POLITICS
07/31/2014 07:31 am ET | Updated Jul 31, 2014

Corporations Have Found Yet Another (Secret) Way To Help Get Politicians Elected

WASHINGTON -- On June 14, 2012, someone created a corporation in Ohio called American Dream Fund LLC. Six months later, this corporation made a $250,000 contribution to a super PAC called Advancing Freedom Action Network, which supports the re-election of Ohio Secretary of State Jon Husted (R).

The actual person behind American Dream Fund LLC remains unknown. The limited liability corporation was created by an incorporation firm called CT Corporation System. The LLC's listed agents are simply hired incorporators working for CT Corporation System.

The contribution itself was even made harder to detect. Advancing Freedom Action Network, which was registered with the Federal Election Commission in August 2012 by Husted ally Kevin DeWine, failed to file reports electronically, as required by law. The American Dream Fund contribution appeared only on a paper report, where it was apparently missed by the FEC staff and automated software. It is not noted on the FEC's webpage for the super PAC or in other campaign contribution databases across the Internet.

DeWine did not respond to a request for comment.

The American Dream Fund contribution may be one of the largest and hardest to trace of the many corporate donations made to super PACs in the current election cycle, but it is not alone.

By the end of June, corporate contributions to super PACs -- that is, contributions directly from corporations and not from their executives or in-house super PACs -- had reached $10.9 million for the entire 2014 election cycle, according to a review of FEC records by The Huffington Post. This remains just a small percentage of the more than $300 million contributed to all super PACs over the same period of time. But a number of these groups relied heavily on corporate contributions, including from the difficult-to-trace LLCs.

Corporations are allowed to spend money on direct political expenditures so long as they remain independent from candidate campaigns and party committees. The Supreme Court's 2010 Citizens United ruling overturned a 1990 decision banning such spending, while a subsequent lower court ruling based on Citizens United led to the creation of super PACs.

In 2012, controversy erupted over a $1 million contribution to Restore Our Future, a super PAC supporting GOP nominee Mitt Romney's presidential campaign, from an unknown company named W Spann LLC. The owner of the company was eventually revealed to be former Bain Capital executive Ed Conard.

"It would be against the law if a donor would come up with an alias and call himself 'Danny Deep Pockets' and give a million, but it's not against the law if he comes up with an LLC," said Bill Allison, editorial director of the pro-transparency nonprofit Sunlight Foundation, which tracks and reports on LLC contributions. And yet, Allison noted, the insertion of LLCs into the political money chain means that "you can't really follow the money."

In the 2014 election cycle, 40 super PACs have received at least $50,000 from corporations, with 13 of these groups getting at least half of their contributions from corporate entities and 27 getting at least 10 percent. The vast majority of the groups receiving substantial portions of their funds from corporate coffers support a single candidate or are linked to a single elected official.

Advancing Freedom Action Network is one of the six super PACs receiving more than 90 percent of their funds from corporations. Five of these back just a single candidate, while the sixth, Freedom Partners Action Network, is part of the billionaire Koch brothers' political network.

Super PACs Receiving More Than 10 Percent of Their Funds From Corporations

Source: Federal Election Commission

Montana Republican House candidate Corey Stapleton and Texas Democratic Senate candidate Maxey Scherr, both of whom lost their primary bids, were backed by groups that raised all their funds from corporations. The Mallot-One Alaska PAC, which supports Alaska Democratic gubernatorial candidate Byron Mallot, is the only other super PAC receiving all its money from corporations. In the latter case, the $50,000 super PAC donation came from SeaAlaska, a Native Alaskan corporation run by Mallot's son.

Alex Mooney, the Republican nominee for West Virginia's 2nd Congressional District seat, won his primary election with the help of the Freedom Frontier Action Network. The group received 99.94 percent of its funds from corporations. These included a $25,000 contribution from HSP Direct, a direct mail fundraising firm that has paid Mooney more than $5,000 for "business development/consulting" in the past year, according to Republic Report. HSP Direct did not respond to a request for comment.

