Watchdogs to FEC: American Future Fund Appears to Be Violating Campaign Finance Law

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Watchdogs to FEC: American Future Fund Appears to Be Violating Campaign Finance Law

Conservative Organization Appears to Operate As a Political Committee But Is Registered As Nonprofit, Say Groups

WASHINGTON - American Future Fund, a conservative nonprofit group pouring money
into the 2010 midterm elections, appears to be violating campaign
finance law, watchdog groups said in a complaint filed today with the
Federal Election Commission (FEC).

The FEC should investigate whether American Future Fund must register
as a political committee for its huge expenditures in the election,
making the group subject to recordkeeping, reporting and disclosure
requirements, Public Citizen, Protect Our Elections and the Center for
Media and Democracy said in the complaint, available at http://www.velvetrevolution.us/images/FEC_Final_Complaint_AmericanFutureFund101510.pdf.

The group is registered as a 501(c)(4) organization, which under IRS
tax code cannot have a primary purpose of influencing elections.
Similarly, federal election law provides that if a group’s major purpose
is electioneering and it spends at least $1,000 to influence elections,
it must register as a political committee. American Future Fund’s major
activity appears to be its extensive electioneering activities, the
watchdogs argue.

American Future Fund reportedly has devoted more than half its
advertising spending this year – approximately $3 million as of a few
days ago – on television ads that expressly call on voters to vote for
or against particular candidates, the complaint said, citing a recent
New York Times analysis. These ads attack candidates in more than a
dozen congressional districts, such as Reps. Mark Schauer (D-Ind.),
Martin Heinrich (D-N.M.), Bruce Braley (D-Iowa) and West Virginia State
Sen. Mike Oliverio, also a Democrat.

Including ads that expressly tell voters how they should vote and
other ads with electioneering messages, American Future Fund, created in
2007, has spent nearly $8.8 million so far to influence the 2010
elections, making it among the highest-spending groups participating in
electioneering, according to Public Citizen’s analysis of FEC records.
The organization’s website even highlights its efforts to “target” what
it calls “liberal politicians.” And according to published reports, the
group plans to spend up to $25 million on the elections.

“American Future Fund is pulling out the stops to ensure that
Republicans are elected this November,” said Craig Holman, government
affairs lobbyist with Public Citizen. “That imposes on the group the
legal duty to register with the FEC and disclose exactly who is funding
all those expenditures.”

The FEC requires political committees to disclose comprehensive
information regarding their financial activities, including the identity
of any donor who has contributed $200 or more to the committee within
the calendar year. IRS rules for 501(c)(4) organizations do not require
such disclosures and, hiding behind this nonprofit tax status, American
Future Foundation has not made its donor information public.

“In this first post-Citizens United election, corporations and their
executives are testing the limits of the law and crossing over into
illegality,” said Kevin Zeese, spokesperson for ProtectOurElections.org.
“They cross the line when they use nonprofit groups to urge people to
vote ‘for’ or ‘against’ a specific candidate. Political committees
violate the law when they accept anonymous contributions for their work.
These violations of federal election and tax laws need to be challenged
now; otherwise we will see even more anonymous corporate donations
trying to illegally manipulate voters into voting against their own
interests in future elections.”

Added Lisa Graves, executive director of the Center for Media and
Democracy, which investigates corporate front groups, “Groups spending
millions to attack Americans running for office should not be able to
use their tax-free status to hide the truth about which fat cats are
behind their ads. Voters have a right to know which corporations or
millionaires are laundering their profits through nonprofits like the
American Future Fund, whose main business seems to be electioneering. We
have joined this complaint to demand that the law be enforced and the
truth be told.”

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Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.

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