Nonprofit groups exploiting a loophole in Pennsylvania’s campaign finance laws will be subject to legislative scrutiny.
State Rep. Daryl Metcalfe, R-Butler, chairman of the House State Government Committee, said Thursday he would hold a hearing to determine whether some politically active nonprofit organizations are overstepping state law and whether the state’s enforcement of campaign finance laws is lacking. One such group last fall targeted three members of the committee with advertisements, but it did not disclose financial information to the state because it’s a “social welfare nonprofit.”
SCRUTINIZING: State Rep. Daryl Metcalfe, R-Butler, says he wants to know if other groups are also operating outside Pennsylvania’s nonprofit campaign finance rules
Metcalfe said the hearing, scheduled here June 5, would focus on how Pennsylvania’s campaign finance laws are applied.
“I don’t think there is a loophole in the law,” Metcalfe said. “But there is a loophole in the enforcement of the law.”
The group that drew Metcalfe’s attention is Pennsylvanians for Accountability, a nonprofit 501(c)4 corporation based in Pittsburgh that has been running television ads attacking Gov. Tom Corbett. The shadowy group also blasted at least four Republican state representatives during the final weeks of the 2012 campaign with mailers that appear to have been funded with $180,000 donated by the SEIU, a politically-active national union.
But the extent of contributions and expenditures from the group — like others that have popped up on both sides of the partisan divide after the U.S. Supreme Court’s 2010 Citizens United decision — is funded remains a mystery.
In most cases, nonprofits that engage in political advertising run their advertising expenses through an affiliate political action committee, or PAC, which reports the spending to the state Department of State. Pennsylvanians for Accountability doesn’t report its spending.
The group doesn’t appear to do much else, even though it’s registered with the state as a “social welfare nonprofit” and even though federal law prohibits 501(c)4 organizations from making political activity their primary purpose. Its website does not include information about donors or other activities, aside from the political ads Pennsylvanians for Accountability is funding.
“Based on the way they are operating, they appear to be a political committee more than anything else,” Metcalfe said.
CAMPAIGN AD: One of several mailers Pennsylvanians for Accountability distributed last year. Republicans say this counts as campaigning, but the group disagrees.
According to a report from Public Source last week, the group has spent at least $250,000 on TV ads in four markets.
Lynsey Kryzwick, who is listed as a spokeswoman for the group and works for Berlin Rosen, a public relations firm, said Pennsylvanians for Accountability was committed to informing the public about misinformation from the governor about his budget priorities, in accordance with the primary public advocacy purpose of the organization.
“This hearing is nothing more than a partisan attempt to silence the real concerns that Pennsylvania taxpayers have with Governor Corbett’s budget and the direction that he’s taking our state,” she said.
Metcalfe said reporting by Public Source and PA Independent brought Pennsylvanians for Accountability to his attention, but he said the hearings were not a partisan exercise and would not focus exclusively on one group.
“They are the catalyst for this meeting,” he said. “I’m interested in any organization that is working here in Pennsylvania to influence an election and is operating outside the law.”
But it’s not entirely clear Pennsylvanians for Accountability is operating outside the law.
The state law concerning political advertisements by individuals or groups that are not registered as political action committees is clear. It reads that any person “who makes independent expenditures expressly advocating the election or defeat of a clearly identified candidate” must disclose financial information.
But Pennsylvanians for Accountability did not specifically use words such as “vote against” or “defeat” in their ads targeting House Republicans last year. The same is true of their current ads attacking Corbett for giving corporate tax breaks while supposedly cutting education funding.
“Anything short of that and you can make a case that it is issue advocacy,” said Ron Ruman, spokesman for the stateDepartment of State. Nonprofits registered with the department are allowed to spend on advertisements for issue advocacy without disclosing donors.
But Metcalfe said it should be “clear” the mailers issued by Pennsylvanians for Accountability in October were intended to influence the outcome of the election. He said the context of the ads and the proximity to the election should be considered when determining whether an ad is “expressly advocating” for or against a candidate.
Barry Kauffman, executive director of Common Cause Pennsylvania, a nonprofit that advocates for transparent and accountable government, said campaign finance reforms in Pennsylvania are long overdue.
He said the state should set contribution limits and tighten rules on nonprofits that are acting politically.
“If they are doing things that anyone would recognize as campaign activity, but they dodge the reporting rules by not registering as a PAC, that is something that should change,” he said.
Metcalfe said the Department of State and the Attorney General will participate in the hearing. No legislation is planned, he said.
The attorney general’s office did not return requests for comment Thursday.