A group supporting former Oklahoma House Speaker T.W. Shannon for U.S. Senate is reorganizing after what it says was an administrative error that caused it to be incorporated as a for-profit corporation.
Charles Spies, a Washington attorney prominent in political finance law, said Oklahomans for a Conservative Future was intended to be a non-profit and has conducted itself as one since it was organized last month.
OCF has spent more than $300,000 in support of Shannon’s Senate candidacy. The World and several watchdog organizations published stories over the past two weeks pointing out that as a for-profit corporation, Oklahomans for a Conservative Future could avoid most disclosure requirements.
“An administrative error was made in the filing of incorporation papers with the state of Oklahoma,” said Charles Spies. “It should have been filed as a not-for-profit corporation.”
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Spies said Oklahomans for a Conservative Future had conducted itself as a non-profit and the organization’s status “is in the process of being corrected.”
The current trend in campaign finance is for third-party operations to organize as non-profit, 501(c)(4) “social welfare” programs. As such, they do not have to disclose donors, but are, in theory, subject to a requirement that their primary activity not be political advocacy.
Critics say this requirement is not being enforced, allowing large donors, in conjunction with the Supreme Court’s 2010 Citizens United ruling, to spend unlimited sums in support or opposition of specific candidates without disclosing the source of the money.
Some campaign finance experts believe these independent expenditures will flow to for-profit corporations if Congress and the IRS begin cracking down on 501(c)(4) organizations that are engaged primarily in political activity.
These experts say a for-profit corporation could arguably claim the 501(c)(4) exemption from disclosure while also avoiding the primary activity test.
Spies is considered perhaps the most astute campaign finance attorney in the country. A longtime ally of Mitt Romney, Spies was chief financial officer and legal adviser for Romney’s 2008 presidential campaign and in 2010 formed Restore Our Future, the political action committee behind Romney’s 2012 campaign.
Among the donors to Restore Our Future were several limited liability companies apparently formed strictly to direct money into the PAC.
Spies’ clients also include the Congressional Leadership Fund, a political action committee whose purpose is the election of Republicans to the U.S. House of Representatives.
