Barack Obama accused of ‘dark money’ hypocrisy by non-disclosing nonprofit

Introduction

Americans for Prosperity, the conservative nonprofit founded with support from billionaire brothers Charles and David Koch, is out with a new ad accusing President Barack Obama of “hypocrisy.”

The reason? Obama’s campaign committee is transforming itself into a nonprofit, which, like Americans for Prosperity, is organized under Section 501(c)(4) of the U.S. tax code. The designation allows groups to lobby and advocate for both issues and candidates without revealing the names of their funders, so long as influencing elections is not their primary purpose.

But what the new Americans for Prosperity ad doesn’t say is that Obama’s new nonprofit, called Organizing for Action, plans on disclosing its donors, while Americans for Prosperity does not.

Politico has reported that the nascent pro-Obama nonprofit has reached out to companies such as Lockheed Martin, Citi and Duke Energy for financial support. Bob Bauer, the lawyer for Organizing for Action, has said the group will voluntarily report its funders and be “completely devoted” to issue advocacy, not electoral politics.

The exact nature and degree of this disclosure is not yet clear. When the Obama campaign voluntarily disclosed the names of its bundlers, for example, it simply provided a list of names and broad ranges, with a top range of “more than $500,000,” even though many bundlers raised millions of dollars, according to documents obtained by the New York Times.

Despite calling the president’s new embrace of Organizing for Action hypocritical, a statement posted online by Americans for Prosperity says the nonprofit does not “begrudge Obama for making use of such an organization and taking donations from whoever he wishes.”

Levi Russell, the communications director of Americans for Prosperity, told the Center for Public Integrity that Obama’s about-face shows “deep hypocrisy.” He argued that Obama’s actions are the latest in the string of flip-flops on campaign finance issues dating back to when he pledged to participate in the presidential public financing system (and then didn’t) and later “loudly attacked” super PACs before giving his blessing to one of his own, Priorities USA Action.

“Let’s judge Obama based on what he actually does, rather than what he says he’ll do,” Russell added.

The new advertisement from Russell’s group shows a clip of Obama speculating that Americans for Prosperity, which reported $22 million in revenue in 2010, could be funded by “a big oil company” or “a big bank.”

Little is known about Americans for Prosperity’s funders.

In 2010, Americans for Prosperity did receive a $25,500 grant from the American Petroleum Institute, a trade association representing the oil and gas industry, for “energy education,” records filed with the Internal Revenue Service show.

Similarly, a nonprofit linked to Wisconsin Manufacturers & Commerce, the the state’s chamber of commerce and largest business trade association, gave Americans for Prosperity $10,000 in 2010, IRS documents show, to educate the public about “business issues.”

One of the biggest known backers of Americans for Prosperity is the Arizona-based Center to Protect Patient Rights, another 501(c)(4) nonprofit that doesn’t disclose its donors. The group contributed $1.9 million to Americans for Prosperity in 2010, as was first reported by the Center for Responsive Politics.

“We agree with the [Supreme] Court that people should be free to support causes they believe in without winding up on some public list,” Russell said, adding that Americans for Prosperity does sometimes thank its sponsors by name.

Campaign finance watchdogs, such as Fred Wertheimer, president of Democracy 21, have criticized politically active nonprofits, including both Americans for Prosperity and Organizing for Action.

Just last week, Wertheimer called on Obama to shut down Organizing for Action to “remain true to the repeated warnings he has given the nation about the dangers of corporate influence-money and business as usual in Washington.”