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May 30th, 2012 NIGEL JAQUISS | News Stories
 

A Growing Oregon Loophole

Independent campaign expenditures here are soaring—and invisible.

news1_3830ILLUSTRATION: thomasjamesillustration.com
An army of canvassers hit the streets in April and May to rescue state Rep. Mike Schaufler (D-Happy Valley) from defeat. Many of the workers knocking on doors for Schaufler in the May 15 primary were paid to drum up votes for the five-term incumbent.

But who paid them at first wasn’t clear: For many canvassers, there was no record of payment in Schaufler’s campaign finance reports, or the political campaign committees trying to help Schaufler. (His primary challenger, Jeff Reardon, handily beat Schaufler by a 2-1 ratio.)

WW has figured out who bankrolled some of the canvassers—a pro-business group called Grow Oregon.

Grow Oregon and other groups used a little-known loophole in the state’s campaign finance disclosure rules that has kept hundreds of thousands of dollars in recent political spending out of public view.

The state Elections Division, under Secretary of State Kate Brown, could have fixed this problem by making information about the spending easily available, but has allowed spending reports to remain hidden.

Most political spending is logged in the state’s online campaign finance reporting system, ORESTAR. The database allows anyone to view campaign contributions and expenditures for any race in Oregon.

But the state Elections Division has allowed a whole class of spending, so-called “independent expenditures,” to remain hidden from public view. 

Rather than look up information about such spending online, you have to go to Salem, to Brown’s office, and ask to see the paper filings. They are kept out of sight, in a black three-ring binder under a counter, where only a handful of people know they’re located—or even exist.

“The political players paying for these independent political campaign activities are inappropriately flying under the radar screen,” says Janice Thompson of the watchdog group Common Cause Oregon.

It’s there that WW found Grow Oregon spent $9,946 on Schaufler’s behalf, much of it with the Signature Gathering Company of Oregon, co-founded by lobbyist Mark Nelson. Two other groups made independent expenditures totaling $6,000 for Schaufler, and a group called Progressive Kick spent $13,000 to benefit Reardon.

Nationally, independent expenditures have gotten a lot of coverage in the presidential race, thanks to the Citizens United case. The U.S. Supreme Court ruled that corporations and unions can contribute and spend unlimited amounts of money on political campaigning, if their efforts aren’t coordinated with candidates.

But federal races are different from Oregon campaigns. Oregon is one of only four states that do not limit campaign expenditures; federal campaigns do, and the Citizens United case allows donors to skirt those limits as long as their spending is “independent.”

State Elections Director Steve Trout says independent expenditures were originally left out of ORESTAR because they were rare and small. “Starting in 2010, we began to see more and bigger contributions,” Trout says.

Trout says no one has made the lack of transparency an issue until Thompson and WW raised questions. He says he hopes the Elections Division will start posting electronic copies of independent expenditures in advance of the November election, and his boss may ask the 2013 Legislature to update ORESTAR.

There’s no reason the Elections Division should continue to make it so difficult to track these disclosures. And the three-ring binder kept hidden in Brown’s office contains some eye-popping independent expenditures. 

In 2010, the National Rifle Association spent $102,000 on GOP gubernatorial candidate Chris Dudley. The American Federation of Teachers spent $275,000 on his opponent, now-Gov. John Kitzhaber, a Democrat. The Oregon League of Conservation Voters spent $385,000 to help Bob Stacey, who ran unsuccessfully for Metro president. 

Grow Oregon enjoys additional secrecy. As WW first reported last year, Grow Oregon is not a PAC but a 501(c)(4) nonprofit, which means it does not need to disclose the sources of its funding.

Justin Delaney, government affairs director for the Standard insurance company and a spokesman for Grow Oregon, declined to comment on the group’s membership or speculation that the group plans to spend up to $1 million in the November election cycle.

People familiar with the group say it has 30 to 40 members, including the Standard, Nike, Schnitzer Steel, Columbia Sportswear, U.S. Bank, and the Oregon Business Association.

Those sources say it takes $25,000 to get a seat at the Grow Oregon table. Two business groups required to report their political spending, Associated General Contractors and Associated Oregon Industries, each gave $25,000 to Grow Oregon in January.

Common Cause’s Thompson says a fix is overdue: “Evaluating campaign messages from independent political players, especially in comparison to messages directly from candidates, requires knowing who is paying the bill.” 

 
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