WASHINGTON (AP) — Two companies that gave $200,000 to a pro-Jeb Bush super PAC are obscuring the identities of the real donors, a Washington watchdog group alleges in a complaint it filed Thursday with the Federal Election Commission.
The complaint highlights how super political action committees — critical helpers for most of the 2016 presidential candidates — are not always as transparent as voters may think. Super PACs regularly file information about their donors to the FEC. But sometimes those donors are mysterious companies.
Citizens for Responsibility and Ethics in Washington, a political spending watchdog known as CREW, alleges that two limited-liability companies, or LLCs, are "straw donors" meant to conceal the true sources of the money.
Such situations would be illegal, but in the post-2010 super PAC era, neither FEC regulators nor federal prosecutors have pursued action in any of the numerous instances flagged by campaign finance watchdogs. In fact, complaints about questionable LLCs active in the 2012 presidential race are still pending at the commission.
CREW said the lack of enforcement doesn't mean it should stop sounding alarms.
"Laundering donations through companies to try to keep donor information secret defeats the purpose of disclosure rules and prevents the public from learning who is trying to influence our elections and our government," the group's executive director, Noah Bookbinder, said in a statement.
The new complaint concerns donations made to Right to Rise, a super PAC backing Bush, the former Florida governor who is seeking the Republican nomination. The group raised a record $103 million in the first six months of the year and had dozens of donors — most of them individuals — that made contributions of $100,000 or more each.
But among the donors were a limited-liability company called TH Holdings in New York City, which gave money Feb. 26, and Heather Oaks LLC in Birmingham, Alabama, which gave on March 9.
Fundraising records show neither LLC had ever made another political contribution. State records show that TH Holdings formed in New York in 2010 and Heather Oaks in Delaware this year, just a few days before its donation.
TH Holdings shares an address with Neuberger Berman, a private investment firm where Marvin Schwartz is a managing director.
Schwartz did not return an email message from The Associated Press. Alexander Samuelson, a spokesman for Neuberger Berman, said the company has nothing to do with TH Holdings and does not make any political contributions.
CREW found documents linking the LLC to Schwartz and also named him in its complaint. Schwartz gave Bush's official campaign the maximum legal donation of $2,700 in June. Super PACs, unlike the candidates they're helping, face no contribution limits.
CREW uncovered even less about Heather Oaks; Delaware provides scant public information on companies formed there. The address listed on its contribution information is that of a Birmingham shopping mall operated by the company Bayer Properties. Bethanne Jenkins, a spokeswoman for Bayer, said the Birmingham mall has more than 100 tenants and Heather Oaks LLC is not one of them. She said Bayer has no idea who is behind the donation.
Neither LLC, the watchdog alleges, appears to generate any income, raising questions about how they would be able to afford the contributions.
Super PACs for almost all of the presidential candidates have taken money from unions and corporations — something the 2010 Supreme Court decision known as Citizens United made clear is legal. But campaign finance watchdogs believe a smaller set of these companies is abusing rules or breaking laws by in effect hiding the real source of the donations they're making.
"If money from a human is routed through an LLC to hide the identity of the human, that's illegal," said Paul S. Ryan, senior counsel at the Campaign Legal Center, another watchdog that has filed multiple unanswered "straw donor" complaints.
Ryan said some clues as to what's happening are whether the entities have sources of income and when they were incorporated.
In one suspicious example that played out just before the 2012 election, two little-known companies tied to a Tennessee lawyer named William S. Rose Jr. began making $12 million in contributions to a prominent conservative super PAC, FreedomWorks.
Although Rose called those companies — and the source of their money — "a family secret," The Washington Post later revealed the donor as Richard Stephenson, founder of Cancer Treatment Centers of America and a FreedomWorks board member.
The FEC has taken no action in that case.
Paul Lindsay, a spokesman for Right to Rise, said his group complies with laws and FEC regulations. "The Supreme Court has made clear that corporations can donate to political organizations," he said.
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