Americans for Prosperity spent tens of millions of dollars on the 2010 election and will spend tens of millions more this year to see conservative advocates of limited government elected — all without revealing any of its contributors.
Taking advantage of a complex web of federal laws, the group, founded and financed by billionaire industrialists David and Charles Koch, has successfully kept its donors secret.
But when AFP decided to wade into a Nevada Senate primary in June, it may have triggered a state law that could open its donor list to the public.
In a complaint filed Thursday, the Nevada Democratic Party asked Secretary of State Ross Miller to investigate whether the nonprofit organization must report the contributions it received to fund mailers attacking state Senate candidate Kelvin Atkinson, a Democratic assemblyman from North Las Vegas.
Under federal law, political nonprofits such as AFP can escape disclosure requirements by not including words such as “vote for” or “defeat” in political messaging.
Under state law, it doesn’t matter whether those words are used or not.
If there can be “no other reasonable interpretation” than that the ad seeks the election or defeat of a candidate, then the producer must disclose the funding source for the ad.
“If you get in state races, you expose yourself,” said one Democrat familiar with the complaint.
In this case, AFP sent mailers into Atkinson’s district just before the June 6 primary election, with his picture and accusations that he worked for special interests and sought a $1 billion electricity rate increase.
The mailers didn’t say “vote against” Atkinson; rather, they urged voters to call his office and tell him what they thought of his record.
But Miller has aggressively enforced the concept in Nevada that such mailers are clearly designed to influence an election and that the money associated with producing them should be reported.
He’s filed suit against an out-of-state group that spent money attacking former Gov. Jim Gibbons in his 2010 primary against Brian Sandoval, and he filed a civil complaint against Citizens Outreach for failing to report contributors that funded a similar attack mailer against Assemblyman John Oceguera.
Miller also succeeded in passing legislation last year to strengthen the definition of what constitutes political advertising.
Despite aggressively pursuing such cases, Miller hasn’t yet been successful in compelling such groups to report their donors. Both cases are slowly winding their way through the court system, stretching well beyond the elections the groups sought to influence.
Still, AFP is intent on building a lasting nationwide network to promote its limited government philosophy and has been just as intent on keeping its donors anonymous.
It operates a Nevada chapter, which is likely funded mostly through the national headquarters.
But AFP doesn’t appear to have organized a separate Nevada entity, which could mean donors to the national organization might have to be disclosed.
The potential has piqued the interest of advocates for campaign finance transparency.
“It all depends what state law requires,” said Paul Ryan, senior counsel for the Campaign Legal Center in Washington, D.C. “I’ll be interested in watching this one.”
Ryan said AFP’s tax-exempt status as a nonprofit could also be threatened if the Nevada group is proven to be engaging primarily in political activity.
“There’s definitely tension there,” he said.
As for AFP, Nevada chapter Director Adam Stryker, who coordinated the mailers against Atkinson, said he thinks the organization was working within the confines of Nevada state law.
“Basically, we kept a close eye on the bills Ross had last year, and our lawyers are confident that we did not cross the line into express advocacy,” Stryker said.