Michigan Campaign Finance Network

News from MCFN: 10/19/2010

Michigan Chamber gives $5.4M to RGA

What *is* the primary purpose of the Michigan Chamber of Commerce?

LANSING -- So far in 2010 the Michigan Chamber of Commerce has contributed $5,372,500 to the Republican Governors Association. That amount includes $2,825,000 sent to the RGA in the third quarter of 2010, according to a report filed with the Internal Revenue Service on October 15th. That is on top of $2,547,500 the Chamber gave the RGA in the second quarter of this year.

The Internal Revenue Service classifies the Republican Governors Association as a 527 organization whose primary purpose is to support or oppose candidates for public office. Contributions to the RGA must be disclosed through the IRS. The Michigan Chamber of Commerce is a 501 (c)(6) nonprofit corporation that does no public disclosure of its donors. Its members’ dues payments are tax deductible as business expenses.

According to records obtained by the Michigan Campaign Finance Network from the public files of Michigan broadcasters and cable systems, the Republican Governors Association spent $2.1 million for television advertisements touting Republican gubernatorial candidate Rick Snyder and discrediting Democratic candidate Virg Bernero during the period from September 9th through October 3rd. Mr. Snyder did no television advertising of his own during that period, although several of the RGA’s TV ads featured appearances by Mr. Snyder. The RGA has continued its advertising that seeks to define Mr. Bernero as an unsuitable candidate for governor since October 3rd..

The advertising agency for the Republican Governors Association is Target Enterprises of Encino, California. The RGA’s third quarter report to the IRS shows $15.5 million worth of media buys through Target Enterprises. Target has asked several Michigan broadcasters to withhold records of its Michigan gubernatorial ad buys from their public files, and some broadcasters have complied with Target’s request for non-disclosure.

Target was the advertising agency for Rick Snyder’s campaign committee through the primary election.

“The Michigan Chamber of Commerce has been aggregating contributions from anonymous donors for candidate-focused electioneering advertisements since the 2000 state election,” said Rich Robinson of the Michigan Campaign Finance Network. “They’ve spent millions of dollars for television advertisements that sought to define political candidates’ suitability for office, and they reported nothing about the sources whose contributions paid for those ads.”

“What is new in 2010 is that the Chamber’s primary financial purpose now appears to be aggregating contributions to give to the Republican Governors Association, an organization whose purpose is to promote the election of candidates for public office. The Chamber’s function as a business association is secondary, financially, to its role as a political fund aggregator.”

While giving $5,372,500 to the Republican Governors Association this year, the Michigan Chamber’s tax returns show that it has spent an average of only $4.45 million per year for business operations other than “issue advocacy” over the last six years. If election spending becomes its primary purpose, the IRS will change the Chamber’s classification to a 527 committee and it will be required to report all its contributors.

The other notable contributions from a Michigan-based corporation to the Republican Governors Association in the third quarter came from Meijer, Inc., the Walker-based retailer. Meijer gave the RGA $200,000.

“One has to credit Meijer with a certain kind of integrity for directly reporting its contributions to the RGA,” said Robinson. “The corporation is demonstrating a degree of political courage that the donors who are hiding behind the Chamber’s billowing skirts just don’t have. And it seems to have reformed its own past practices.”

Meijer’s last known corporate foray into electoral politics involved the clandestine funding of a recall campaign against Acme Township officials who opposed the site plan for a proposed Meijer store; a rewriting of the campaign finance history of that campaign, negotiated with the Department of State; a state record campaign finance fine of nearly $200,000; and a spate of civil lawsuits and millions of dollars in damage settlements.

“While Meijer’s new proclivity for political transparency is laudable, it remains to be seen whether it will be good for its retailing operation,” Robinson noted. “Maybe they’ll have a quirky new TV ad saying, ‘Shop Meijer and support Republican politics when you buy your pork chops.’”

The Michigan Campaign Finance Network has documented more than $8 million worth of candidate-focused gubernatorial television advertisements so far this year that have been sponsored by various political party committees and tax-exempt corporations who are unlikely to disclose any of the financing behind their advertisements. It is the position of MCFN that the funding sources that are supporting all such candidate-focused electioneering should be disclosed to the public before citizens cast their ballots.

Note to journalists: The Michigan Chamber of Commerce's contributions to the Republican Governors Association are recorded on p. 47 of the RGA's 2Q report and pp. 91-92 of the 3Q report. Meijer's contributions to the RGA are on p. 89 of the 3Q report.

The Michigan Campaign Finance Network (MCFN) is a nonprofit, nonpartisan organization that conducts research and public education on money in Michigan politics.

Contact

Rich Robinson

(517) 482-7198 or (517) 896-2246