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Nebraska lawmakers began debate Tuesday on whether to close a loophole that allowed the conservative, Virginia-based group Americans for Prosperity to send out mailings and run radio ads against Nebraska political candidates without reporting what it spent.

"They deliberately and specifically decided to hide in the murky shadows of secrecy," said Lincoln Sen. Bill Avery, whose bill (LB606) would close the loophole.

His measure had its genesis in the waning days of the 2010 election, when Americans for Prosperity paid for mailings, newspaper inserts and radio ads that some say attacked several Democratic lawmakers running for re-election to the nonpartisan Legislature.

One of the mailings, for example, said "(Lincoln Sen.) Danielle Conrad has raised taxes on every family and business in Nebraska. ... She even voted to override Gov. Heineman's veto of legislation that increased the gas tax (2008:LB959)."

It also said said things like this: "Roughly 1,000 more Lincoln residents are searching for a job today than when Danielle Conrad took office," and noted other votes she made in the Legislature.

But because they did not openly urge people to vote for or against a political candidate, AFP maintains it does not have to disclose how much money it spent on the mailings criticizing the record of Conrad and other lawmakers -- something required of candidates, political action committees and independent committees formed by interest groups.

"That is not how we should do business in this state," Avery said.

In a December letter to Frank Daley, executive director of the Nebraska Accountability and Disclosure Commission, AFP lawyer Jason Torchinsky said the group did not have to report its expenditures because its activities are designed "to inform citizens of certain aspects of legislative records, cite specific pieces of legislation and discuss policy implications. A communication that merely informs citizens of a legislator's record does not constitute 'express advocacy,' and does not 'assist' or 'oppose' the election of a candidate."

Political campaigns, political action committees and independent committees formed by interest groups are required to file campaign spending reports 30 days and 10 days before elections. They also must report any last-minute expenditures. The idea is to give political opponents an idea of how much they might have to spend to counter opposition ads.

Avery's bill would add language that would subject groups like AFP to the reporting requirements.

"It is important because it will increase transparency in our political process," Avery said.

Omaha Sen. Scott Lautenbaugh used the debate to again propose gutting the Nebraska Campaign Finance Limitation Act, which he called an "ineffective, ridiculous law."

Corporations and groups like AFP were emboldened by a 2010 U.S. Supreme Court ruling that reversed decades of precedent by lifting restrictions on campaign spending by for-profit corporations and 501(c)(4) "social advocacy organizations" such as AFP.

The case stemmed from a challenge by the conservative, nonprofit group Citizens United of a Federal Election Commission ruling that it could not run commercials promoting its documentary critical of Hillary Rodham Clinton, who was seeking the Democratic presidential nomination.

The Supreme Court ruled banning corporations from spending money for "express advocacy" was unconstitutional.

AFP is heavily financed by billionaire brothers Charles and David Koch, who have been active in supporting Wisconsin Gov. Scott Walker's crusade against collective bargaining rights for public workers. David Koch, who lives in New York, has been a major contributor to the tea party and to term-limit movements.

Mike Friend, a former state senator and now director of the Nebraska chapter of AFP, said earlier the group "will continue to help mobilize and educate citizens to make their voices effectively heard in public policy issue campaigns" even if Avery's bill becomes law.

According to AFP's website, the group and its foundation "are committed to educating citizens about economic policy and mobilizing those citizens as advocates in the public policy process. AFP is an organization of grass-roots leaders who engage citizens in the name of limited government and free markets on the local, state and federal levels. The grass-roots activists of AFP advocate for public policies that champion the principles of entrepreneurship and fiscal and regulatory restraint."

Reach Kevin O'Hanlon at 402-473-2682 or kohanlon@journalstar.com

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