For an example of the fluidity of campaign finance rules, as well as the tangled web of connections between candidates and super PACs, look no further than the digital consulting firm Targeted Victory.

So far, the firm’s hauled in $4.1 million working for Mitt Romney’s presidential campaign and American Crossroads, the super PAC launched by GOP strategist Karl Rove. Just down the hall, its neighbors in Arlington, Va., include an office housing four other companies working for Romney, American Crossroads or the pro-Romney super PAC Restore Our Future.

With the rise of super PACs, the jet-fueled political action committees that can take unlimited contributions, many campaign finance watchdogs have focused on the hundreds of millions of dollars being raised this presidential election cycle. But after the most recent campaign filings came in last week, ProPublica decided to track the other side of the equation: Where the money goes.

Our analysis found that more than $306 million has been spent so far by major super PACs and the five leading presidential candidates. In some cases, payees serve both candidates and the super PACs aligned with them, raising the specter that groups may be working together in ways that violate the rules, campaign finance experts said. We also found instances in which overseers of some political action committees directed hefty fees to their own companies, a legal form of self-dealing.

Among the top 200 payees, there were dozens of firms about which little is known. With generic names like Financial Innovations, Election Connections, Postage for Direct Mail Fundraising or Strategic Media Services, it’s sometimes unclear who runs them or exactly what they do. Many have short histories: Four of the six top-paid consulting firms for Winning Our Future, the super PAC supporting Newt Gingrich, have been launched since July.

At the same time, familiar names cropped up regularly among the top earners. Democratic strategists David Axelrod, Ronald Rosenblith and Barack Obama’s team from 2008 are back in place. On the Republican side, there were companies connected to Karl Rove, Carl Forti, David Carney and Michael Dubke.

Targeted Victory’s initial manager was Tony Feather, a close friend of Rove’s who served as the political director of the Bush-Cheney campaign in 2000. Feather also co-founded longtime GOP consulting firm DCI Direct and its sister firm, FLS Connect. Targeted Victory co-founder Michael Beach oversaw the national voter turnout program for the Republican National Committee in the 2008 election cycle.

Like some other outside spending groups, super PACs are allowed to raise and spend unlimited funds, but they are not allowed to coordinate with campaigns.

Yet the rules governing “coordination” have been narrowly interpreted and rarely enforced by regulators. As long as candidates and super PACs don’t discuss the granular ins and outs of their spending, such as the placement and length of election ads, they can discuss strategy. Candidates can even help raise money for super PACs, or even, say, ask their father or good friend to donate.

Campaign-finance experts say there’s plenty of room for activity that average people would consider “coordination” that legally doesn’t count. They also said when consultants work for both a super PAC and a candidate, regulators should question whether they are operating independently.

“Any time it’s the same individual who is providing advice and services to a campaign and a super PAC, there is the danger of coordination,” said Rick Hasen, a law professor at the University of California-Irvine who runs the Election Law blog. “I’m sure most of the individuals playing these roles are getting legal advice on what they can and cannot do. The human brain being what it is, though, I think it is very difficult to separate those roles.”

Expenditure records show that a company called TargetPoint Consulting provides “survey research” to Mitt Romney’s campaign while also doing “direct mail consulting” for Restore Our Future, the pro-Romney super PAC. In February, the founder told The New York Times that while he understood it could look “ridiculous,” his company had gone to great lengths to prevent improprieties, setting up a firewall between employees working on the different campaigns.

Even when the ties between super PACs and candidates are less direct, spending records show how their spheres overlap. For example, partners of GOP polling company Public Opinion Strategies set up NMB Research, a polling company that works for Restore Our Future. One Public Opinion partner, Neil Newhouse, serves as the chief pollster for Mitt Romney’s campaign.

American Crossroads uses four of the same consultants as Restore Our Future and three of the same consultants as Romney’s campaign. (This is hardly a shock: Carl Forti, a former political director for Romney, is political director of American Crossroads and senior strategist for Restore Our Future.) TargetPoint Consulting works for all three groups, although it’s only done $1,700 worth of work for American Crossroads.

On the Democratic side, NGP VAN, a company that sells software that helps with fundraising and FEC compliance, has done work for both the Obama campaign and two super PACs backing Obama. The Obama campaign has paid NGP VAN $130,000; the two super PACs have paid it less than $17,000.

Beyond potential coordination, the analysis done by ProPublica also showed how some who have set up super PACs are directing donors’ cash into their own pockets.

GOP strategist Nick Ryan, a former aide to Rick Santorum, for instance, started his direct-mail and telemarketing firm, Global Intermediate LLC, shortly after launching the pro-Santorum super PAC, the Red White and Blue Fund. Global Intermediate is now the second-biggest vendor for Red White and Blue, earning almost $1.9 million so far.

While Ryan couldn’t be reached for comment, the super PAC’s spokesman, Stuart Roy, acknowledged in an email to the Los Angeles Times in February that Ryan’s participation with Global Intermediate was “no big mystery, they have done our phones and mail programs in multiple states (very effectively, I might add).”

Candidates are prohibited from using campaign funds for personal use and must pay “fair market value” if they hire companies run by relatives or other insiders, but super PACs, like regular PACs, have no such restrictions. For years, the FEC has asked Congress to expand the ban on candidates using campaign funds for personal use to PACs. So far, Congress has not acted.

