Opinion says lawmakers can raise money for political nonprofits

Posted December 30, 2014

WRAL Investigates The Money Trail

— North Carolina lawmakers are allowed to raise money for political nonprofits that raise money to lobby or elect members to the legislature, according to a recent legislative ethics opinion.

While other state and federal laws come into play, the opinion appears to erode the separation between purportedly independent political spenders and the candidates and lawmakers they support. It could pave the way for lawmakers to raise unlimited sums of money for politically driven nonprofits, even during legislative sessions when conventional fundraising activities are limited.

"I believe that it certainly provides a path for that kind of giving," said Michael Weisel, a lawyer who specializes in election law, mainly working for Democratic candidates and causes. "My opinion is that the State Board of Elections will probably want to weigh in from an elections law perspective, but from an ethical perspective, the ethics committee has spoken."

Raising money for political nonprofits is frequently easier than gathering cash into campaign accounts because the same fundraising limits don't apply and nonprofits are often not required to disclose the names of donors. As well, nonprofits can raise money from interested groups when an important legislative decision is approaching, rather than having to wait like lawmakers until after the legislature concludes its business for the year. 

The opinion, dated Nov. 17, was issued by the Legislative Ethics Committee, a bipartisan, 12-member panel that answers inquiries from legislators and vets complaints about unethical activity by sitting lawmakers. Once a year, the committee posts the opinions it renders to the North Carolina Ethics Commission's website. Those opinions are scrubbed of information that would identify who requested the information. 

In this opinion, the committee answers a question from a lawmakers who asked if he or she could raise money for a 501(c)(4), 501(c)(5), 501(c)(6) or 527 organization, all of which are types of nonprofit groups allowed to engage in various political activities.

A 501(c)(4) group, for example, is a "social welfare organization," the like of which has frequently been employed to run campaign-style advertising. Carolina Rising, which backed House Speaker Thom Tillis in his successful U.S. Senate campaign, is an example of this sort of group.

Labor unions are often organized as 501(c)(5) groups, while chambers of commerce are often organized as 501(c)(6) organizations. A 527 group is a specific type of political committee created by the IRS in 1986. Unlike the various 501(c) groups, a 527 has to disclose more about its fundraising and spending.

Independent spending groups have played a huge role in recent North Carolina elections, including the just-concluded $110 million-plus race for U.S. Senate, in which nonprofits and super PACs spent more than the parties and the candidates, but few of those had direct connections to state legislators. 

The exception is N.C. House Legislative Partners, a nonprofit purportedly built to spread news about work spearheaded by Republican lawmakers, but which ended up airing what amounted to Tillis' first de facto U.S. Senate campaign ad in 2013. 

Roger Knight, a lawyer who works for NCHLP, said that he didn't request the opinion, and he does not believe any of the members of his group did. 

Like Weisel, Knight says this ethics opinion could clear the way for sitting lawmakers to raise money for political nonprofits "to a limited extent." As of right now, the State Board of Elections hasn't weighed in on the question of coordination between candidates and nonprofits. Federal law, he said, limits the amounts that candidates and office holders can solicit for such nonprofits.

But, as with other aspects of state and federal elections laws, there are nuances, questions and outright loopholes related to such limits.

Bob Hall, a good-government campaigner for Durham-based Democracy North Carolina, sees this ethics opinion as stemming from a spate of recent U.S. Supreme Court cases that have eroded campaign fundraising limits and opened the door for more political participation by businesses. 

"You have to imagine you live in a different universe, with the majority of U.S. Supreme Court justices," Hall said. "In this universe, working hard to raise big money for an entity that runs a million dollars worth of ads for your election has no potential to corrupt or unduly influence you. ... Sadly, this opinion is an example of how the Supreme Court’s make-believe universe is invading more of the real world, taking over more space and replacing common sense with Orwellian double-speak."


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  • notexactly Dec 31, 2014

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    No not really! There are millions of middle class republicans. I am one of those. I just think that there are to many people claiming being poor and cant do anything for themselves to change that. I was born dirt poor, as were my parents. I worked long hours and made smart choices and climbed out of the poor pool, as many millionaires have done. I am middle class and have never been on any gov. program. So to say it cant be done is insane and a lie. The younger generations don't want to do the work to get there. They gov. programs have made them that way. Now instead of asking what they can do for their country, they say what can my country do for me. That is sad. Soon there will not be enough doers to support the takers. Who is looking out for who here again? This is the land of opportunity, if you cant make it here, then you are doing something wrong and or making bad choices that are keeping you from doing so.

  • dwntwnboy2 Dec 30, 2014

    More "money rules the world" from the courts. I thought the lawmakers worked for us, the people. How wrong we were- they only work for those that pad their reelection coffers and all of the "perks" given in public and private. Wish I was rich so I could buy a politician- voting just isn't enough anymore.

  • miseem Dec 30, 2014

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    No one has said that there are not wealthy contributors to the Democratic Party. However, reading the link that you so kindly provided, the GOP receives very much more in dark money that does not reveal who is donating. For example, the Koch brothers show up nowhere on any of the lists linked to your article. But does anyone really believe that the Koch brothers are not contributing any money to the GOP? They are just very adept at hiding it. And in my opinion, there is no reason for allowing large donors to hide their buying of candidates.

  • Eric Hammond Dec 30, 2014
    user avatar

    WOW... talk about proof that the "Iron Law of Oligarchy" is 100% SPOT-ON! this country will continue it's down-hill slide to oblivion until the middle class wakes up and refuses to vote against their own best interests, but I'm willing to betthe middle class will allow themselves to be taxed into poverty by the GOP and their ultra-rich puppet masters

  • 1983rs Dec 30, 2014

    political nonprofit? isn't that an oxymoron

  • delilahk2000 Dec 30, 2014


  • John McCray Dec 30, 2014
    user avatar

    After reading the opinion, too bad they don't allow the public to know who's asking the question, but, I can understand that it may be a Fifth or Sixth Amendment issue. Second, how can one not use one's own position to solicit money for campaign purposes but in the next section exception is given for the purposes of political advertising?
    And lastly, good luck trying to uphold the gift ban! I can only imagine all the gifts that roll through those offices.

  • heelhawk Dec 30, 2014

    Wonderful, more dark money into elections. Less transparency, and more "bought" elections and owned politicians. I have yet to meet anyone (outside of a politician) who remotely supports this type of activity from either side of the aisle.

  • Kenny Dunn Dec 30, 2014
    user avatar

    Finally, all limits on corruption have been removed.