Ad Donor

A U.S. Court of Appeals panel refuses to block a ruling requiring tax-exempt organizations that run election-related TV ads to reveal their supporters.

Advocacy groups spending millions of dollars to influence the 2012 election now face the prospect of having to reveal their secret donors, after a federal appellate court panel refused to block a lower-court order requiring the disclosure.

In a 2-to-1 decision issued Monday evening, a U.S. Court of Appeals panel here declined to stay a ruling by a federal judge requiring tax-exempt organizations that run election-related television ads to disclose their donors.

The panel’s decision was a significant victory for campaign finance reform advocates who have been fighting against the deluge of money — much of it from undisclosed donors — that has flooded the political landscape in the wake of several Supreme Court decisions, including the 2010 Citizens United case.

“It’s the first major breakthrough in overcoming the massive amounts of secret contributions that are flowing into federal elections,” said Fred Wertheimer, president of the reform group Democracy 21, one of the groups involved in the case brought by Rep. Chris Van Hollen (D-Md.) against the Federal Election Commission.

“The American people have a right to know who is bankrolling the ads that are designed to influence their votes,” Van Hollen said in a statement.

Conservative legal experts argue that requiring disclosure exposes political donors to potential retribution, stifling free speech.

“This is really about incumbent politicians trying to silence voices they don’t agree with,” election law lawyer Jason Torchinsky said in an interview last week.

It remains to be seen whether the decision will actually force any groups to disclose their donors — many are scrambling to find ways around it. But there is no question that it complicates the political plans of heavyweight players such as the U.S. Chamber of Commerceand an array of well-financed, conservative, nonprofit groups such as Crossroads GPS and Americans for Prosperity that have taken the lead in a costly air war against President Obama and congressional Democrats. Liberal tax-exempt groups, which spend far less on the type of ads in question, will also be affected.

Blair Latoff, a spokeswoman for the chamber, said the organization was disappointed the court was “changing the rules of the road in the middle of an election cycle.” The chamber is still reviewing the decision, but plans to continue its outreach to voters “in a way that protects the rights of our members to participate in the political process, free from retaliation and harassment,” she added.

Unlike “super PACs,” which are independent political committees that must disclose their donors, tax-exempt groups have been permitted to run election-related ads without revealing their backers.

But pending the appeal of the Van Hollen suit, set to be heard in September, groups that run a type of ad known as “electioneering communications” will now have to disclose all of the donations they received since the beginning of 2011, or set up a segregated account to pay for the commercials.

Electioneering communications are television spots that refer to federal candidates but stop short of advocating for their election or defeat and air within 30 days before a primary and 60 days before the general election.

In 2010, outside groups spent nearly $80 million on electioneering, according to data compiled by the nonpartisan Center for Responsive Politics.

Because the presidential primaries extend through June and the political conventions begin at the end of August, electioneering rules will be in place for much of the remaining campaign.

The Van Hollen decision still could be delayed or overturned. Two organizations seeking an appeal of the lower court’s ruling are expected to request a stay — perhaps from the Supreme Court — to halt the order. But election law experts say there is no guarantee they will be successful, noting that the high court has repeatedly endorsed the disclosure of contributors, including in the Citizens United case.

“The Supreme Court has been consistently upholding campaign disclosure laws, even as it has been striking down campaign limits,” said Rick Hasen, a professor of campaign finance law at UC Irvine’s School of Law.

Some organizations have indicated that they will craft their ads to avoid triggering the electioneering rule. One such group, American Future Fund, has already asked the FEC whether it can duck the rule if its anti-Obama ads do not explicitly name him in its commercials but refer instead to “the White House” or “the administration.”

“I think you’ll see electioneering communications virtually cease because no one is going to want to speak under the disclosure regime,” said Torchinsky, who represents American Future Fund and the Hispanic Leadership Fund, a group seeking an appeal of the original ruling.

Ironically, some groups may now begin airing more explicitly political ads — ones that call for the election or defeat of a candidate — because those “express advocacy” ads still require only limited donor disclosure.

But doing more direct political spending could threaten the tax status of nonprofit groups, whose political activity is limited by Internal Revenue Service rules.

