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Obama's own re-election effort was embarrassed this week by a New York Times report that $200,000 in bundled donations to his campaign was linked to Chicago relatives of a criminal fugitive with business operations in Mexico. The Obama campaign quickly returned the money. The case was different in that the suspicious Obama donations went to the president's re-election campaign, not to an affiliated super PAC. And there was no clear evidence that the donations were illegal or that any of the $200,000 had been directly funneled from the fugitive's Mexican business interests. But the case shows the difficulties facing any political organization or oversight agency in scrutinizing donors tied to hidden foreign interests. "It's a legitimate concern and there's no foolproof way to guard against it," said Lawrence M. Noble, a former FEC general counsel during the Clinton administration. Many of the largest super PACs also operate nonprofit groups, which do not have to publicly disclose the identities of their own donors. Under tax rules governing charities, the nonprofits are regulated by the Internal Revenue Service, not the FEC. As long as they carefully limit their political activities, they have to disclose donors' identities only to the IRS, not the FEC or the public. American Crossroads, Priorities USA Action and American Bridge 21st Century all have hybrid super PAC and nonprofit operations; Restore Our Future is a super PAC only. The two GOP-leaning super PACs amassed a total of nearly $80 million in 2011, including $31 million in donations to Crossroads' nonprofit, Crossroads GPS. The hybrid super PACs supporting Obama totaled $13 million, but Obama signaled this week he wants them to bolster fundraising to compete with the Republicans.
Election law experts who grappled with the last major foreign donation scandal in the 1990s said there are too many similarities between that era and the current rise of the super PACs. Joseph Sandler, a longtime Democratic Party election lawyer, said both periods have featured massive amounts of available campaign money, political organizations eager to stock their war chests and lax regulations unable to curb abuses. In the years leading up to the 1996 presidential campaign, fundraisers working for Chinese government interests took advantage of those weaknesses to funnel hundreds of thousands of dollars in illegal donations to the Democratic National Committee and the Clinton-Gore re-election campaign. The scandal spawned Senate and House investigations and led to criminal prosecutions that convicted 22 defendants. Sandler, who worked on internal DNC reforms afterwards, said super PACs appear ripe for similar abuses. "I think there's a consensus that we don't want foreign nationals influencing our elections," he said. "What I'd be worried about now is the same big money and failed vetting that we saw in the late `90s. All the warning signs are there."
[Associated
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