The next fight in Tennessee’s campaign finance disclosure laws – Tennessee Lookout

The next fronts in Tennessee’s campaign finance’s never-ending game of whack-a-mole appear to be tracking the disclosures from education groups and regulation of newly formed conservative subgroups challenging incumbent Republicans. 

Campaign finance records show that it’s nearly impossible for the public to know the specific donors to both the Tennessee Education Association political action committee (PAC) and those of pro-voucher and charter groups like Tennesseans For Students Success, TennesseeCan, Campaign for Great Public Schools and the Tennessee Federation for Children.

New groups like the Sumner County Constitutional Republicans and Tennessee Stands also create a similar problem for campaign finance officials, as the groups resist pressure to formally create PACs despite expending money for political purposes. 

Bill Young, the executive director of the Tennessee Registry of Election Finance, said the unregistered political groups are a higher priority for his agency because the registry at least has disclosure around who runs the education related PACs in part due to a law passed in 2022.

That year state lawmakers made an effort to rein in 501c4 undisclosed and the strengthened the rules around PAC disclosures. A 501c4 is a nonprofit political advocacy organization that registers with Internal Revenue Service for tax benefits. They’re different from traditional nonprofits, or 501c3, in that contributors can’t receive tax deductions for donations to the group. Contributions made to 501c4s aren’t required to be disclosed.

The state House and Senate speakers helped navigate the updated campaign finance legislation following the indictments of former House Speaker Glen Casada and his top aide Cade Cothren.

The new laws allowed the public to better see the spending by many of the education groups. But the current law still allows 501c4s tied to national groups to hide contributor identities, a particular problem among the pro-charter and voucher groups. 

For example, Team Kid PAC received 99.9% of its donations from Tennesseans for Student Success, an advocacy organization whose revenue is tied to donations. Students Success previously told the Lookout its donors have a “right to maintain their privacy.” But Team Kid PAC has significant influence in state elections, spending over $537,000 during the 2022 cycle, the most of any group. Other pro-voucher and charter groups operating PACs in the state, like Great Campaign for Public Schools raised 100% of its money from its parent organization, TennesseeCan’s PAC 77.3% and Tennessee Federation for Children 42.9%. 

The current campaign finance system allows this as long as the donor that gives money to the parent organization doesn’t explicit earmark it for a donation. But there is some doubt as to whether this rule is being followed. Documents first published by News Channel 5, show that in 2016 these education groups formed an organization called Tennessee Coalition for Students, which specifically sought out contributions to fund political activity.  

Who are the education association donors?

For informed observers, the donors to the Tennessee Education Association PAC seem obvious because the group is funded by dues from participating teachers’ paycheck, a portion of which goes to its political spending. 

But under state law any donation made by individual to a PAC that falls below $100 during the reporting period does not have to be disclosed on its campaign finance report.

Since 2009, the education association’s PAC has noted around $137,000 in donations from a specific source despite spending $2.2 million over that period. The rest of its money raised is label as unitemized donations. 

But other union-related PACs which raise money through a similar dues process publish their member donations even if they are small amounts. For example, the International Brotherhood of Electrical Workers has over 1,000 individuals listed in donations to its PAC, ranging from $5 to $1,000 over the past 15 years. Some unions like to list their donors to publicly show the number of members involved with the organization. 

Conservative coalition PACs

The registry is still auditing former Williamson County state Senate candidate Gary Humble to find out if Humble mixed campaign funds with his nonprofit and media organization, Tennessee Stands. Humble contends Tennessee Stands isn’t a political action committee or 501c4, meaning he doesn’t have to file any reports with the registry. 

Humble challenged Senate Majority Leader Jack Johnson, R-Franklin, losing by 1,200 votes. He drew the ire of campaign finance officials after hosting rallies for his campaign during nonprofit events held by Tennessee Stands. 

A similar problem is emerging with Sumner County Constitutional Republicans, a loosely organized political group who have gained seats on the county commission and have a member challenging Sen. Ferrell Haile, R-Gallatin. The group has so far resisted forming a political action committee or 501c4.