Laundering political money

From the Chicago Tribune

Laundering political money
Published November 24, 2004
The same laws of hydrodynamics that apply to rickety rowboats apply, alas, to campaign disclosure laws. If there's a hole in the bottom, it will be found--whether by water or by clever political operatives.
Last year, Illinois passed broad ethics reforms, including an attempt to tighten the financial disclosure requirements for groups that campaign for or against political candidates. It was a reasonable effort to give voters more information about who puts the money into campaigns.
Election officials are suddenly realizing, however, that the reform has been easy to evade. To get around the disclosure requirements, interest groups are forming non-profit corporations. The corporations donate money to political action committees, which donate money to candidates. The PACs and the candidates have to report who gave them money. The corporations don't.
It's a clever trick to hide who is bankrolling the campaigns. Some might even call it political money laundering.
This played out glaringly in the recent Supreme Court race in southern Illinois, which turned into a referendum on tort reform and an incredibly expensive campaign.
According to a St. Louis Post-Dispatch analysis of political contributions, these kinds of murky corporations funneled more than $500,000 to the campaigns for the high court. Something called The Justice For All Foundation formed in June and gave $383,000 to a political action committee of the same name and address, which gave more than $1 million to Democrat Gordon Maag. The PAC is funded largely by trial lawyers who oppose efforts to place damage caps on civil lawsuits--which the Illinois Supreme Court has twice rejected. But the foundation? It's probably funded by the same people, but it's impossible to be certain because the foundation is not required to identify its contributors. There's some thought that the foundation provided a funnel for out-of-state trial lawyers who wanted to influence the Supreme Court race but didn't want their efforts to become an issue in the campaign.
On the Republican side, something called the Illinois Coalition for Jobs, Growth and Prosperity formed as a non-profit corporation and gave at least $445,000 to a PAC of the same name and address. Roughly a third of that money made its way to the GOP's Lloyd Karmeier, who won the Supreme Court race. There's less mystery about who's behind that corporation--its Web site identifies its backers as pro-business groups such as the Illinois Manufacturers' Association. Still, no one knows just who coughed up the $445,000 for Karmeier.
The genesis of this political game in Illinois can be found in the 2002 race for attorney general. A group called the Law Enforcement Alliance of America, purporting to represent police officers and crime victims, ran some misleading ads on behalf of GOP candidate Joseph Birkett, apparently without Birkett's involvement.
The group appeared to be a front for the national gun lobby, but it was hard to tell because disclosure laws at the time didn't require the LEAA to reveal where its money came from. The new law would. But it appears that it took more time to draft the new law than it did for someone to find a way around it.
Illinois has very few rules on political contributions and expenditures. All that's asked is that the public be told who is making the contributions and how the money is spent. That's it.
Yet we're back to grappling again with how to enforce even those requirements. The State Board of Elections is looking into whether the corporations, in fact, did violate the law. Of course, it's too late for anything disclosed now to help voters in the Supreme Court race.
The legislature, which made a good effort in 2003 to set a higher standard for government and politics, needs to go back at it. If it doesn't, expect to see more "corporations" created to hide from the public who's bankrolling the politicians.