Vermont’s unofficial campaign season won’t begin for several more weeks. But a shadow campaign has been in full swing for months, contested by deep-pocketed groups that disclose little or nothing about themselves. Oh, they don’t call it campaigning; they call it “issue advocacy.” But they are clearly trying to influence public debate on some of the biggest issues facing Vermont.

The groups are:

— Bruce Lisman’s Campaign for Vermont (CFV), which promotes a variety of conservative issues.

— Vermonters for Health Care Freedom (VHCF), which opposes Governor Shumlin’s health care reform plan.

— Wake Up Opt Out (WU), which opposes the use of “smart meters” for residential utility customers.

— Energize Vermont (EV), which opposes large-scale wind power.

These groups can operate with little or no public disclosure. We don’t know where they get their money*, how much they’ve got, or how much they’re spending. They are regulated under IRS rules, not campaign finance law; their only reporting requirements are to the IRS, and that’s based on the tax year, not the campaign season. Which means that they won’t have to report anything about 2012 until April 2013, long after this year’s elections.

*With the exception of CFV; Lisman has volunteered that so far, he’s the sole source of its money. He won’t say how much he’s given or how it’s been spent. Ironic, for a guy who trumpets transparency as one of his core issues.

The four groups can be considered as two like-minded pairs.  

1. Campaign for Vermont and Vermonters for Health Care Freedom.

Both are 501c4’s, “social welfare organizations” under IRS rules. Contributions are not tax-deductible*. They are allowed to engage in some political activities, but that is not meant to be their primary focus.

*Due to my own misreading of IRS regs, I previously wrote that Lisman was getting a tax deduction on donations to his own group. He is not. I apologize for the error.

These groups are spending heavily, promoting key Republican issues well in advance of of campaign season. According to Andy Bromage in Seven Days, Lisman’s CFV has been running 10-12 commercials per day for three months on Vermont’s two biggest news/talk stations — WVMT-AM in Colchester and WDEV-FM/AM in Waterbury. WDEV’s Eric Michaels told Bromage the ad buys are very unusual.

It’s not uncommon for advocacy groups to buy up huge blocks of airtime in the days or weeks ahead of a controversial vote, such as same-sex marriage or Vermont Yankee, Michaels says. What’s different about Campaign for Vermont, he says, is how sustained it is, stretching uninterrupted over a period of months.

VHCF is making its own extensive buys on radio and television; this alleged “social welfare organization” acting as a stalking horse for Randy Brock’s gubernatorial campaign, which is certain to make health care reform its primary issue. It’s purely coincidence, we’re sure, that VHCF founder Darcie Johnston is a longtime Brock adviser and recently left VHCF to take a role in Brock’s campaign.

Political analyst (and Vermont Pundit Laureate) Eric Davis, speaking recently on WDEV’s Mark Johnson Show, said he expects CFV and VHCF to “come as close to the line as they possibly can, and a lot of Randy Brock’s message will come from those groups.” And, “as long as they don’t actually say the words ‘Vote for Randy Brock,’ it’s legal.”

It’s also legal for them to fundraise in secret, a fact touted by Jeff Wennberg, the new head of VHCF, according to the Vermont Press Bureau:  

Would-be donors worried about being outed as single-payer opponents need not worry.   Since VHCF is a 501(c)(4) nonprofit, Wennberg says, “there is no limit on the amount an individual or corporation can contribute and all donations are kept confidential by law.”

Some have called for disclosure requirements on 501c4s. This would certainly be one way to shine some light on this very dark, and growing, area of political activity. But some argue against such requirements. Why? Try this example.  Let’s say you’re an employee at Vermont Yankee who supports the Sierra Club, a 501c4. You might highly value the ability to conceal your support from your employer.

Opponents of disclosure say there’s a simpler way: enforce current IRS regulations. In recent years, some 501c4s have gone very overtly into politics, in ways that should imperil their status. They may be about to experience some pushback.

…the IRS has sent detailed questionnaires to several Tea Party organizations — and possibly other political groups — to determine if they truly qualify for the 501c4 designation intended for groups whose exclusive purpose is to promote social welfare.

…The tax code requires 501c4 groups to be operated “exclusive” for social welfare purposes – -which does not include intervention in political campaigns. The IRS has allowed the groups to engage in political activity as long as it was not therir primary purpose. But for many of these groups, it’s hard to see what other purpose they could possibly have.

If the IRS enforced the rules, the political 501c4s would have to change direction or convert to 527 status, which allows political activity but does require disclosure.

In the meantime, though, we have two 501c4’s engaging in extensive political activity.  While we await possible IRS action — and it’s already getting a lot of partisan blowback for “harassing” conservative groups, which is likely to discourage any real crackdown — CFV and VHCF are playing significant roles in bolstering the Vermont Republican Party.  

One more thing. Plans are afoot for another Vermont-based 501c4, this one promoting a left/progressive agenda — a liberal alternative to CFV, you might say. As a c4, it would be operate without disclosure of funding or expenditures, except under IRS rules. That’s about all we can tell you right now, except to note that certain domain names have already been registered and a rudimentary website established. Expect more details in the near future.

2. Energize Vermont and Wake Up Opt Out.

EV is a 501c3, a charitable organization. Donations are tax-deductible. 501c3s are allowed to do a limited amount of lobbying and issue advocacy, but their primary efforts should be charitable. 501c3s, like c4s, are subject to IRS reporting requirements, not campaign rules and laws.

WU is neither, according to its campaign manager Jesse Mayhew. He describes it as a “nascent organization” that doesn’t yet have a structure. But in spite of its “nascent” status, it has mounted an extensive advertising and advocacy campaign against smart meters. Mayhew says that 100% of its funding comes from within Vermont, but will say no more. And Mayhew’s is the only name publicly associated with the group; he’s unwilling to provide other names or even a membership count. (EV does list eight Vermonters on its governing board; all are from the Rutland area near the site of the proposed Ira wind farm, which was tabled in 2010.)

These groups have many things in common.

1. They both oppose “green” energy projects: large-scale wind power and smart meters.

2. Both have made significant strides in advancing their viewpoints. On Town Meeting Day, several communities approved resolutions opposed to smart meters. EV has been a significant player in developing opposition to large-scale wind projects.

3. Both have managed to create significant splits in the left/enviro community. Which is an accomplishment that any pro-industry group would envy.

4. Both claim to be grassroots Vermont organizations, but both are headed by Massachusetts PR consultants who are partners in the same communications firm: Mayhew of WU and Lukas Snelling of EV. Their firm specializes in “green” image-building for corporations.

5.  Neither discloses any information about funding or expenditures.

6. Because of this lack of disclosure, it’s difficult to evaluate their arguments. Some of their reasoning strikes me as plausible; some, frankly, does not. (One example: WU’s contention that smart meters are vulnerable to “data hacking.” Smart meters produce a single data point: how much electricity is being used at a given moment. It’s hard to see how that would be worth a hacker’s time.)

Both groups have their experts and scientific studies; but these days, everybody does. Even creationists and global-warming deniers. I can’t prove that these groups are using bad science, but when they don’t disclose anything about their funding, I have trouble taking their assertions at face value — especially when some arguments seem dubious at best.

A final note.

I’m not trying to depict all four of these groups as entirely — or equally — malevolent. But they all share a common modus operandi: assuming sizable roles in political discourse while operating with an almost complete lack of transparency. This strikes me as fundamentally bad for democracy.

Coming soon to this space… another look at money in our politics: Vermont’s outdated, inadequate campaign disclosure laws.