From Deseret News archives:

Cannon critics sidestep FEC lists

Nonprofit groups are exempt from disclosure laws

Published: Saturday, July 17, 2004 12:56 a.m. MDT
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Thursday marked the deadline for federal candidates to file their campaign finance reports with the Federal Election Commission (FEC). But at least some of those who spent money in Utah's 3rd Congressional District Republican primary won't have to disclose their funding sources because they are in nonprofit categories exempted from reporting.

Two immigration reform groups that blasted Rep. Chris Cannon's immigration policy during the primary election campaign are in exempt categories and as such don't have to disclose their donors. So is a tax reform group that approved of Cannon's policies.

Cannon defeated challenger Matt Throckmorton in last month's Republican primary.

According to the Internal Revenue Service, nonprofit groups generally don't have to disclose their donors unless they fall under the specific category of private foundation or political organization. As long as they stick to their registered purpose, groups such as the following don't have to disclose:

Americans for Tax Reform, a 501c(4) organization, which called voters in the district to tell them that Cannon had signed a pledge to vote against increasing taxes. Throckmorton did not sign that pledge.

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Coalition for the Future American Worker, an umbrella group comprised of 501c(4)s, unincorporated groups, and a political action committee or PAC (which does have to file with the FEC). This group sponsored radio ads targeting Cannon's immigration policy.

ProjectUSA, a 501c(3), which sponsored billboards saying that Cannon supports amnesty for illegal immigrants. Its Web site targets nine congressional districts based on immigration policy grades generated by another immigration group, Americans for Better Immigration.

Matthew Burbank, associate professor of political science at the University of Utah, said special-interest groups have always existed. The 2002 McCain-Finegold campaign reform put more restrictions on how candidates can raise their money. And would-be donors have now turned to so-called "issue" groups — organizations that target political issues rather than candidates, he said.

"We now have organizations that exist because parties can no longer accept soft money," Burbank said. Special-interest groups "can still accept these large contributions, can spend the money now that parties can't."

While outside issue groups can legally get involved in politics, as long as they follow guidelines, tax attorneys did question whether one such anti-immigration group, ProjectUSA, is registered as the correct type of nonprofit.

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