Liberal ‘dark money’ group scrutinized in Pennsylvania

Introduction

PHILADELPHIA — State election regulators will soon investigate whether Pennsylvanians for Accountability, a liberal nonprofit that repeatedly criticized former Pennsylvania GOP Gov. Tom Corbett and other conservative politicians, violated political disclosure laws.

Pennsylvania’s Department of State will initiate an “inquiry into apparent discrepancies” in the political spending reports filed by Pennsylvanians for Accountability, spokeswoman Adriana Arvizo said in response to questions raised about the group by the Center for Public Integrity.

It’s the latest trouble for the union-backed Pennsylvanians for Accountability, an organization that also failed to file a mandatory federal tax return — exposing it to up to $50,000 in Internal Revenue Service fines, as the Center for Public Integrity reported earlier this year.

At least one Republican state lawmaker is also considering holding a legislative hearing to, in part, probe the group’s actions.

According to recently submitted tax records, Pennsylvanians for Accountability spent more than $1 million during late 2012 and early 2013 on advertisements targeting Corbett, who lost re-election in November, and a handful of state lawmakers.

Pennsylvanians for Accountability characterized nearly $475,000 of this sum as “independent expenditure efforts” that consisted of “direct mail and digital advocacy” in nine state House and state Senate races.

Yet the group reported making only $61,000 worth of independent expenditures in two races to the Pennsylvania Department of State.

Pennsylvania law defines an “independent expenditure” as spending “made for the purpose of influencing an election” not done in “cooperation or consultation” with any candidate.

Notably, the independent expenditure reports that Pennsylvanians for Accountability filed with the Pennsylvania Department of State arrived more than six months late, in May 2013, one day after an article about Pennsylvanians for Accountability was published by Pittsburgh-based investigative reporting group PublicSource.org.

At the time, Adam Bonin, the group’s Philadelphia-based lawyer, wrote that the documents had been filed late “inadvertently.”

As a so-called “social welfare” nonprofit organized under Section 501(c)(4) of the U.S. tax code, Pennsylvanians for Accountability is not required to publicly disclose information about its donors, even when it spends money on politics. Candidates, political action committees and political parties, in contrast, must regularly reveal their donors’ names and other identifying information.

But separate tax records and federal labor filings reviewed by the Center for Public Integrity show that the National Education Association, the Service Employees International Union and Democratic-aligned organizing group America Votes accounted for more than $1.2 million of Pennsylvanians for Accountability’s receipts — nearly all of its income.

This year, Pennsylvanians for Accountability should expect scrutiny from some Keystone State Republicans, who, unlike many of their national GOP counterparts, want politically active nonprofits to disclose more information about their funders.

State Rep. Daryl Metcalfe, Republican chairman of the House state government committee, says that his committee may hold a hearing on political “dark money” groups like Pennsylvanians for Accountability, which he called “shady” for trying to “mislead the voters” by not identifying its funders.

“The electorate deserves to have good information and transparency in the election process,” Metcalfe said.

Pennsylvania Republican Anne Chapman*, who was among the legislative candidates targeted by Pennsylvanians for Accountability in 2012, likewise expressed concern about Pennsylvanians for Accountability’s campaign finance reports — and about the lack of information regarding the group at the time of its ad blitz against her.

“It should be very obvious who is funding these things,” said Chapman, who lost her 2012 race by about 15 percentage points.

That sentiment was echoed by state Rep. Rick Saccone, a Republican targeted by Pennsylvanians for Accountability in 2012 who ultimately won by just 112 votes out of the nearly 29,000 votes cast that year.

“If there’s no transparency, then bad things happen,” he said.

While hardly transparent about its finances, Pennsylvanians for Accountability appears to be in the midst of a disappearing act.

After its initial spending spree following its September 2012 creation, Pennsylvanians for Accountability did not raise a dime during its second year of existence, according to a new tax filing Bonin provided last week.

As of August 2014, the document states, the group had about $6,000 in the bank.

*Correction, March 4, 2015, 3:01 p.m.: This story orginally misspelled Anne Chapman’s last name.