PI Original Micah Maidenberg Thursday January 13th, 2011, 4:05pm

Secret Money Enters Chicago's Aldermanic Races

For A Better Chicago plans to spend hundreds of thousands of dollars supporting candidates for Chicago's City Council and on issues-based messages. But voters won't get to know where some of its funds are coming from.

For A Better Chicago burst on the city's political scene earlier this week, stating in a news release that the organization has already raised approximately $1 million to influence the 2011 aldermanic races.

The vast majority of those funds -- some $800,000, the release stated -- would go toward council candidates willing to make the "difficult decisions" on education, economic development, city finances, and other issues. The organization is choosing candidates based on a questionnaire (PDF) it has posted online.

"A lot of this came out of conversations I had with people about what we might look like without  Rich Daley," said Greg Goldner, FBC's chair and the campaign manager for the outgoing mayor's successful 2003 re-election bid. Goldner is also CEO of the strategy and communications group Resolute Consulting.

In an interview Thursday, he described the group's overarching goal as continuing Daley's legacy among Chicago's next crop of aldermen. "We would say, and the mayor would admit, he's not perfect -- certainly improvements need to be made -- but look at the progress Chicago has made."

Asked about the sources of For A Better Chicago's eye-popping fund raising tally, Goldner said, "It's a combination of individuals and businesses. It's not from any one particular sector."

On the statement of organization (PDF) the group filed with the Illinois State Board of Elections on January 7, the FBC PAC reported that it had a mere $5,000 on hand on its creation date, December 28 of last year.

As of the time of this writing, the group had not filed any A-1s -- big donations of $1,000 or more that now must be disclosed within five business days of their receipt under last year's campaign finance reform bill -- according to the elections board website.

Goldner noted that the FBC PAC, like all political committees constituted in Illinois, must disclose its donations from the latter half of 2010 no later than January 20.

But Chicagoans may not learn the ultimate sources of other dollars the organization raises and uses for things like polling, research, and issue promotion during this year's City Council races.

In addition to their political action committee, FBC has initiated a 501(c)(4) non-profit organization, a group Goldner estimated currently has "a couple hundred thousand" dollars on hand. Those funds do not have to be disclosed in time for the February primary election and April run-off, or, possibly, ever.

The Internal Revenue Service approves tax-exempt 501(c)(4) status and requires these kinds of organization to file 990s, a form that provides a snapshot of the group's overall financial state. A spokesperson for the agency said 501(c) organizations have one year and five months after their creation to release their 990s. No 990 for the organization is presently available through the non-profit tracking site Guidestar.

IRS-sanctioned 501(c) organizations "have the advantage of usually not having to disclose their donors’ identity," the New York Times reported in September.

Such non-profits played a major role in taking advantage of the Supreme Court's controversial Citizens United decision to collect and spend unlimited amounts of what the Sunlight Foundation has called "dark money": political contributions from undisclosed sources. "The (c)(4) groups have become the tool used to hide corporate election-related spending," the organization wrote. At least on the federal level, Republican candidates for office, like Republican Illinois Senator Mark Kirk, benefited "overwhelmingly" from the torrent of corporate donations last year, Sunlight noted.

Goldner defended using a 501(c)(4) for this year's municipal election cycle, calling it "a pretty traditional model." He compared the set-up to a museum accepting donations from an anonymous source.

"All types of interest groups on the left and right use these vehicles. These donors aren't trying to influence any particular policy ... they will remain anonymous," he said, and by doing so "they can't be accused of trying to push any particular policy. It's an organization that won't lobby the City Council on issues. It will just engage in communications."

David Morrison, a spokesperson for the Illinois Campaign for Political Reform, expressed concern that big sums of undisclosed political money could start flowing through Chicago during the 2011 city elections.

Referring to the $1 million figure For A Better Chicago says it has, Morrison told Progress Illinois, "That money should be showing up if the money was raised by the PAC ... if they're talking about raising money into a non-profit, which they may well be, then that would be very troubling."

It's difficult for voters to suss out the intentions of various election year plans and messages if voters don't know who is paying for them, he went on to say. "You need to know what their biases are," he said.

Besides Goldner's description of the group as one seeking to continue Mayor Daley's legacy, some of their position commitments emerge in the FBC questionnaire. The document (PDF) talks about reducing the "head tax," reducing city costs and increasing efficiency of government operations, teacher evaluations, and the length of the Chicago Public Schools day.

"We're not going to be running negative ads against anyone," Goldner said. "We're going to be running a positive campaign for the people we endorse."

It remains to be seen which of the hundreds of prospective City Council members will seek For A Better Chicago's backing and if their use of unsourced funds becomes an issue itself during the campaign.

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