Another direct mail firm, Capitol Hill Lists LLC, gave $65,000 to Freedom Frontier Action Network. A woman who identified a listed phone number as belonging to Capitol Hill Lists stated that she was busy and hung up the phone after being asked to comment on the contributions.

The other donation to the pro-Mooney super PAC came from Boston Holding Company LLC, located at One Boston Place, which is a major office building in that city boasting such high-profile tenants as the Bank of New York Mellon. There is no corporation named Boston Holding Company registered in Massachusetts.

There is a Boston Holding Company LLC located in Clearwater, Florida, and registered to Leo Govoni, the head of Boston Asset Management. This Boston Holding Company LLC has given $100,000 to American Crossroads, the super PAC co-founded by Karl Rove. Govoni and Elizabeth Sauer, another Boston Asset Management employee, both donated to Mooney's campaign. It is unclear, however, if the Florida company is the same one donating to the super PAC supporting Mooney's bid. The company did not immediately respond to a request for comment.

Like American Dream Fund LLC, Grant Capital LLC gave a quarter-million-dollar super PAC donation -- in its case, to former United Nations Ambassador John Bolton's eponymous super PAC. The LLC gives an address that is the same as one occupied by Eugene M. Grant & Company, a New York real estate firm. An attempt to confirm a connection between the companies did not receive a response.

Virginia Progress, a super PAC supporting Sen. Mark Warner (D-Va.), received a $150,000 contribution from Alcantara LLC, which is listed in Securities and Exchange Commission filings as a subsidiary company of the Virginia-based technology firm MicroStrategy and wholly owned by MicroStrategy CEO Michael Saylor. A prominent member of Virginia's tech elite, Saylor is also a close friend of Warner's. The company did not respond to a request for comment.

Hillside Jetty Pelagic LLC, a Seattle subsidiary of the independent fishing company Fishermen's Finest, gave $100,000 to Put Alaska First, the super PAC supporting Sen. Mark Begich (D-Alaska).

The only other six-figure contribution from an LLC to a super PAC came from the Nevada-based T. Star III. The company gave $100,000 to Congressional Leadership Fund, a group with connections to House Speaker John Boehner (R-Ohio). Jon Ralston, Nevada's premier political reporter, has noted that T. Star III is one of many LLCs used by Bill Walters, the Las Vegas real estate owner and high-stakes gambler, to contribute to state politicians.

Another LLC contribution may have come from the NFL's Arizona Cardinals in the form of a $50,000 gift from Cholla West LLC to American Crossroads. Cholla West LLC shares an address with the Cardinals. Bill Bidwill and his family, who own and operate the team, are prominent Republican donors.

Publicly traded corporations are almost completely absent from the list of corporate super PAC donors. The former corporations tend to push political action through trade associations. The only public companies making donations above $10,000 in this year's election -- aside from MicroStrategy, which gave through its subsidiary Alcantara -- were Hallador Energy Company, Masimo Corporation, NextEra Energy, Apollo Group and Potlatch.

The top four corporate donors were all private companies. Mostyn Law Firm, run by Houston trial lawyer and Democratic mega-donor Steve Mostyn, is the largest corporate donor with $1.14 million in contributions to super PACs. Mostyn Law's biggest donations have gone to a gun control group launched by former Rep. Gabrielle Giffords (D-Ariz.). Steve Mostyn serves as treasurer of that group.

Contran Corporation, the Texas conglomerate run by Harold Simmons before he died in 2013, gave $1 million to American Crossroads. The company was the largest corporate donor in the 2012 elections, but due to Simmons' death is unlikely to make such donations again.

The poultry-producing Mountaire Corporation has given $600,000 to super PACs, with $500,000 going to the Kochs' Freedom Partners Action Network and $100,000 to Senate Conservatives Action.

The last leading corporate donor is the Tulsa, Oklahoma-based Rooney Holdings, owned by L. Francis Rooney, former U.S. ambassador to the Vatican. The holding company -- which has interests in real estate, finance and insurance, among other pursuits -- has given $400,000 to super PACs supporting Republicans.

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