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Aldermen advance bill demanding disclosure for politically active nonprofits

This article first appeared in the St. Louis Beacon, Nov. 28, 2012 - A push to require nonprofit groups involved in political activity to disclose donors is making headway in the city of St. Louis.

The Board of Aldermen’s Legislative Committee on Wednesday approved Alderwoman Lyda Krewson's bill requiring 501(c)(4) or 501(c)(6) organizations involved in citywide elections to disclose donors to the St. Louis Board of Election Commissioners. That would include elections for the city’s mayor, comptroller and aldermanic president, as well as city ballot items.

Any not-for-profit that doesn't follow the disclosure guidelines in the bill would be liable for a civil penalty equal to the amount of its aggregate expenditures and contributions plus $500.

Krewson’s bill passed without opposition, although some of the committee’s members were not present for the meeting.

The groups that Krewson’s bill targets – known as 501(c)(4) “social welfare” nonprofits – were widely used on a federal level during the past election cycle. The groups – pejoratively referred to as “dark money” organizations – do not have to disclose their donors publicly, so they can and have been used to funnel large amounts of money anonymously into campaigns.

These nonprofits were also used in a number of state-level contests, including the Democratic primary for the 5th senatorial district. That prompted both Democratic legislators to call for disclosure requirements.

In an interview before the hearing, Krewson said no particular incident in the city prompted her to introduce her bill. Krewson – an ally of Mayor Francis Slay – also said she wasn’t fearful that the groups would be used in any of next year’s city elections. Slay is seeking a fourth term and has opposition in the March 5 Democratic primary.

“There was no incident or anything like that. But all of this follows this discussion through the November election cycle. You know, you just think what can we do at a local level?” Krewson said. “And I thought, ‘Well, we can do this for the city of St. Louis and maybe it would be a prompting to do it at a state level or on a broader scale.’

“So it’s just one of these ‘good government’ things in that you’re doing what you can do,” she added. “Sometimes these things do spark other interests.”

While Krewson’s bill would apply to the top three citywide offices, it would not include seats on the Board of Aldermen. She said she wouldn’t be opposed to adding those offices, but added she wanted the mayor, comptroller and aldermanic president to be a starting point.

Brad Ketcher – an attorney who spoke at the hearing in favor of the bill – said St. Louis and Kansas City have both implemented campaign finance regulations different from the state. For instance, he said, Kansas City still has contribution limits for its local offices. And St. Louis candidates, he said, face restrictions on taking gaming contributions.

“In general, charter or constitutional like the city of St. Louis or Kansas City, they do have the power to do things in addition to state law,” said Ketcher, the former chief of staff to Democratic Gov. Mel Carnahan who’s been active in ballot initiatives. “There’s a precedent for a city moving out in front of the state on issues involving campaign finance.”

Alderwoman Marlene Davis, D-Ward 19, brought up one potential way around disclosure requirements: A big donor could give to a nonprofit group, which then directs that money to another nonprofit involved in the political process. That scenario occurred in California, a state that requires politically active nonprofits to disclose donors.

“Certainly it is a concern of people shuffling money from one not-for-profit to the next and to the next. And then finally dumping that money into the political system,” Ketcher said. “But, at the state level there are rules against earmarking resources through front organizations. When you have a very aggressive activity like that, I think those would probably come into play and offer some sort of deterrence on that kind of activity.”

Jason is the politics correspondent for St. Louis Public Radio.

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