September 25, 2013

Special Interests Did Not Properly Disclose Two-Thirds of Presidential Inaugural Contributions

By CREW Staff

Obama Inaugural

Read more about this analysis in Politico: Report: Inaugural donors failing to document contributions

When President Obama was inaugurated for a second time last January, a significant chunk of the $43 million spent on festivities was underwritten by corporations and special interests, many of which have spent millions of dollars lobbying for government policies that would pad their pockets.  Organizations that lobby are legally required to disclose contributions to the inaugural committee, but a vast majority failed to do so.

A new analysis by CREW found 42 of the 62 contributions to the 2013 Presidential Inaugural Committee (PIC) from organizations registered to lobby were omitted from lobbying contribution disclosure filings.  The undisclosed contributions total $8 million, including $1 million donations each from lobbying heavyweights Chevron and Microsoft.  CREW examined the list of donors the PIC reported to the Federal Election Commission (FEC) to assemble a list of donations by corporations and other organizations.  CREW then searched the lobbying contribution databases maintained by the Secretary of the Senate and the Clerk of the House of Representatives to determine whether the organization had filed lobbying contribution disclosure forms, known as LD-203 forms, for the time period that included the donation.  If an organization filed an LD-203, CREW checked to see whether the form disclosed the PIC contributions.

In 2007, the Lobbying Disclosure Act was amended to require registered lobbying organizations to disclose certain contributions of $200 or more, including donations to federal candidates and political action committees, contributions to presidential inaugural committees, and a range of contributions in honor of public officials.  The goal was to make the full scope of influence campaigns more transparent to the public.  CREW’s analysis shows companies are failing to comply with even the disclosure requirements that are easiest to verify, raising serious questions about what else is missing from the filings.

Microsoft failed to disclose four contributions totaling $2.07 million, including $574,285 in in-kind contributions for equipment and tech services. Other major inauguration committee contributors who failed to disclose their donations on their lobbying forms include Genentech, Coca Cola, and Aflac, and several unions, including the International Association of Fire Fighters.  AT&T correctly disclosed its $3 million donation to the PIC, but the company only disclosed $171,313 of the $1.6 million in-kind contribution it provided for services and equipment.

The 2007 legislation creating the new reporting rules directed the Government Accountability Office (GAO) to annually audit how well lobbyists are complying with the disclosure requirements.  The GAO’s most recent audit, in April 2013, found 15 percent of lobbyists had not filed their federal political campaign reports as required.  In addition, GAO estimated that at least 6 percent of reports were missing one or more political contributions that had been reported to the FEC, and thus should have been included.  The GAO has not specifically examined donations to the PIC, possibly because in 2009, the PIC did not accept donations from corporations, political action committees (PAC), or federally registered lobbyists.  This year, the PIC changed its policy to accept unlimited contributions from corporations, though still not from PACs or registered lobbyists.

CREW has found other problems with the disclosure filings. In February 2013, for instance, CREW discovered a $25,000 donation Google made to Common Sense Media, a nonprofit, in honor of then-Federal Trade Commission Chairman Jon Leibowitz at a time when the agency was investigating the search giant for possible anti-trust violations.  Google disclosed the donation, but the company was the only corporate sponsor of the Common Sense Media event honoring Chairman Leibowitz to do so.  Other companies that should have disclosed donations to Common Sense Media for the event include AOL, Comcast, and Disney.

The lobbying contribution disclosure forms are the only way companies are required to disclose sponsorship of events or contributions made in honor of government officials to the public, and it’s clear the disclosures have big gaps.  The Secretary of the Senate and the House Clerk are responsible for reporting scofflaws to the U.S. Attorney’s Office for the District of Columbia, which can theoretically impose civil and criminal penalties for violations of the disclosure requirements.  In practice, there is little enforcement.  The fact is the public can’t rely on these disclosures to find out who’s really paying for the party. 

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