Read More: LA Times

Drink giant Diageo says it will no longer fund the Heartland Institute, a free-market think tank that denies global warming, the Guardian reports, following a controversial ad campaign by the non-profit.

On May 3, a Heartland billboard appeared over the Eisenhower Expressway in Illinois showing a picture of Ted Kaczynski, the Unabomber, with the slogan: “I still believe in global warming. Do you?”

A day later it was withdrawn, although Heartland didn’t apologize for the billboard series, which also features Charles Manson, Fidel Castro and Osama bin Laden. On May 4, Heartland published a statement on its website saying, “The most prominent advocates of global warming aren’t scientists. They are murderers, tyrants, and madmen.”

Diageo, which owns brands such as Guinness, Smirnoff, Johnnie Walker and Moët & Chandon, told the Guardian: “Diageo vigorously opposes climate skepticism and our actions are proof of this. Diageo’s only association with the Heartland Institute was limited to a small contribution made two years ago specifically related to an excise tax issue. Diageo has no plans to work with the Heartland Institute in the future.”

Diageo gave $10,000 over the past two years, for a project related to excise duty.

Microsoft, which gave the institute $59,908 in 2011, also said it did not endorse Heartland’s climate change views. But the software company did not say it would stop funding the institute in the future.

In a May 4 blog, Steve Lippman, director of corporate citizenship at Microsoft, wrote: “The Heartland Institute does not speak for Microsoft on climate change. In fact, the Heartland Institute’s position on climate change is diametrically opposed to Microsoft’s position. And we completely disagree with the group’s inflammatory and distasteful advertising campaign.” Microsoft said its contributions were earmarked for a program providing free software licenses to non-profit organizations.

Earlier this year, after DeSmogBlog and the Guardian reported Heartland has received funds from a number of major companies that publicly support action to stop climate change, many of the firms acknowledged their donations and said they did not support Heartland’s stance on global warming. In March, General Motors said it would no longer fund Heartland, according to the Los Angeles Times.

But dozens of companies still donate to Heartland, according to DeSmogBlog, including Kraft, Anheuser-Busch and Pfizer.

Source: EnviromentalLeader.com

You can see it in the numbers and read it in the quotes: Facebook’s advertising business is a mess.

The numbers: Facebook’s advertising revenues shrank from Q4 to Q1, but that’s normal; industry-wide, advertisers spend a lot leading up to the holidays and don’t spend much after them.

What’s actually a warning signal is that while Facebook’s business is still growing year-over-year, overall, it’s growing at a slower rate every quarter. It’s decelerating. That’s not what you want from a company that is about to IPO at a $100 billion valuation.

The quotes: Part of the problem with Facebook’s advertising business is that its customers – advertisers – don’t know what they are getting for their money.   In separate articles posted today, the WSJ and CNET have all kinds of quotes from these people about their dissatisfaction:

• WSJ: “The question with Facebook and many of the social media sites is, ‘What are we getting for our dollars?’” said Michael Sprague, vice president of marketing at Kia Motors Corp.’s North American division.
• CNET: David Smith, the CEO of digital agency Mediasmith: “Facebook just doesn’t seem to care. They’re still trying to grow this thing. The question is, do they want the big bucks?”
• CNET: Mike Parker, the co-president of U.S. operations of Tribal DDB, talking about his frustration with Facebook: “For the longest time, we’ve been trying to call Facebook to do business with them and there’s nobody to pick up the call,” said Parker. “…They’re very focused on the consumer experience, and less focused on revenue and working with advertisers.”
• WSJ: ”There’s a pretty high degree of animosity right now with Facebook because they have become so powerful,” said Rob Griffin, global director of product development at Havas Digital, a unit of Havas

The ultimate problem: Facebook doesn’t really have a great ad product to offer marketers.

Contrary to expectations, the much-criticized court decisions that gave us “super PACs” have not led to a tsunami of contributions flowing from the treasuries of Fortune 500 corporations – at least not yet anyway.

What the Citizens United decision and a lower court ruling have done is make household names out of a bunch of relatively unknown, very wealthy conservatives. Of the top 10 donors to super PACs so far in the 2012 election cycle, seven are individuals – not corporations – and four of those individuals are billionaires.

