'Distressing': Report Details How Trade Organizations Plow Billions in Unaccountable Cash to Lobby Lawmakers

A new report from nonprofit research group MapLight details the way that trade organizations spend huge amounts of money on lobbying that’s seldom accounted for due to tax reporting loopholes. 

MapLight examined how trade organizations are using legal loopholes in their status as 501(c)(6) nonprofit groups to funnel hundreds of millions—even billions—of dollars in lobbying lawmakers to push industry priorities. 

According to the report:

With a combination of large cashflows and secrecy, said University of Miami law professor Frances R. Hill, an expert in the U.S. tax code, comes the opportunity to use an almost unlimited slush fund to influence policy.

“The trade associations are more alien to a lot of people who are interested in exempt organizations than the 501(c)(3) public charities or 501(c)(4) social welfare organizations, which have become standard campaign participants,” said Hill. “As long as people don’t really bother you and aren’t too upset about you, you can do fairly amazing or distressing things.”

Examples of the unregulated spending uncovered by MapLight include:

• The American Petroleum Institute, $15 million in expenses for “advocacy consulting.”
• The National Association of Home Builders, $2.2 million for advocacy.
• The Motor & Equipment Manufacturers Association, $706,000 on “trade and tax advocacy.”