“My standard sound-bite advice is 2018donor beware,’ when giving to any political action committee,” said Paul S. Ryan, of the non-partisan Campaign Legal Center.

Some insider transactions are on a smaller scale. A man named Gary Franchi Jr. runs both Revolution PAC, a super PAC known for its Ron Paul action figures, and Restore the Republic, a social networking site for Paul followers. Since last July, Revolution PAC has been paying Restore the Republic more than $1,700 a month for office rent. When asked if the office had telephones, desks and computers, Franchi replied: “Oh, yeah.”

But the office turned out to actually be a box in a Northbrook, Ill., UPS store. Franchi did not return follow-up calls for comment.

by Kim Barker and Al Shaw ProPublica, March 28, 2012, 1:02 p.m.

Image Courtesy of   http://www.flickr.com/photos/newshour/

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The U.S. Citizens Association, a non-profit member organization based in Akron, Ohio called for the immediate release of the Federal Election Commission’s findings into the questionable fundraising practices conducted by the Obama 2008 Presidential campaign.

The first red flag regarding Obama’s 2008 fundraising came when the Washington Post reported that the “Obama campaign was allowing donors to use largely untraceable pre-paid credit cards that could potentially be used to evade limits on how much an individual is legally allowed to give or to mask a contributor’s identity.”

The problem with these pre-paid cards is that is makes it impossible to determine if foreign nationals are contributing to a campaign, or if single donors are giving multiple small donations, thus exceeding the contribution limits, or even if an outside group is purchasing these cards for individual donors to evade the reporting requirements.

It is also known that the Obama campaign received 47% of its donations from donors giving less than the$200 limit that would require automatic reporting. In comparison, John McCain’s 2008 Presidential campaign received 26% of his donations from less than $200 donors.

According to multiple press outlets and the U.S. Citizens Association independent investigations, the Obama 2008 Presidential campaign failed to identify the sources of millions of dollars of campaign contributions that appear to have been illegally accepted by the campaign. Various media reports have pointed to the unknown sources as having illegally come from outside the United States and exceeded the contribution limits that would require reporting donor information to the Federal Election Commission.

The FEC launched an audit of the Obama 2008 campaign in April of 2011, but no results of the investigation have been released to the public. According to reports in Roll Call, during the 2010 cycle, the Obama campaign led all organizations when it came to sending refunds to individual donors. Following the election, it disclosed disbursement transactions totaling more than $5.7 million in refunds.

“The FEC claims these audits take three to four years, or even longer to complete. That’s unacceptable,” said Lance Davis, Executive Director of U.S. Citizens Association. “President Obama has been in full campaign mode for at least the last year. We’re in 2012 now. Is the Obama campaign still accepting questionable contributions and where are they coming from?” Mr. Davis continued.

“The last thing the American people need is to find out in 2013, that Barack Obama’s campaign did receive illegal campaign contributions from foreign nationals in 2008 and 2012, and hid it from the voting public. At that point the hay’s in the barn, there’s nothing that can be done. Maybe that’s what they’re hoping for,” said Mr. Davis.

Davis continued, “Roll Call reports that as of the end of March (2011), Obama for America had spent nearly $3 million on legal fees since the 2008 election. In all, the president’s campaign spent three times more on lawyers after Election Day than in the two years preceding it. That alone should give the American people pause.”

The FEC has compiled a separate database of potentially questionable overseas donations that contains more than 11,500 contributions totaling $3.38 Million. More than 520 listed their “state” as “IR”, which the FEC often uses as an abbreviation for “information requested.” Another 63 listed it as “UK”, the United Kingdom.

But others came from places as far afield as Abu Dhabi, Addis Ababa, Beijing, Fallujah,Florence, Italy, and a wide selection of towns and cities in France. The Washington Post reported in 2008 that “the Obama Campaign allowed donors to use largely untraceable prepaid credit cards that could potentially be used to evade limits on how much an individual is legally allowed to give or to mask a contributor’s identity…”

“Faced with a huge influx of donations over the Internet, the campaign also chose not to use basic security measures to prevent potentially illegal or anonymous contributions from flowing into its accounts, aides acknowledged. Instead, the campaign is scrutinizing its books for improper donations after the money has been deposited.”

Mr. Davis says this practice of disabling security measures could lead to single donors being able to give multiple donations of $199 without being reported. “In fact, almost half of the money Obama raised in 2008, almost $200 Million came from donors giving less than $200, twice the number of John McCain.

But the research indicates that one donor in particular, who listed his name as ‘Good Will’, his employer as ‘Loving’ and his occupation as ‘You’ donated more than 1,000 times for a total of $17,375. The Obama campaign did nothing until notified by the FEC. Who knows who this person and thousands of other Obama donors really are or where they are from?” Davis says.

Mr. Davis sites reports from the Obama 2012 campaign that they plan to raise One Billion Dollars for the President’s re-election. “If they reach that number, how much of it will come from legal American donors and how much will be from illegal foreign sources or those donating over the legal limits?

We are demanding the FEC release the results of its audit now so all Americans have the full story of Obama’s so-called ‘record setting’ fundraising. The American people can then decide if they want deep pocketed foreigners picking our President.”

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