The top 10 contributors gave more than a third, or $68 million of the nearly $202 million reported by the outside spending groups this election, according to a Center for Public Integrity analysis of Federal Election Commission records.

Rounding out the top 10 are two labor unions and a physicians’ medical malpractice insurance group.
The top donor list is mostly Republican, which is not surprising given the competitive GOP presidential primary season. Even so, Democrats have had less success in raising money for super PACs so far.

In 2010, the U.S. Supreme Court and a lower court set the stage for the new super PACs.

Such organizations can accept unlimited contributions from corporations, unions and individuals to spend on advertising supporting or opposing a candidate, but are not permitted to coordinate their spending with campaigns, though many employ former campaign operatives.
Top donors

No. 1 on the donor list by far is billionaire casino owner Sheldon Adelson and family, who gave $26.5 million. Nearly all of it was spent in a fruitless effort to elevate former House Speaker Newt Gingrich to the GOP presidential nomination through donations to the pro-Gingrich super PAC “Winning Our Future.” Another $5 million went to a group aimed at electing Republicans to the House.

Adelson, 78, ranks 8th on the Forbes 400 list of the nation’s richest people with a net worth estimated at $21.5 billion. He is an outspoken supporter of Israel and backed Gingrich’s comment that Palestinians are “an invented people.”

No. 2 Harold Simmons, an 80-year-old Texan, ranks 33rd on the Forbes list with a net worth estimated at $9.3 billion. He gave $16.7 million, which includes $3 million from Contran Corp., in which he has a 95 percent interest.
Simmons, and his wife, Annette, have given to six different super PACs this cycle, but the conservative group American Crossroads, co-founded by Karl Rove, former adviser to President George W. Bush, is by far his favorite. Simmons has given the super PAC $12 million in the 2012 election cycle.

Contran is in a wide range of businesses, including chemical manufacturing, metals and waste management. Simmons has been very public in his dislike of President Barack Obama calling him a “socialist” in an interview with the Wall Street Journal and “the most dangerous American alive because he would eliminate free enterprise in this country.”

Third on the list is another Texan, homebuilder Bob Perry. Perry, one of the GOP’s most active and prolific donors over the past decade, is a relative piker compared to Adelson and Simmons. He’s not on the Forbes list. Of his $6.7 million in donations, $3.5 million has gone to the pro-Mitt Romney super PAC Restore Our Future and $2.5 million has gone to American Crossroads.

The other individual donors in the top 10 are:

Peter Thiel (fifth), a libertarian, gave $2.7 million to super PACs supporting GOP presidential candidate Rep. Ron Paul, R-Texas. Thiel co-founded PayPal. Forbes ranks him No. 293, with a $1.5 billion net worth.

A. Jerrold Perenchio (sixth), gave $2.6 million, with $2 million going to American Crossroads. He is a longtime GOP donor and former owner of Spanish language network Univision. Forbes ranks him at 171 with a $2.3 billion net worth.

William J. Doré, a Louisiana energy executive, and Foster Friess, an investor, tied for ninth at $2.25 million. The two men were responsible for most of the contributions to the pro-Rick Santorum super PAC, the Red, White and Blue Fund.

The National Education Association, the nation’s largest union, was fourth at $3.6 million. It gave $3 million to its super PAC, the NEA Advocacy Fund, which has yet to spend any money on advertising this year. Ranked eighth is the AFL-CIO, with $2.3 million in donations, virtually all of it going to its Workers’ Voices super PAC.

Rounding out the top 10 is an unlikely super donor, the Cooperative of American Physicians. The co-op gave all its money – nearly $2.6 million – to a super PAC of the same name. The group consists of California doctors who buy medical malpractice insurance through the organization. The doctors want lower malpractice insurance rates and smaller awards in medical malpractice judgments.
Courts change the game

This marks the first presidential election following the landmark Citizens United v. Federal Election Commission case, decided in January 2010. The conservative majority of U.S. Supreme Court justices ruled that spending on independent messages that support or oppose federal candidates by corporations and labor unions does not lead to corruption.

A few months later, a federal court cited this rationale in SpeechNow.org v. Federal Election Commission. That decision led directly to the creation of super PACs. It said that outside spending groups – like American Crossroads, for example – could accept unlimited contributions from corporations, unions and individuals to be spent on political ads.

