Are These Non-Profits Involved in Criminal Activity?

Is the Non-Profit Veil Game a Crime?

With the recent complaint filed by MEDA, a few folks were casting a more critical eye at the newest campaign finance scheme wondering if there is a criminal violation.

 

In this cycle there have two instances of non-profits which appear to have been created for the purpose of concealing the identity of the donors to political campaigns.

 

The first case involves Better Government for Missouri.  The non-profit was established and then quickly became the vehicle to funnel hundreds of thousands of dollars to Missourians for Conservative Values PAC, which then ran television commercials (and radio ads, website etc) attacking incumbent Lieutenant Governor Peter Kinder.

 

The second case involves Missourians for Low Energy Costs.  Again, there was minimal time between the creation of the non-profit and then immediate funneling of money into a PAC.  In this case the political committee was Missourians Against Higher Utility Rates, which then spent the money in three state senate races.

 

Do these schemes go against the spirit of the law?  Clearly.  But the argument that this is criminal activity.  That argument comes from two statues.

 

The first is that these non-profits actually fall within the definition of committee by the Missouri statutes and therefore be bound by the reporting requirements of committees.

 

130-011: (9) “Committee”, a person or any combination of persons, who accepts contributions or makes expenditures for the primary or incidental purpose of influencing or attempting to influence the action of voters for or against the nomination or election to public office of one or more candidates or the qualification, passage or defeat of any ballot measure or for the purpose of paying a previously incurred campaign debt or obligation of a candidate or the debts or obligations of a committee or for the purpose of contributing funds to another committee. Read it here.

 

The statues say that the definition of committee does not include: A corporation, cooperative association, partnership, proprietorship, or joint venture organized or operated for a primary or principal purpose other than that of influencing or attempting to influence the action of voters for or against the nomination or election to public office of one or more candidates or the qualification, passage or defeat of any ballot measure, and it accepts no contributions, and all expenditures it makes are from its own funds or property obtained in the usual course of business or in any commercial or other transaction and which are not contributions as defined by subdivision (11) of this section;

 

The crux then would seem to be whether these non-profits were organized for a purpose other than their political endeavor.  And the evidence as far as I can see is that these “non-profits” only exist to gather dollars to use politically.

 

 

The second is much broader.  130.031.  3. No contribution shall be made or accepted and no expenditure shall be made or incurred, directly or indirectly, in a fictitious name, in the name of another person, or by or through another person in such a manner as to conceal the identity of the actual source of the contribution or the actual recipient and purpose of the expenditure.

 

 

Class A Misdemeanor

130.081. 1. Any person who purposely* violates the provisions of this chapter is guilty of a class A misdemeanor.

 

 

An aspiring politician once explained to me that the way you establish yourself in politics is to go up the biggest kid you can find, and punch them in the nose.

 

With the huge interests hiding behind these no-profits, and the obvious good government principle of transparency at stake, this is just waiting for a young hungry ambitious politician to go up to these fake non-profits and punch them in the nose.

 

Originally in August 3 MOScout.