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Unreported money flows into North Carolina's Senate race

By Jacob Fenton
Sunlight Foundation

Outside groups bought virtually all the ads that one Charlotte TV station has aired in North Carolina’s hotly contested Senate race, and nearly half of the dollars they spent haven’t been reported to the Federal Election Commission.

That’s the conclusion of a Sunlight Foundation analysis of all the ad orders received through mid-June at Raycom Media’s WBTV Channel 3, located in the state’s most expensive media market.

The race between Democratic Sen. Kay Hagan and her Republican challenger, state House Speaker Thom Tillis, has attracted an enormous influx of money that is either impossible to trace to its source, or never reported to the nation’s campaign finance watchdog.

Two of the nation’s biggest sources of undisclosed campaign money have combined to spend more than $10.5 million in the North Carolina Senate contest: Americans for Prosperity for at least $7 million and Crossroads GPS for more than $3.5 million.

The unreported campaign spending is legal: Federal law allows political groups incorporated as nonprofits to keep their donors secret. And ads can mention candidates in the most favorable or unfavorable terms without ever being reported to the FEC as long as they don’t “expressly advocate” a vote for or against a candidate, and don’t run within the month prior to a primary election or two months prior to a general election.

Such ads amount to more than 65 percent of the Republican spending at WBTV.

Between the start of 2013 and June 17, WBTV had received orders for 4,086 political ads at a total cost of $3.8 million. About $3 million of that spending backs a candidate for Senate.

The first buys Sunlight examined went up Oct. 30, 2013 – more than a year before Election Day.

The ads “just started coming in much earlier than in previous years,” said WBTV’s national sales manager, Patti Goodnight. “It’s been a constant drumbeat, really, since the first of the year.”

She also noted that the outside groups “took a little time off for the primary,” a fact that highlights one of the peculiarities of outside spending: Because groups have to report even “issue ads” that mention or depict candidates if they air within 30 days of a primary or 60 days of a general election, many outside groups tend to stop advertising during that period.

In addition to the unreported spending, there were ads paid for by groups such as the U.S. Chamber of Commerce that report money spent to the FEC, but don’t report their donors. Only 27 percent of Tillis-allied ads were underwritten by named donors. Those were paid for by the American Crossroads super PAC, and ran during the month before the May 6 primary.

Among Hagan allies, the ratios were flipped: 77 percent of ad buy dollars were disclosed to the Federal Election Commission. And 69 percent of buys came from groups that disclose their donors.

The left-leaning groups that didn’t disclose their spending to the FEC: The League of Conservation Voters, whose $76,700 ad buy ran from Nov. 21 through Dec. 4, and the Southern Alliance for Clean Energy, whose $126,000 buy aired March 24 through April 13.

Ads from Republican-allied groups (excluding about $16,000 in ads from two Republican primary candidates who lost) amounted to $1.14 million; Democratic spending – which includes two ad buys from Kay Hagan for $52,250 – came to $890,025. Marketwide estimates, which weren’t available for all buys, pointed to a similar breakdown among all Charlotte broadcasters.

Outside groups can’t coordinate with the candidate – but they can talk to each other. Despite a lengthy list of ad placements by multiple groups, there was remarkably little overlap by those playing on the same side. Among the anti-Hagan forces, Americans for Prosperity, Crossroads GPS, American Crossroads and the U.S. Chamber of Commerce never had ads running at the same time. Similarly, on the Democratic side, ads bought by Senate Majority PAC, Patriot Majority PAC and League of Conservation Voters never overlapped.

Tillis’ allies spent more than a million dollars at WBTV, and more than 10 times that statewide. The candidate’s campaign committee, however, spent nothing at WBTV. Hagan’s campaign had just begun to air ads, with the first round going up June 10.

Thus far, only three groups have significant purchases in the final months – the most important part of the race – at WBTV. Crossroads GPS booked July 1-13 and July 22-31 for about $200,000 apiece throughout the Charlotte market.

The National Republican Senatorial Campaign and Democratic Senatorial Campaign Committee each have advance reservations for the final stretch of the race. The DSCC has already booked from Oct. 16 through Nov. 3, a seven-week stretch ending the day before Election Day, for about $2 million in the Charlotte market. The NRSC, however, so far has not committed to Tillis all the way through Election Day. So far the GOP Senate campaign committee has reserved only Sept. 2 through Oct. 13, a six-week stretch, for $1.2 million.

The Sunlight Foundation is a nonpartisan nonprofit that advocates for open government.
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