By Alina SelyukhPosted 2012/09/05 at 4:54 pm EDT
WASHINGTON, Sep. 5, 2012 (Reuters) — A major banking industry trade group is planning a foray into the U.S. elections by creating a tax-exempt organization capable of raising unlimited anonymous funds, the groups’ chief operating officer said Wednesday.
The board of directors at the American Bankers Association, which represents about 5,000 U.S. banks, will vote on Thursday whether to launch a nonprofit advocacy group, which would join the scores of tax-exempts already pouring millions into the 2012 election without having to disclose donors.
“It’s a capability that most trade associations have,” said ABA’s Chief Operating Officer Michael Hunter. “It’s been on the table for a while … In some ways this is just building out a capability that the ABA needs in the long term.”
The group is expected to focus on changing the 2010 Dodd-Frank law that overhauled federal oversight of the financial system, Hunter said.
But it would be up to the nonprofit’s own board of directors – proposed to be made up of 14 bankers – to decide which House and Senate races the nonprofit would seek to influence, he said.
“They could decide to marshal resources for the 2013 election,” Hunter said. “Nothing’s on the table an everything’s on the table.”
The ABA’s traditional disclosed donations so far this campaign cycle stand at about $1.7 million, and have gone predominantly to Republican candidates in the House and Senate, according to a tally on the website of the Center for Responsive Politics.
Tax-exempt organizations have been prominent political players for nearly a decade, and have been under scrutiny for keeping donors anonymous. The issue has especially escalated this year because of the Democrats’ quest to restrain powerful conservative groups.
The Internal Revenue Service grants these groups tax exemption as long as most of their money is not spent on politics.
Corporations gained new political power in 2010 when the U.S. Supreme Court ruled that corporations’ and unions’ free speech rights were equal to those of individuals. The ruling lifted limits on what they may directly spend from their treasuries to support or oppose a candidate.
Hunter said the nonprofit would ask member banks for donations depending on the bank’s size. Small ones will be asked for $1,000, he said, medium-sized banks $5,000, and $10,000 from large ones.
If all members contribute what they’re asked for, the nonprofit would kick off with $6 million, but Hunter said he expected 40 percent to 50 percent of the members to participate, putting the likely startup cash pool at about $2 million.
The ABA’s plan for a nonprofit, revealed in a private call with members on Tuesday, was first reported by Bloomberg.
(Additional reporting by Emily Stephenson; Editing by M.D. Golan)