By urging Obama’s defeat, Koch group keeps donors hidden

Americans for Prosperity, the conservative group backed by the Koch brothers, unveiled a new tactic Tuesday in its ad campaign against President Obama: an explicit call for the president’s defeat.

The shift may not seem like much to swing-state viewers who have already seen millions of dollars’ worth of ads from the group slamming Obama’s policies. But the move into what is known as express advocacy illustrates the tightrope that groups like this one must walk to keep their donors anonymous, relying more on an overtly political tone even as their tax-exempt status bars them from too much political activity.

The $6.7-million ad buy announced Tuesday, which will run in 11 states including Colorado, Florida and Ohio, hits on a familiar theme for the conservative group: the growing national debt during Obama’s presidency.

At the end of the ad, an exhortation flashes on screen: “Let’s make this a one-term proposition on November 6th.”

By using that one line -- a direct call for Obama’s defeat -- Americans for Prosperity can keep its donors out of public view.

That’s because of a quirk in Federal Election Commission regulations, which require groups running so-called issues ads in the weeks before the election to reveal their donors, but does not require the same of groups that run explicitly political ads.

Nonprofit groups like Americans for Prosperity have had a significant presence on the airwaves this election cycle, but unlike “super PACs,” these outside groups do not have to disclose their donors. Last month, the Sunlight Foundation estimated that groups with undisclosed donors had spent at least $126 million on television ads so far.

Until Tuesday, Americans for Prosperity stuck to issue ads, which mention federal candidates but do not directly call for their election or defeat.

“We did not make this decision lightly,” said group President Tim Phillips in a conference call with reporters. “In our eight years as an organization, we have never taken an express advocacy position with regard to any candidate anywhere.”

Phillips said the group “felt compelled to act” by the “disastrous economic policies of this administration.”

The group had another reason to change its rhetoric: a new FEC policy, spurred by a federal court decision last spring that requires organizations to disclose donors that give more than $1,000 if the groups run issue ads within 30 days before a primary (or before the first day of a national nominating convention) and 60 days before the general election.

Ads that directly advocate for or against a politician, also known as independent expenditures, would not trigger that disclosure requirement.

Phillips said the decision to move into express advocacy was in the works “for a long time,” but acknowledged that the group did consider the federal court decision and subsequent FEC disclosure rules.

“It’s no great mystery why a group like AFP would be starting to run express advocacy ads right around now,” said Robert Kelner, an election law attorney in the Washington office of Covington and Burling. “I expect to see many outside groups that are set up as [nonprofit social welfare groups] start to run independent expenditure ads.”

The move toward a more explicitly political tone, however, could attract the scrutiny of the IRS, with which Americans for Prosperity and others are registered as nonprofit social welfare organizations. The IRS advises that a social welfare organization “may engage in some political activities, so long as that is not its primary activity.”

“At some nebulous point, and no one knows where that point is exactly,” Kelner said, “these groups could put tax-exempt status at risk because they engage in too much electoral activity.”

melanie.mason@latimes.com