Previously, if a group wanted to expressly advocate for or against a federal candidate, it could only collect $5,000 per person per year.

If an independent group were to raise $5 million for high-profile TV ad campaign advocating against the president or members of Congress, it would need at least 1,000 donors in a year to give the legal maximum. Now, one wealthy individual can single-handedly give a super PAC the cash it needs – and change the political dynamics of a race overnight.

Washington, D.C.-based attorney Dan Backer, a proponent of super PACs, suspects that much of the money flowing to these nascent groups will come from “the same folks who’ve always contributed,” though he also argues that super PACs will allow more people to get involved and have their voices heard.

Backer said the money “translates into information that empowers voters.”

No limits

Bob Edgar, a one-time Democratic congressman from Pennsylvania who now heads the advocacy group Common Cause, is among those who have railed against the prospect of deep-pocketed corporations and individuals spending big sums ahead of the 2012 election.

“There’s no limit on the amount of money that can enter a political campaign,” he said.

Edgar admits he is surprised that fewer corporations haven’t flexed their political muscle by giving to super PACs, but he predicts that a few “brand-sensitive” corporations will wade into the super PAC water.

“Corporations are discovering that they have to be careful,” he said. “They can tarnish their brands if they are seen as meddling in partisan politics.”

However, there is a way for donors to go unnoticed. Nonprofits organized under section 501(c)(4) of the U.S. tax code can accept unlimited contributions and spend the money on ads, just like super PACs, but they aren’t required to reveal their donors.

In fact, 62 percent of the $123 million raised by American Crossroads, the super PAC, and Crossroads GPS, the nonprofit, through the end of 2011 came from mystery donors, according to a Center for Public Integrity analysis of tax and campaign finance records.

So there may indeed be a flood of money from big corporations headed into the 2012 election – we just won’t see it.

The American Red Cross has issued a call for donations of online ad inventory to support fundraising for its Hurricane Katrina relief efforts.

The humanitarian aid group has created a URL where the operators of blogs and other Web properties can obtain banners they can then place on their sites.

The ads come in seven sizes and more than twenty creative executions.

As of late morning, however, heavy traffic appeared to have brought down the site.

The Red Cross launched similar online fundraising efforts in the wake of 9/11 and last year’s tsunami in Southeast Asia.

Ad Donor is working directly with The American Red Cross and thousands of other non-profit charities, causes and events.

The primary goal is to aid in their efforts by utilizing online ad space donations for increased awareness of involvement in a variety of causes as well as direct fund raising campaigns and events.

The American Red Cross has been fined for poor and unsafe blood management practices, failing to correct violations of blood-safety rules, MSNBC reported.

The Food and Drug Administration has slapped a $9.59 million fine on the the American Red Cross after inspections at 16 blood centers between April and October 2010 showed ongoing problems that could endanger donors and potentially allow contaminated blood to get into the country’s supply, MSNBC reported.

The American Red Cross has been cited 14 times since 2003 and fined close to $46 million for similar reasons, Bloomberg reported. The organization also didn’t ensure that its entire staff has been adequately trained in blood safety. It also hasn’t created a complete list of prospective donors who were disqualified from giving blood, according to a letter the FDA made public on January 13.

“FDA cannot definitively say there was never any danger to the blood supply since the violations can create conditions that could lead to potential safety consequences,” said Patricia El-Hinnawy, FDA spokeswoman, MSNBC reported.

The American Red Cross supplies 40 percent of the nation’s blood. The letter also doesn’t rule out at the potentially infected blood has already been transfused, USA Today reported.

But the FDA has yet to find any evidence that points to any serious health consequences for blood recipients, Bloomberg reported.

“The safety of the nation’s blood supply is one of our top priorities, and we have no reason to believe that it has been compromised,” said Mary Malarkey, head of compliance at the agency’s Center for Biologics Evaluation and Research, Bloomberg reported. “It’s very important to note that people who need transfusions should continue to take their doctors’ advice, and we encourage people to donate blood.”

A Red Cross spokeswoman has also said in a statement that the problems the FDA points out in its 32-page letter are centered on an inspection at a Philadelphia blood center conducted 15 months ago, MSNBC reported.

