Dems target Carolina Rising ads in two complaints

The N.C. Democratic Party says Carolina Rising, a group that backs Republican candidates, has violated federal and state fundraising laws. The group's director calls the complaint "laughable."

Posted 12:50 a.m. Oct 10, 2014 — Updated 1:36 a.m. Oct 10, 2014

Mark Binker

RALEIGH, N.C. — The North Carolina Democratic Party has filed a pair of complaints alleging that Carolina Rising, a nonprofit that backs Republican candidates and causes, failed to properly disclose its activities to federal and state regulators.

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Both complaints address what Democratic Party Executive Director Casey Mann calls "systemic abuses" by the nonprofit group.The party, she said, "simply cannot stand idly by when local and national entities refuse to play by the rules and attempt to manipulate the system to shroud their donors and interfere with our elections."

Carolina Rising has aired three campaign-style ads this year backing House Speaker Thom Tillis, two of which praise his leadership on economic issues and another that touts his work on behalf of children with autism.

The party's complaint to the Federal Elections Commission hinges on when nonprofit groups have to disclose their donors. Established nonprofits that pursue multiple activities usually don't have to say who gave them money, even when they air campaign-style advertising.

However, that exemption doesn't apply if the money in question was raised for the express purpose of airing ads. In other words, if a nonprofit like Carolina Rising took money from people with the understanding it would be used in a political campaign, those donors would have to be disclosed.

The Democratic Party documented $2.8 million in spending disclosed by Carolina Rising for ads airing in September and October.

"A newly formed nonprofit cannot purchase $2.8 million of airtime unless significant donations were made to the entity very recently," Mann's complaint to the FEC reads.

The party alleges that there's no other way Carolina Rising could have raised the money without it being earmarked to support Tillis.

Carolina Rising President Dallas Woodhouse brushed aside the complaint, saying his group complies with the law.

"This complaint is laughable," Woodhouse said in a statement. "It is the policy of Carolina Rising to only accept donations for general obligation purposes. As the president of Carolina Rising, spending decisions are mine in consultation with our Board of Directors. We have been successful in raising significant dollars this year because of our commitment to truthfully speak to issues and avoid personal attacks.

"As always, when Democrats can't win in the court of public opinion, they pull out their bucket of slime, lie about their opponents and run to big government and the courts for more bites of the apple," he continued. "It is a shame their party has turned against the First Amendment and free political speech."

While complaints over nonprofit spending in political campaigns have been well litigated in federal courts, case law on the issue of a new nonprofit funneling money into an election is scarce, said a lawyer familiar with campaign finance law.

State complaint

In her complaint to the Secretary of State's Office, Mann points to a state law that requires nonprofits that solicit donations in North Carolina to obtain a charitable solicitation license.

Carolina Rising does not yet have such a license, but it does have mechanism on its website that allows people to donate.

"Carolina Rising is in violation of that requirement," Mann said.

Woodhouse said that he has consulted with officials at the Secretary of State's Office before Mann's complaint.

"We do not feel we need to file under that section of the law but have agreed to do so. We have to the end of October to do so, which we will," Woodhouse said.

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