AG Schneiderman Looks to Force Big Donor Disclosure

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Organizations connected to the AFL-CIO and anti-tax activist Grover Norquist are among those being scrutinized by New York Attorney General Eric Schneiderman for possible violations of New York charity laws, WNYC has learned. The groups under scrutiny are some of the most powerful in politics, and are spending millions of dollars on television ads that are being funded by - so far - secret donors.

Alliance for Retired Americans Educational Fund, which is affiliated with the AFL-CIO, and Americans for Tax Reform Foundation, a powerful group that has strong ties to Republican Congressional Leadership, all of whom have signed on to the Americans for Tax Reform’s anti-tax pledge, are two groups Schneiderman is looking into.

David Blank, a spokesperson for the the Retired Americans group, said he was aware of the inquiry but that his group had fully complied with the law. The anti-tax group did not respond to inquiries.

The organizations are among the so-called 501c4 groups that are running political advertising that often seems indistinguishable from regular campaign ads. They are named from the section of IRS code that regulates the education or lobbying arms of non-profit organizations.

Following the Supreme Court’s 2009 Citizens United decision, which allowed unlimited corporate and labor donations to campaigns, businesses and groups have flooded the airwaves with ads run by 501c4’s. Unlike regular campaign committees or Super PACS, the 501c4’s are not required to disclose their donors.   

Many campaign finance analysts, and at least two federal authorities, the IRS and the FEC, view the spending as legal. But New York attorney general Eric Schneiderman, who is considered an activist attorney general who often gets out ahead of many in his own party, believes a section of New York charities law enables him to regulate any group that collects more than $25,000 from New York state donors.   

According to sources familiar with the investigation, he’s asked some two dozen groups to furnish New York State with additional information.

Under Schneiderman's interpretation of the law, the groups are required to file financial information with New York State, because donors from New York have contributed at least $25,000 to the groups.   But sources familiar with the inquiry say the required information has not been submitted, and, as a result, Schneiderman has asked for tax returns and other financial documents from the groups.

 The groups include Crossroads GPS, linked to Republican political guru Karl Rove, and Priorities USA, linked to President Barack Obama.

The inquiry was first reported in the New York Times. Last week WNYC reported on a 501c4 tied to New Jersey Governor Chris Christie, Committee for Our Children’s Future, that is running millions of dollars of television ads touting Christie’s accomplishments as governor. 

Christie's office told WNYC he doesn’t have anything to do with the group, and that “They’re a group of great Americans who want to support someone who has great ideas.  That’s good for them, and as long as they’re complying with the law, I think that’s what they should do.”

There is no indication Committee for Our Children’s Future has received an inquiry letter from the New York Attorney General.