Two ultraliberal, out-of-state national groups are apparently flouting state law and violating Federal Communications Commission (FCC) rules (§ 73.1212) in a campaign attacking legislators who favor bringing energy development and jobs to North Carolina.
So far in 2014, more than $2 million has been spent in TV ad buys as part of a coordinated, partisan effort to unseat six Republican state legislators and stop further work on a pro-growth agenda in North Carolina. It appears that the ads target Republican legislators who either live near areas likely to use hydraulic fracturing (fracking) in order to produce natural gas or are being targeted for defeat by Democrats in November. The legislators are: Sen. Chad Barefoot (R-Wake), District 18; Sen. Ronald Rabin (R-Harnett), District 12; Sen. Wesley Meredith (R-Cumberland), District 19; Sen. Trudy Wade (R-Guilford), District 27; Rep. Michele Presnell (R-Haywood), District 118; and Rep. Tim Moffitt (R-Buncombe), District 116.
Negative campaigning is nothing new, but there is one part of every ad that must be factual: the “paid for” disclaimer. This disclaimer is a requirement in North Carolina, pursuant to the “Basic Disclosure Requirements for All Political Advertisements” found at GS 163-278.39. In addition, the FCC requires political or issue ads to clearly identify who is paying for the advertisement.
Earlier this year, 10 ads were released targeting the six legislators separately and in groups with messages attacking hydraulic fracturing and legislation that had been considered or might be considered. All 10 ads indicate they had been “paid for” by a new group, the North Carolina Environmental Partnership (NCEP). The problem is neither “the North Carolina Environmental Partnership” nor “the NCEP” really exists. There is no entity by either name legally registered with the North Carolina secretary of state, with the State Board of Elections (SBOE), or in any other form in the state.
We can say with certainty that the NCEP is a shell group, with no legal status, used to hide the identities of out-of-state, extremist environmental groups moving into North Carolina in an attempt to defeat Republican legislators and influence legislation. These outside groups, the Natural Resources Defense Council (NRDC) based in New York and the Southern Environmental Law Center (SELC) headquartered in Charlottesville, Va., needed a group with a down-home name to hide behind as they attempted to elude scrutiny. Because neither the NRDC nor the SELC identifies donors in their reports, literally millions of dollars are being spent in this state by groups that refuse to identify their funding sources. In trying to hide their funding, however, the groups have run afoul of state and federal elections and lobbying regulations.
While NCEP is listed on ad disclaimers as the sponsor, NRDC and SELC filed statements with the SBOE claiming that in fact they had paid for the ads, produced the ads and made the media buys. Both the NRDC and the SELC were reluctant participants in the SBOE reporting process and to date have filed only incomplete forms.
In its initial letter to the SBOE, NRDC officials made it clear that they did not think their organization should be required to comply with North Carolina electioneering communication laws and that their activities did not “qualify as electioneering communications under North Carolina law.” The NRDC wrote in the March 28 letter that they would comply “in the spirit of transparency and based on informal advice received from State Board Elections staff.”*
Further ignoring North Carolina law in its reports, the NRDC failed to include all required information. NCGS 163-278.12C(a) (4) requires the report to list the elections to which the communications pertain and the names of the candidates identified in the ads. The NRDC reports do not identify the ads, when they were run, where they were run or the candidate(s) mentioned. As a result, it is impossible to match the TV ads to the expenditure, and consequently we are not able to determine how much the NRDC spent against any individual legislator.
The SELC filed separate reports with the SBOE showing significant expenditures in the spring and naming only one specific legislator running for re-election. The SELC’s initial letter referred to a March 24 letter** that was not posted to the SBOE campaign reporting page. The SELC also claimed its activities did “not qualify as electioneering communications under North Carolina law” and cited transparency as the reason they would submit to the law, just as the NRDC had done. The SELC also pointed to informal advice received from SBOE staff.*
That their reports are so closely aligned strongly suggests the two groups worked closely together on this campaign and that their actions have been carefully thought out.
The SELC also failed to include all required information on its reports and did not identify the individual ads or disclose stations or the markets where the ads appeared. They only named one legislator – Sen. Rabin – even though in the same ad Sens. Meredith and Barefoot were also targeted. SELC did not indicate why they believed they should report expenditures for ads that were “paid for” by a separate and distinct organization.
In truth, the group’s reporting and non-reporting are so chaotic that it is difficult to decode. Is that the result of incompetence – or a conscious attempt to muddy the waters? There is one expenditure that stands out, however, and may help to demonstrate how far these groups would go to hide the source of the money flowing into North Carolina.
The SELC, which is registered to lobby in North Carolina, reported to the Lobbying Compliance Division of the NC secretary of state that it had paid $102,284.52 to Devine, Mulvey, Longabaugh, Inc., a liberal media consultant group based in Washington, D.C. SELC described the expenditure as “production and placement of TV ads” and indicated that the payment had been made March 20. In the SELC’s report to the SBOE, it reported an expenditure on March 20 to the same payee as in the lobbying report: $34,094.84 – exactly one third of the $102,284.52 amount reported to the secretary of state. Why would it report one figure to the SBOE and another to the lobbying watchdog? But the story doesn’t stop there. On March 20, the NRDC appears to claim the very same expenditure in its initial SBOE reports.
The lobbying reporting is triggered by advertisements that induce actions that seek to influence legislation or legislators in North Carolina. By filing with the secretary of state (§ 120C-100 (13)) and the SBOE, the SELC is acknowledging the ads are attempting to not only defeat the legislators but also to influence legislation.
Because the NRDC is not registered to lobby in North Carolina yet and does not file reports with the Lobbying Compliance Division of the NC secretary of state, it appears that the NRDC has violated state lobbying laws. This appears to be a serious slipup on the part of these two groups, as one is acknowledging it needs to report to comply with state law and the other is not reporting and has not even registered. This failure, or willful ignoring of the law, points to a plan to skirt election and lobbying laws in North Carolina.
Based on North Carolina statutes, the NCEP should have filed as an organization and reported its contributions and expenditures. If its name is on the disclaimer but it is not in fact paying for the ad, as it now appears since the other groups are reporting the expenditure, then someone has likely committed a crime.
* What advice did the SBOE give the NRDC and SELC, and what prompted the SBOE to give them “advice”? There are no documents displayed on the SBOE’s website that would answer that question. Civitas, on Sept. 9, 2014, made an official public records request to the SBOE for all communications between SBOE members and staff and the NRDC, the SELC, and the NCEP.
** There is no evidence of a “March 24 letter” posted on the SBOE’s campaign finance report search page.