In an unprecedented disclosure for Philadelphia, the American Beverage Association has reported spending $604,000 on ads attacking Mayor Jim Kenney and the city’s sweetened beverage tax as the Philadelphia primary election nears.
The association is a tax-exempt nonprofit organization, an entity not typically required to disclose its donors.
But in an effort to crack down on “dark money” groups, in 2015 Philadelphia City Council imposed a requirement that any group spending more than $5,000 to influence city elections must file reports disclosing its contributions and spending.
In a separate filing, Philly 2019, a super PAC funded by local building trades unions, reported it has spent a total of $448,000 on ads supporting Kenney.
As political committees, super PACs routinely report their donors and spending, though City Council has imposed more frequent reporting requirements on them than those in the state election code for political candidates.
The reports show that the two outside groups not bound by the city’s contribution limits are spending more in the municipal primary than the three mayoral candidates, who can accept only donations under the limits imposed by city law.
Illuminating dark money
National campaign finance experts say Philadelphia is unusual in being able to extract detailed campaign spending reports from nonprofit groups.
“Really, the [campaign finance] reform movements are looking to state and local governments,” Stepleton said, since there’s little likelihood that Congress will act to impose new disclosure requirements.
Stepleton said efforts to require more reporting from politically active nonprofits have emerged in California, Montana, and Tempe, Arizona, but “they’re few and far between on a national scale.”
In 2012, Delaware enacted a law requiring disclosure of donors supporting any advertising that names a candidate within 60 days of an election. It was upheld after a federal court challenge by the conservative group Delaware Strong Families.
Another bill imposing more reporting requirements is under consideration the New Jersey Legislature.
Dave Levinthal of the Center for Public Integrity in Washington agreed that nonprofits operate without a lot of disclosure in most of the country.
“At the local level, the state level, and the federal level, dark money remains pretty dark,” Levinthal said.
The American Beverage Association ads sharply criticize Kenney and the soda tax, but they don’t tell voters whom they should support in the mayor’s race. Instead, they end by urging voters to tell City Council to repeal the tax.
The ads fit the description of an “electioneering communication” under the city regulations, so the association is required to file reports disclosing its donors.
The donors named in the ABA’s report aren’t surprising. They’re all beverage companies, including Keurig, Dr. Pepper, Pepsi North American Beverages, Red Bull North America Inc., and the Coca-Cola Company.
But Shane Creamer, executive director of the city’s Board of Ethics, said the fact that a nonprofit complied with the city’s requirement is important.
“Philadelphia is in the vanguard of cities and states that are pushing for more information about who is funding political ads, regardless of how they’re organized or how many layers of conduits are used,” Creamer said. “Voters have a right to know who’s spending money to influence their choices in city elections.”
Super PACs, such as Philly 2019, are political committees that can accept unlimited donations and spend unlimited sums, but they are required to regularly disclose their donors and spending.
Both super PACs and politically active non-profits are prohibited from coordinating activities with candidates they support.
The beverage association and Philly 2019, the union-funded super PAC, have spent more than $1 million so far on the campaign.
Kenney’s campaign has spent about $497,000 in 2019 on the race. His challengers, former City Controller Alan Butkovitz and state Sen. Anthony Williams, have spent $79,000 and $24,000 respectively, according their most recent filings two weeks ago.