“We are disappointed that the FDA believed it necessary to impose a fine for an inspection conducted so long ago,” wrote Stephanie Millian, director of biomedical communications, MSNBC reported. “We are not aware of any adverse donor reactions or patient issues due to the problems in the FDA report.”

However, a fine in June 2010 was for similar failures within the organization.

To Donate To Help Honey and Animals Like Her: The Humane Society

To Donate To Help Honey and Animals Like Her: The Humane Society

Donations to the nation’s biggest charities dropped 11 percent last year, a decline that was the worst in the two decades since The Chronicle started its Philanthropy 400 ranking of the organizations that raise the most from private sources.

Nonprofit organizations say they don’t expect to have done much better by the time 2010 ends. More than one in four of the groups provided projections for 2010, and the median change they predicted was an increase of just 1.4 percent.

The 400 institutions in the survey raised $68.6-billion in 2009. The drop they suffered in contributions was nearly four times as great as the next biggest annual decrease: 2.8 percent in 2001, when charities also struggled to raise money from recession-battered donors.

The median amount raised by charities on the Philanthropy 400 also declined last year to $98.8-million, down from $105-million in 2008, meaning half raised more and half raised less. The Philanthropy 400 is based on the most-recent year of data available for charities; most organizations reported data for the 2009 fiscal year but some groups reported data for other periods of time.

The Top 10

Among the 10 charities that raised the most last year, six reported declines. Giving to United Way Worldwide (No. 1) decreased by 4.5 percent and to the Salvation Army (No. 2) by 8.4 percent, the smallest declines among the top-ranking groups.

Food for the Poor (No. 5) saw contributions fall by more than 27 percent, while donations to the Fidelity Charitable Gift Fund (No. 6) plunged by 40.3 percent, largely because it relies heavily on stock gifts, which were not very popular last year. Also reporting declines were the American Cancer Society (No. 7), where giving fell by 11 percent, and the Y (No. 10), which reported a 17.2-percent drop in donations.

Only four charities in the top 10 reported increased contributions last year. They were Catholic Charities USA (No. 9) with a 5.2-percent jump in donations; the AmeriCares Foundation (No. 3), which achieved an 18.1-percent rise in giving, mostly in food, medicine, and other donated goods; Feed the Children (No. 4), another charity that relies on donated products, where contributions rose by 1.2 percent; and World Vision (No. 8), which reported a 4.5-percent increase in giving mostly by donors who make monthly gifts to “sponsor” needy children overseas.

$1-Billion Gainers

While AmeriCares fared well last year, its fund-raising growth for the past two decades helped it achieve the top ranking among organizations that grew the fastest in the 20 years since The Chronicle started ranking the top fund-raising charities. It increased giving by $1.1-billion. Two other charities also grew by more than $1-billion: Feed the Children and Habitat for Humanity, which now ranks No. 11.

The Chronicle’s list shows how hard it is for new organizations to raise enough to make the Philanthropy 400 list. Of the charities on the 2010 list, 226 of the same groups appeared in 1991 and 178 organizations appeared on the list for all 20 years.

Two nonprofit leaders who played a key role in helping their organizations get on the list will discuss fund-raising trends and how their organizations overcome fund-raising challenges in afree online discussion on Tuesday, October 19, at noon U.S. Eastern time.

The Philanthropy 400 shows the organizations that raise the most from individuals, foundations, and businesses. No government funds are counted. As a result, some organizations that are large but get most of their money from government agencies are not included. Full coverage of this year’s Philanthropy 400 rankings, plus a look at the 20-year history of the list, are available athttp://philanthropy.com/400.

The Food and Drug Administration has declared the blockbuster drug Avastin should no longer be used in breast cancer patients because there’s no proof it extends their lives, and it is causing dangerous side effects.

Friday’s ruling was long expected, but is sure to disappoint women who say they’ve run out of other options.

FDA Commissioner Dr. Margaret Hamburg called the decision difficult but said patients must have confidence that drugs sold for their condition are effective.

Avastin won’t stop selling, as it’s also used to treat colon cancer and certain other tumors, but the FDA ruling is expected to influence insurance coverage. Medicare says it will continue to cover Avastin while it evaluates whether a change is needed.