fears%2520correct%25E2%2580%259D&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=2pZ7JqnI8lyzCacy%2Bt%2By4qeIEkpM1yoHwz4igAlqIvI%3D&reserved=0>
>
>
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-- 
Trent Lange
President and Executive Director
California Clean Money Campaign
Sponsor of AB 249, the *California DISCLOSE Act*
(310) 428-1556
www.YesFairElections.org
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