Short-lived firm’s $1M donation to GOP fund raises concern over transparency

August 4, 2011

A murky $1 million donation to a pro-Republican committee has reignited a debate over transparency in politics, underscoring the expanded role that wealthy donors are likely to play in the 2012 elections.

The focus of the debate is a now-extinct corporation called W Spann LLC, which gave $1 million in April to Restore Our Future, a “super PAC” created to help Mitt Romney’s presidential run, according to Federal Election Commission records.

The firm was formed in March and then dissolved in July, with no record of any shareholders, executives or business activities in between, according to MSNBC, which first reported on the company’s hazy background. The entire arrangement was handled by a Boston lawyer who specializes in managing wealthy estates.

The episode marks a new twist in efforts by wealthy donors and corporations to cloak their political expenditures, which have accelerated in the wake of court rulings allowing corporations to spend unlimited amounts of money on elections. Most nonprofit groups do not have to disclose their donors at all, while political committees such as Restore Our Future can accept donations from corporations or groups that reveal little about their activities.

Some campaign-finance experts and Democrats also said Thursday that this particular donation could run afoul of federal rules banning the use of a third party to hide the source of a contribution. Fred Wertheimer, president of Democracy 21, said the contribution “may well be a violation of the campaign finance laws.”

Wertheimer and others said the case should be investigated by the Federal Election Commission and the Justice Department for possible wrongdoing.

The Public Campaign Action Fund, which backs public financing of elections, sent a letter Thursday to Delaware Attorney General Beau Biden — the vice president’s son — requesting an investigation because the firm was incorporated in that state.

Restore Our Future, which was founded by three former Romney aides, declined to provide details about the donation beyond what it reported on disclosure forms. The super PAC, which can raise and spend unlimited funds on elections, reported $12 million in contributions in the first half of the year.

“Restore Our Future has fully complied with all FEC regulations, including publicly disclosing donors on our July 31 report,” said spokeswoman Brittany Gross.

The case represents the latest flashpoint in a long-running battle over disclosure of political contributions. Independent nonprofit groups on both sides of the aisle, including Crossroads GPS on the right and Priorities USA Action on the left, are collecting millions of dollars from donors who do not have to be publicly identified.

Republicans blocked Democratic efforts in 2010 to require corporations, unions and other interest groups to provide more details about their political spending. Some advocacy groups are also challenging the Internal Revenue Service to boost scrutiny of political groups formed as nonprofits.

In the case of W Spann, Delaware corporate records show the firm was formed on March 15 and dissolved on July 12. Both filings were signed by attorney Cameron Casey of Ropes & Gray, who provides “comprehensive estate planning advice to high-net-worth individuals” and “advises nonprofit organizations and their donors with respect to charitable planning matters,” according to the Boston-based firm’s Web site.

W Spann’s address was listed as 590 Madison Ave. in New York City, which has no record of a firm by that name, according to MSNBC. The office building’s many residents include Bain Capital — the investment firm founded by Romney — as well as major companies such as UBS, IBM and Cemex.

A Bain spokesman told the network that W Spann “is not affiliated with Bain Capital or any of our employees.”

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Staff writer T. W. Farnam contributed to this report.

Deputy editor, National politics
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