Corporate Funding of ‘Astroturf’ Ad Campaigns Must Be Disclosed, House Leader Says

An influential legislator is taking aim at what he considers “astroturf” lobbying by large government contractors.

Under a measure sponsored by House Majority Leader Eric Luedtke (D-Montgomery) and 14 others, companies with million-dollar state government contracts would be required to disclose contributions they make to advocacy organizations.

“It’s a transparency bill that allows the public in Maryland to know whether the people advocating for major taxpayer-funded projects in their community have a financial stake in the project in question,” Luedtke told members of two House committees at a March 10 hearing.

On Saturday, the House of Delegates gave preliminary approval to the bill, which is expected to come up for a final vote in the chamber on Monday.

At the national level, it’s common for companies seeking a government contract to fund tax-exempt non-profits. Organizations formed under section Section 501(c)(4) of federal tax law do not have to disclose their donors, and their generic-sounding names offer no hint as to who is behind them. The practice is less common at the state level.

Luedtke said that the broadcast and internet advertising campaigns these groups sponsor “create the appearance of a grassroots movement when, in truth, support comes from a narrow group of special interests that have a financial interest in a project.”

His bill would require companies with state government contracts of a million dollars or more to disclose to the state Board of Elections any donations they make to any advocacy organization.

Champe McCulloch, head of the Maryland Chapter of the Associated General Contractors of America, told lawmakers that Luedtke’s bill is intended to dissuade companies from engaging in public dialogue about policy.

“This bill is simply inappropriate and puts a burden on contractors,” he said. “It is intended to chill their speech. This is a contribution that is equivalent to speech, as the Supreme Court has recognized.”

Luedtke did not identify by name any advocacy organizations he considers “astroturf,” but he offered a “hypothetical” scenario regarding “a proposal to build a bridge between St. Mary’s County and Somerset County” in which a state contractor that hopes to build the bridge funds an advocacy organization called “People for Southern Crossing.”

“That business would still be able to create that organization, to fund it,” the lawmaker said. “They would just have to report that they were funding it, so the public would have that knowledge.”

As it happens, the Hogan administration is pursing a plan to rebuild the American Legion Bridge, which connects Luedtke’s home county of Montgomery with Fairfax County, Va. The state’s plan would also add controversial variably priced toll lanes to the Capital Beltway and Interstate 270.

Traffic Relief Now, an organization run by Doug Mayer, a former communications director for Gov. Lawrence J. Hogan Jr. (R), was formed last year to marshal public support for the plan. Traffic Relief Now has not disclosed its contributors.

In an interview, Mayer said he would support a disclosure bill if it applied to public sector unions — “including AFSCME and the teachers union” — as well as corporations. “A lot of politicians want transparency to only run one way, but what’s good for the goose is good for the gander,” he said.

If Luedtke won’t include unions, Mayer added, “he’s just a partisan hack like the rest of us.” Republicans attempted to amend the bill in committee and on the floor to include unions, but those efforts failed.

“I would vote for this bill if it included all parties that do this practice,” said Del. Nicholaus R. Kipke (R-Anne Arundel). “I think it’s important for people to know who are behind the dollars funding the PR campaigns around certain projects.”

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