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The money behind the ads

The state should require political advertisers to reveal who's paying and where they got their money.

October 30, 2010

A political action committee formed by the California Chamber of Commerce has spent more than $3.8 million in recent weeks to defeat the Democratic candidate for insurance commissioner, Assemblyman Dave Jones of Sacramento. Almost three-fourths of the PAC's money for the final campaign push has come from the insurance companies that would be regulated by the winner of the race between Jones and Republican Assemblyman Mike Villines of Clovis. Meanwhile, political committees backed largely by trial lawyers spent at least $420,000 on radio ads during the same period to support Jones and bash Villines.

Those statistics — gleaned from Cal-Access, the secretary of state's online database of campaign contributions — provide a revealing picture of how key interest groups view Jones and Villines, both of whom have pledged not to take money directly from insurers. Regardless of how voters feel about the candidates' positions on the issues, it helps to know who's behind the race's independent electioneering. That information isn't always obvious to voters, though, because commercials and mailers don't necessarily have to identify the real source of their financing. For example, the anti-Jones ads say they were paid for by something called JobsPAC, but do not reveal that most of the funding for JobsPAC came from insurers.

Such details can be extracted from Cal-Access because the insurance commissioner's race is governed by state election rules, not federal ones. Under the Federal Election Commission's rules, the insurers, trial lawyers and unions could have funneled their contributions through a nonprofit that's not required to reveal its donors, such as Revere America on the right or Women's Voices Women Vote Action Fund on the left. Up to $110 million in anonymous cash has been spent by these groups in 168 congressional races this year, according to the Sunlight Foundation. In addition, nonprofits registered under Section 527 of the tax code don't have to disclose donations that arrive late in federal campaigns until after the election.

California law has its own loopholes. For example, groups that independently run "issue ads" — commercials that praise or lambaste a candidate without explicitly telling people which way to vote — more than 45 days before an election don't have to reveal anything about their funding. That's why there was not only no disclosure of where the California Chamber of Commerce got the money it spent on an ad campaign praising Villines in September, but no report to Cal-Access by the chamber that it had spent anything at all.

Because the Supreme Court has allowed companies, unions and advocacy groups to pour so much money into campaigns, it's vital that voters be told which interests are trying to influence them. That's why the FEC should require nonprofits to reveal their major donors, and why the state should require campaign ads to include not just who's paying for them but where they got the bulk of their money.

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