Ads against Abbott, other Texas Republicans by shadowy group test campaign ethics law

AUSTIN — The third biggest spender in Texas elections this year is a shadowy group that has not disclosed any information to the state, and is testing the limits of campaign ethics law, experts said.

Coulda Been Worse LLC has dumped more than $25 million into ads opposing Gov. Greg Abbott and other top Republicans, according to the media tracking company AdImpact. Since forming out of state in late August, Coulda Been Worse has not revealed its donors or leadership.

Ethics law experts and open government advocates say voters deserve to know who is trying to influence elections.

“It just isn’t fair to Texans, to the public, to have people spending so much money and not telling anybody who they are,” said Anthony Gutierrez, executive director of Common Cause Texas. “It seems clear they are going out of their way to keep the public from knowing.”

Coulda Been Worse, which draws its name from a statement Abbott made after the Uvalde school massacre, has run at least nine television ads in Texas, three of them in Spanish. While the bulk target Abbott, the ads also jab Attorney General Ken Paxton and Lt. Gov. Dan Patrick.

As the Nov. 8 election draws closer, the group has traded out ads that explicitly call out candidates for more vague attacks – an attempt experts say is likely designed to skirt state reporting requirements.

Yet ethics law experts interviewed by The Dallas Morning News were split on whether the ads toe the line or cross into mandatory disclosure territory.

As of Friday, Coulda Been Worse LLC had not filed anything with the Texas Ethics Commission.

Even if the group did, ethics law experts said the way Coulda Been Worse is organized as an LLC means it would likely only have to divulge its spending, not its donors.

“Even if they report it, we wouldn’t know who was behind it,” said James Clancy, a former chair of the Texas Ethics Commission. “And that’s the dark money tragedy.”

So-called dark money, spent by nonprofits not required to disclose the source, has typically played a prominent role in federal contests. But it’s appeared in Texas, too.

Nearly a decade ago, Steve Bresnen, an Austin lawyer who in the early 1990s helped his boss, Lt. Gov. Bob Bullock, draft the legislation that created the ethics commission, grew increasingly concerned about nonprofits creeping into state races.

Groups from the right and left, from Empower Texans to the Texas Organizing Project, were spending to influence state elections but not disclosing who their donors were, recalled Bresnen, who in 2014 tried but failed to get the commission to strengthen reporting requirements.

Speaking of Coulda Been Worse’s $25 million hit this year on Abbott and the top two other statewide officeholders, Bresnen said: “Historically, dark money nonprofits have been significantly lower. This is a number that is much larger than the historical levels – by an order of magnitude.”

In the governor’s race, since Sept. 1 and running through Tuesday’s vote, Coulda Been Worse forked over $19.4 million for ads attacking Abbott, according to AdImpact, which tracks money spent on broadcast, cable and digital advertising.

While the dark money group didn’t get low ad rates that broadcasters must offer candidates, and some of its 60-second TV spots aired in less desirable time slots, Coulda Been Worse at least in theory created a level playing field in this fall’s gubernatorial ad wars.

Between Sept. 1 and Tuesday’s election, Abbott has spent $44.7 million on all types of advertising. That effectively was matched by a combined $44.25 million spent by O’Rourke and Coulda Been Worse, according to AdImpact data.

Coulda Been Worse also spent nearly $5.7 million against Attorney General Ken Paxton, who is up for a third term under a cloud of legal troubles.

The group’s ads, which began airing about a week after Labor Day, began with a 60-second TV spot that showed a black-and-white photo of a glassy-eyed Abbott, while video snippets play on the right side of the screen.

“Wrong,” as the ad was titled, was the dark money group’s third-most-viewed ad. It goes on to describe Abbott’s tenure in dystopian terms – without naming the governor.

The spot cites Texas’ recent mass shootings, the deadly failure of its power grid in last year’s winter storm and its near-total ban on abortions – all staples of O’Rourke’s closing arguments against Abbott on the stump. The ad launches other now-dated attacks, such as disruptions to commerce caused by Abbott’s short-lived order that trucks crossing the Texas-Mexico border be inspected. “Education system craters, … property taxes crush homeowners,” it continues.

“Any one of these, a terrible shame for Texas,” the narrator says. “All of these, horrific signs. Something big is terribly, terribly wrong.”

Abbott’s words from a news conference after the Uvalde shooting end the ad: “It could have been worse.”

O’Rourke’s campaign denied any knowledge of who’s behind Coulda Been Worse and said there’s been no contact with the LLC.

“Beto has previously said these kinds of groups should be required to disclose their donors, and it is still the case,” said spokesman Chris Evans.

Abbott’s campaign has panned the ads as “garbage” and ineffective.

“They spent $12 million and didn’t move the needle,” Abbott political strategist Dave Carney said last month.

Coulda Been Worse has taken several steps that indicate a desire to stay out of the public eye.

Many dark money groups form as nonprofits, meaning they must file public tax returns that reveal their board of directors. Coulda Been Worse, though, was set up as an LLC in Delaware, where such information can be shielded from view.

“What they sacrifice in taxes, they make up for in not having public information out there,” said Andrew Cates, an Austin attorney who specializes in Texas ethics law.

On formation papers filed on Aug. 23, Coulda Been Worse listed Wilmington-based Corporation Service Co. as its registered agent. A woman who answered the phone this week at a number listed for the company said she could not give out client information.

Coulda Been Worse has used Connecticut-based “Icon International” to buy ads, according to paperwork filed with the Federal Communications Commission. Icon did not respond to emailed questions about the group.

A website and YouTube page for Coulda Been Worse displays a single ad, and offers up no other information.

Most political spending must be reported to the Texas Ethics Commission, but experts say Coulda Been Worse appears to have taken steps to try and avoid it.

Under Texas election rules, spending on an ad must be reported if it costs more than $140, is run within 30 days of an election, includes a candidate’s likeness and leaves voters with “no other reasonable interpretation than to urge the election or defeat of the candidate.”

While Coulda Been Worse’s earlier ads named and pictured all three top GOP statewide candidates, the group has dropped those explicit references in spots aired within recent weeks, according to AdImpact.

By late last month, a 30-second spot that began airing on Oct. 25 showed no photos of Abbott, Patrick or Paxton. Nor did the narrator mention their names or positions. However, with similar black-and-white images as earlier ads had, plus the steady sound of the one piano note playing in the background, the spot jibed in feel and themes with the group’s earlier commercials.

A 30-second spot aimed just at Paxton, which the group launched in mid-October, relied solely on the viewer’s awareness of Paxton’s legal troubles for it to be recognized as a hit on the sitting attorney general. The group has spent $1.55 million running the spot, according to AdImpact.

Cates said Coulda Been Worse would have to report that spending to the ethics commission because it is “clearly targeting Paxton.” Clancy said the ad is close to the line.

None of the ads carries a disclaimer that labels the message political advertising. Instead, they simply end with: “Paid for by Coulda Been Worse, LLC.”

It’s not clear whether anyone has filed a complaint against the group.

Texas Ethics Commission Executive Director J.R. Johnson said state law requires the commission to conduct investigations confidentiality.

“The Commission does not comment on, or confirm or deny the existence of, pending investigations,” Johnson said in a written statement.


 

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