How realistic is House of Cards? | POLITICO Screen grab What 'House of Cards' gets wrong

Spoiler Alert : This story contains some critical details from the second season of House of Cards. We’ve tried to keep them at a minimum and we’ve definitely avoided spoiling the big reveals at the end of the season.

How realistic is House of Cards? Star Kevin Spacey said this week that the show’s political story arcs “ are not that crazy.”


But when it comes to accurately depicting the ebb and flow of money in politics, the Netflix hit drama gets two thumbs down.

A major plot point in the second season involves a fanciful foreign conspiracy to funnel Chinese money into U.S. elections through a U.S.-based casino operator on behalf of a wealthy industrialist. The newly installed Democratic Vice President Frank Underwood, played by Spacey, gets wind of the spending and dispatched a top lieutenant to stop the tide of cash.

( Also on POLITICO: Spacey on pols: 'I don't believe them')

The spending turns out to be the work of energy magnate Raymond Tusk. Slighted by Underwood’s efforts to drive a wedge between him and President Garrett Walker, Tusk has orchestrated a shadowy super PAC-based ad campaign against congressional Democrats in the run-up to the midterm elections.

Sure, concessions have to be made to drama, but for a show that appeals to the D.C. crowd, that crowd is going to notice all the little things.

So what are the problems? Here’s a rundown:

1) $25 million is chump change

In the show, Underwood, Walker, and other Democratic leaders huddle in the Oval Office — watching a clip from a mysterious ad backed by $25 million in super PAC money. They tell Walker that they won’t know who is paying for the ads until the next round of campaign finance filings, and the Democrats wonder about the source of the cash.

“With this sort of influence, you can be sure somebody’s not playing by the rules,” Underwood says, before offering to find the source of the cash and cut it off.

( Also on POLITICO: Spacey: 'House of Cards' not far from reality)

While sizable, a $25 million ad campaign is hardly a game-changer, even in a midterm election. And plenty of individual wealthy donors will spend that much on political activity in a cycle — all entirely within the law and above board.

In the real world, billionaire Democratic venture capitalist Tom Steyer has vowed to pour $100 million into the 2014 campaign on behalf of climate issues. On the other side, GOP donors like Paul Singer and others have gathered to plot a big money strategy for the Republican Party. The network founded by industrialist brothers Charles and David Koch is hammering Senate Democrats. Labor groups alone put $20 million into New Jersey state legislative elections in 2013. And three donor gave eight figure checks of $22.5 million, $18 million and $10 million to Karl Rove’s Crossroads network in 2012.

2) A super PAC was the wrong choice

Why even use a super PAC for the ad campaign? There are better options to move shadowy, anonymous money around. Namely, a 501(c)4 nonprofit.

“If you’re going to funnel foreign money into an election, put it into a trade association or 501(c)4 that doesn’t have to disclose its donors,” said Adam Smith, communications director of the group Public Campaign. “If getting it to the super PAC is that important, just have the 501(c)4 make the donation.”

These nonprofits are not required to disclose their donors.Better yet, they don’t have to disclose anything about their spending until more than a year after election day.

( Also on POLITICO: Underwood's Clinton advice: Run)

The Tusk plot to funnel Chinese money into a campaign would have been much more effectively done through a nonprofit than a super PAC. And the cash and spending would have been much harder to track for nosy journalists and political operatives.

3) Tusk didn’t need a network of foreign donors to hide his influence peddling

In the show, Tusk is a wealthy energy bigwig — the kind that, in real life, contributes heavily to campaigns and candidates. He’s an amalgamation of real-life donors like the Kochs, Las Vegas casino magnate Sheldon Adelson and Warren Buffett — the Berkshire Hathaway head who is close to President Barack Obama.

“He doesn’t make political contributions. That’s how he remains flexible,” says Underwood about Tusk.

“You think he’s funneling the money somehow?” a Democratic operative replies, before Underwood sends a henchmen to find out for certain .

But there’s no need for Tusk to create a shadowy network of Chinese donors to spend money to influence U.S. elections.

If he wanted to be anonymous but still wield enormous influence, the status quo allows him to donate directly and anonymously to nonprofits.

“One of the threads in the story line is that they’re pouring over disclosure records from the super PAC,” said Paul S. Ryan, senior counsel at the nonpartisan Campaign Legal Center. “The players here could have avoided all of that.”

4) Shell corporations would be less risky

It’s probably still illegal, but using shell corporations would be an easier way to launder foreign money. Tusk didn’t need to enlist the help of casino owner Dan Lanagin to get foreign money into the elections.

In the House of Cards plot, Chinese visitors working for Tusk and his Chinese business partner gamble at Lanagin’s casino. “Word is they throw away millions,” said one operative about the scheme. Lanagin then moves their money to the super PAC as a political donation. Their plot left a paper trail of airline flights, security camera footage and casino employees in on the scam.

Instead, a simpler method would have been to set up a shell corporation. The corporation could be incorporated in the United States and would appear to either the IRS or the Federal Election Commission as a legitimate enterprise. Because the 2010 Citizens United v. FEC decision legalized corporate donations in politics, corporations can give directly to super PACs and nonprofits.

And, in the real world, this has happened. A company called W Spann LLC formed in 2012, gave $1 million to a pro-Mitt Romney super PAC and then dissolved. Amid questions about the legality of that donation, Bain Capital executive Edward Conard came forward as the donor behind the corporation.

But if that money was given to a nonprofit, it might escape the IRS’s attention — and look like a totally legitimate donation on a 501(c)4’s tax forms. A tax attorney and former IRS official told Mother Jones in 2012 that it was not the IRS’ policy to uncover the origin of shell corporations.

5) Not all foreign money is illegal

Federal law strictly bans foreign individuals from contributing to campaigns or directly participating in elections. But there are some gray areas. And the plot depicted in House of Cards is not necessarily illegal just because its foreign-backed money.

For example, Ryan of the Campaign Legal Center says that the FEC has never really grappled with the issue of foreign-owned corporations donating or participating in elections — only corporate PACs and foreign individuals.

And the restrictions on foreign participation only applies to ads that expressly mention federal candidates. The FEC ruled, for example, that a foreign national could fund an issue campaign that dealt with liberal media bias.

In House of Cards, the ad campaign that Tusk, Lanagin and the Chinese straw donors launch is explicitly identified as an “issue ad” by the Democratic whip. They don’t mention a federal candidate — though they do encourage voters to “send a message” at the midterm elections which could be interpreted as a political ad.

But a more subtle ad campaign could — in theory — be legally paid for with foreign money.