The Secret Sponsors
Sitting on a living room carpet and addressing the camera in a dubbed voice that growls like a Vegas bookie, he tells viewers, “Gramps is sad — Obama cut $455 billion from his Medicare.” He warns of dire consequences from the health insurance overhaul if voters do not take action in November.
“I don’t know what smells worse,” the little guy huffs, “my diaper or this new bill.”
A sign-off informs the television audience that this high-minded piece of issue advocacy was paid for by the “Coalition to Protect Seniors.”
Who are the members of the coalition? Where do they get their money? And why are they spending hundreds of thousands of dollars attacking candidates for Congress around the country?
Obvious questions, and yet they are difficult to answer, given the increased use of tax-exempt organizations as vehicles for campaign spending.
Nonprofits can raise unlimited amounts, and spend a good percentage of that on political activities. But they are generally not required to publicly disclose their donors, making them appealing to moneyed interests who prefer to stay in the shadows.
A recent report by Public Citizen found that in the 2004 elections, 98 percent of outside groups disclosed the names of donors who paid for their political ads; this time around, only 32 percent have done so. The report suggested that groups were taking advantage of a loosening of disclosure requirements and loopholes. Meanwhile, the amount of money spent by these groups skyrocketed to more than $100 million as of last week, more than twice that of the midterms four years ago.
Corporations and unions can now spend freely in elections, under a recent Supreme Court ruling, but they still must disclose their activities. That’s why an intermediary that is not required to disclose its donors is attractive to politically active businesses that might want to conceal their activity.
“Corporations are reluctant to be associated with specific ad campaigns,” said Paul Ryan, an election law expert at the nonpartisan Campaign Legal Center. “I expect more money to go to intermediary groups.”
Reporters are paid to try to get around these barriers, and we have resources at our disposal that the average person does not. I’ll get on a plane if necessary to go confront someone, meet a source or check out an address. News organizations subscribe to public records databases, and go to court to try to force disclosure of important information.
To see just how hard it is to crack the secrecy that shrouds the vaguely named groups bombarding the airwaves, I went looking for one that seemed typical of the trend. The Coalition to Protect Seniors, with its attention-grabbing ads and middle-of-the-pack spending — about $400,000 as of last week — fit the bill.
I also decided to limit myself to the tools that an average voter might have: the Internet and a telephone.
My first stop was the coalition’s Web site, which featured an image of two glum-looking old people and lots of facts and figures asserting that the elderly are at risk from “Obamacare.” There was no phone number. No names of anyone involved with it. An address listed there turned out to belong to a Mail Boxes Etc. store in Wilmington, Del.
Clicking on the “contact us” tab, I sent off an e-mail to the coalition, with all the confidence of tossing a bottled note into the ocean. (I never heard back.)
I called a few political consultants, both Republicans and Democrats. All right, I’ll admit your average voter does not have numbers for Washington political operatives programmed into their cellphones, but I needed to start somewhere. As it happened, none of them knew anything about this group.
“Is that the one with the talking baby?” one of them said.
I went a little deeper. A check of incorporation filings showed that the coalition was formed as a nonprofit in June, around the same time its Web site went up. It listed a registered service agent — someone who accepts legal papers on a company’s behalf — as its official address; a hosting service held its Internet domain name, further masking its actual location and the people behind it.
No in-depth news stories had been done about it. A search for lawsuits, tax filings, liens, property records — any sort of public document I could think of — yielded nothing.
Maybe the spending reports it files with the Federal Election Commission would provide a clue. As with other so-called independent groups that support or oppose candidates, the coalition must disclose its expenditures, although it does not need to reveal the sources of its cash.
The filings showed that it had been busy running TV ads and sending out mailers opposing candidates who supported the health care bill. It reported spending $108,000 in the first few weeks of September to campaign against eight Democrats, including Harry Reid of Nevada, the Senate majority leader; Senator Michael Bennett of Colorado; and Senator Claire McCaskill of Missouri.
Like its Web site, the coalition’s F.E.C. filings also gave its address as Delaware, where many corporations are registered in name only because of the state’s business-friendly tax and disclosure laws.
The address on the coalition’s filings was a suite in a large office building in Wilmington that seemed to be shared by an array of other businesses involved in the health care, financial services and energy industries. Calls to several of them turned up none that acknowledged knowing anything about the coalition.
One last clue emerged from the filings. They showed that much of its money had gone to a Florida consulting firm, the Fenwick Group, a two-person outfit whose Web site listed other clients that included health care and technology companies.
I called the phone number for Fenwick. A man answered.
“K & M Insurance,” he said.
“I’m looking to speak to somebody with the Fenwick Group,” I said.
“Oh, that would be Jay.”
I was sent to the voice mailbox of someone named Jay Handline. I hung up without leaving a message and pondered this latest development.
Why, I wondered, did the number for the coalition’s campaign consultant ring at an insurance company? Looking at K M’s Web site, I saw that it is a broker for seven large health insurance providers, including Aetna, Blue Cross, Humana and United Healthcare.
Mr. Handline, it turns out, also serves as the chief marketing officer of Convergence Health, a health care technology company. That is, when he is not running Dance Trance, a dance fitness studio where he is known as a “nationally acclaimed jazz funk fusion choreographer,” according to its Web site.
“People of all ages are welcome to come and groove to the thumpin’ music!” it says.
I tried the Fenwick number again, and this time Mr. Handline picked up. He said he was not a member of the coalition and only placed its television ads, adding that he got the job through someone in the health care field for whom he had done similar work in the past. He would not name the person
“But they’re not a member of the coalition either,” he said.
So who are the members?
“I really can’t give you any details.”
He took down my number and said he would see if anyone in the coalition wanted to talk about it. No one did.
I suppose I could keep nosing around by traveling to Delaware, or better yet, Florida (I haven’t grooved to the music in a long time). It may yet come to that.
At any rate, it is clearly going to take a lot more work to see through an organization that is about as transparent as a dirty diaper.