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Report: Some Super PAC Money Is Untraceable

Six of the top 10 super PACs active in the 2012 elections have received money from untraceable sources, including nonprofits and shell corporations, according to a report released today by two progressive advocacy groups.

“Super PACs provide an avenue for secret money to influence elections,” states the report, titled “Auctioning Democracy,” released by Demos and the U.S. PIRG Education Fund. Since 2010, 6.4 percent of the itemized contributions underwriting super PACs could not be traced to their original source, the report found.

The sources of untraceable money going to super PACs included 501(c)(4) social welfare groups, which face no disclosure requirements, and shell corporations, which appear to “exist not to conduct regular business but rather simply to necessitate an extra layer of research to discover the true source of contributed funds,” according to the report. A third source of untraceable donations was money transfers from one super PAC to another, the report stated, in cases where the super PAC making the contribution had itself received funding from one or more nonprofits.

The report also spotlighted the large role of wealthy donors and corporations in underwriting super PACs, which were ushered in by the Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling to lift restrictions on direct corporate and union campaign spending.

More than half the money flowing to super PACs in 2010 and 2011 came from individual big donors, according to the report, who accounted for 56 percent of all super PAC receipts.

Individual donations of $100,000 or more made up more than three-quarters, or 79 percent, of all super PAC contributions with more than half (52 percent) coming in donations of $500,000 or more. More than a third (38 percent) of super PAC money came from donors giving $1 million or more, the report found. Direct donations from for-profit businesses made up 17 percent of the total.

The report comes on the heels of this week’s announcement by President Barack Obama’s re-election campaign that administration officials will help direct money to the top super PAC backing the president, Priorities USA Action.

In a conference call with reporters on Tuesday, Obama campaign officials stressed that they would support only Priorities USA Action, not its nonprofit affiliate, and that all money would be disclosed to the FEC.

But Priorities USA Action has drawn fire from watchdog groups because of a $215,234 cash transfer that it received from its nonprofit affiliate, Priorities USA. PAC organizers have said the money was for administrative expenses only.

The report released today includes Priorities USA Action in its list of super PACs that have received untraceable money. The others were the pro-GOP PACs Restore Our Future Inc. and American Crossroads and FreedomWorks for America as well as the Democrat-friendly PACs American Bridge 21st Century and House Majority PAC.

Correction: Feb. 10, 2012

An earlier version of this story incorrectly included the following super PACs as on the list of those receiving untraceable money: Make Us Great Again Inc., AFL-CIO Workers' Voices PAC, Our Destiny PAC and Majority PAC. The report listed those super PACs among the top 10 super PACs, but it did not say they have received untraceable funds.

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