Does the NFIB represent small business…or big special interests?

Cross-posted from Public Campaign website.

Analysis by Public Campaign and Alliance for a Just Society

The National Federation of Independent Businesses (NFIB), heralded as the “voice” of America’s small businesses, has received renewed scrutiny due to its role as the lead plaintiff in the lawsuit to throw out the Affordable Care Act, which awaits a decision from the Supreme Court on Thursday. 

Reps. Raul Grijalva (D-Ariz.) and Keith Ellison (D-Minn.) have called on the group to release information about a $3.7 million contribution from Crossroads GPS and other donors, but NFIB likely won’t do this willingly. From new analysis by Public Campaign and the Alliance for a Just Society of publicly available IRS 990 forms we can learn some information about their donors—the donations are big, getting bigger, and probably not from everyday small businesses.

The NFIB’s reliance on big money donations to fight their legal battle highlights what we’re seeing in elections generally—a political and policy system increasingly driven by wealthy special interests.

Key Points (full analysis here):

  • The Washington Post reported this weekend that the NFIB received $3.7 million in 2010 from Karl Rove’s outside political group, Crossroads GPS, a 501(c)(4). While Crossroads GPS keeps its donors secret, its aligned super PAC (American Crossroads) has received millions from some of the country’s wealthiest donors and special interests. For Crossroads GPS, aside from helping the group reach its political goals, its so-called “social welfare” grant to NFIB could serve as a way to meet its “primary purpose” threshold so the IRS does not investigate the group and its preferential tax status.
  •  Money from large donors to the NFIB and its Legal Center jumped after 2009, coinciding with its move to challenge the health care law in 2010. Between 2010 and 2011, NFIB and the Legal Center took in more than $10 million from just ten donors. Compared to their biggest donations in 2009 ($21,000 for NFIB and $7,500 for the Legal Center), this appears to be an unusual influx of very large checks. What “small businesses” are giving six- and seven-figure donations to trade associations?
  •  Just one large donation to the NFIB Small Business Legal Center in each year ($1.15 million in 2010 and $2.04 million in 2011) more than covered the major outside legal expenses it incurred in those years, presumably connected to the lawsuit to block health care reform.
  •  In 2011, the biggest contributions to NFIB ($1.65 million) and the Legal Center ($2.04 million) sum up to $3.69 million. Did this money come from Crossroads GPS (which gave $3.7 million, practically the same amount, in 2010), or did this money come from one or two other deep-pocketed donors with key political interests?

Since non-profits like NFIB and the NFIB Small Business Legal Center are not required to disclose their donors, despite being heavily involved in politics and policymaking, we have limited information on how they fund their activities. Do they want to dismantle health care reform in the interest of America’s small business owners or for the narrow interests of a few wealthy donors and organizations? It’s questionable that small business owners are willing to give the six-figure donations that have fueled NFIB’s work against health care reform.

The group’s PAC and executives have overwhelmingly supported Republican candidates over the years, but the increase in large secret donations make this bigger than partisanship. It’s about wealthy interests and corporations using front groups to push their agenda—politically and through the legal system.

The 24 year olds that may get thrown off their parents’ insurance if the ACA is struck down – like, for example, this daughter of a small business owner who spoke on the Supreme Court steps in March while NFIB’s high-powered lawyer gave oral arguments against the law inside – just don’t have the money to compete.

Download a full analysis of NFIB’s donations, prepared by Public Campaign and the Alliance for a Just Society.

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