Transparency is one of the bedrock principles of our election system. For voters to meaningfully participate in the democratic process, it’s vital that they have access to complete and accurate information about who is spending to influence their vote.
Transparency is especially important in our current political process, in which wealthy donors and special interests are able to spend unlimited amounts to influence our elections.
As the 2024 presidential election heats up, and super PACs and other “independent” groups actively spend money — they’ve already spent hundreds of millions of dollars — backing their preferred candidates, transparency is as important as ever.
Without information about who is bankrolling these efforts, voters cannot meaningfully evaluate the credibility of and intentions underlying the political ads that these groups are paying for.
This vital electoral transparency is undermined whenever a contributor uses a “straw donor” — an intermediary person or company that is used to funnel money to a political committee — to conceal their identity as the true source of the political contribution.
Straw donor schemes mask the origins of the money spent to influence our elections. Since the Supreme Court’s 2010 Citizens United decision allowed corporations to make unlimited political contributions to super PACs and other “independent” groups that spend on elections, straw donor schemes often involve the use of an intermediary entity, like a limited liability company (LLC) or trust, to mask the true contributor’s identity.
That’s what appears to have happened last summer: Someone registered “Head East LLC” in North Dakota on July 24, 2023, and then — just fifteen days later, on August 8, 2023 — used it to contribute $150,000 to Best of America PAC, a super PAC supporting the 2024 presidential campaign of North Dakota’s governor, Doug Burgum.
There is no information about Head East LLC on any publicly available database or resource, and the LLC appears to exist solely on paper; the address it provided to the super PAC is the office of its registered agent, a corporation that provides registered agent services for countless LLCs.
In short, there is no indication that Head East LLC conducted any activity — commercial or otherwise — during the fifteen-day window between when it was organized and when it was used to make a six-figure super PAC contribution.
That leaves no explanation for how the LLC could have financed the contribution without someone else giving it the funds to do so, in an apparent effort to conceal the true donor’s identity — exactly what federal law prohibits.
As a result, the available information strongly suggests that Head East LLC was organized and used to illegally funnel $150,000 to the super PAC backing Burgum’s campaign, without identifying who actually provided that money.
Campaign Legal Center (CLC) has filed a complaint urging the Federal Election Commission (FEC) to investigate this apparent straw donor scheme and enforce the law.
In response to a previous complaint that CLC filed in 2021, the FEC handed down a fine against the owner of an entity called “Tomfoolery LLC” that was used in a straw donor scheme to funnel money to a super PAC.
As with “Head East LLC,” the circumstances outlined in CLC’s complaint strongly suggested that “Tomfoolery LLC” was not the true source of the funds donated to a super PAC, and thus that the true donor’s identity had been illegally concealed from the public.
The FEC should likewise investigate “Head East LLC” and impose appropriate consequences for violations of the law, creating real accountability and helping protect voters’ democratic rights.
As political campaigns and super PACs continue spending in the 2024 election, it’s imperative that the FEC enforce the federal laws that prohibit straw donor schemes and promote electoral transparency.