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Mitt Romney has made no secret of his disdain for the new Consumer Financial Protection Bureau. On Jan. 4, the day President Barack Obama went over the heads of the Senate and installed Richard Cordray as the agency’s director, Romney blasted the move as “Chicago-style politics at its worst” and denounced the CFPB as “perhaps the most powerful and unaccountable bureaucracy in the history of our nation.” Two weeks later payday lenders, who are now watched over by the consumer bureau, began lining up behind Romney.
They did so quietly. From Jan. 13 to Feb. 29, payday and auto-title lenders contributed $427,500 to Restore Our Future, the super PAC supporting Romney’s presidential campaign. More than half of that was funneled through limited-liability companies and other corporate entities with nondescript names that obscure the short-term lending industry as the source of the money.
That’s perfectly legal. Under the Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling, businesses can give as much money as they want to super PACs. For a company that’s been the subject of controversy and prefers not to make a big-dollar political contribution under its own name, donating through an LLC can be a useful tool to try to shield large donations from public view. Payday and auto-title lenders—the latter let borrowers put up their cars as loan collateral—came under fire during the financial crisis for offering short-term loans with double- and triple-digit interest rates.
“The Supreme Court said in Citizens United that for the first time corporations may give, [and] voters will know where the money is coming from,” says Trevor Potter, president of the Campaign Legal Center and a former chairman of the Federal Election Commission. “That’s simply not true. It is possible to have shell corporations created for the purpose of hiding the identity of donors.”
An entity called Rttta contributed $75,000 to Restore Our Future in January; its registered agent, J. Todd Rawle, is an executive with Check City, a payday lender based in Orem, Utah, according to a Bloomberg News review of state and federal records. That lender has a Las Vegas branch that shares an address with Rebs, which donated $25,000 to the super PAC during the same month; Rebs’s president, James Marchesi, is also a Check City executive. Select Management Resources gave Restore Our Future $100,000 on Jan. 13; its owner, Rod Aycox, is president of Loan Max, an auto-title loan company in Alpharetta, Ga. Moneytree, a payday lender based in Seattle, shares two corporate officers, David and Dennis Bassford, with Katsam, which donated $35,000 to Restore Our Future in February. None of the companies responded to numerous requests for comment.
On March 21, Senator Sheldon Whitehouse (D-R.I.) introduced legislation that would force super PACs to report contributions of more than $10,000 within 24 hours of receiving them, and to name the individual or corporation who donated the money. Whitehouse says the bill would crack down on donors who use limited-liability companies to disguise their identity. “If you have one or two or three phony shell organizations that you’re laundering your influence money through to obscure who you are, we can chase that back under this law,” says Whitehouse.
Potter, who also represents Americans for a Better Tomorrow, Tomorrow, the super PAC formed by Comedy Central’s Stephen Colbert, says he thinks the FEC should require LLCs to disclose more about the source of their donations. Otherwise, Potter says, “voters are unable to judge who is giving to a candidate, and what the candidate is agreeing to in return.”
The bottom line: In 2012 payday lenders have given a Romney super PAC $427,500, half of which came via LLCs that obscured their ties to the industry.