Fredreka Schouten and Mary Troyan

USA TODAY

WASHINGTON — The Alabama political scandal that has cost the state’s governor his marriage and now threatens his job has thrust politicians’ growing use of often-secretly funded nonprofits into the spotlight.

Gov. Robert Bentley’s former aides created the tax-exempt Alabama Council for Excellent Government last year to promote the governor’s agenda, but some of its funds went to pay the governor’s senior political adviser, exposed in recent weeks as his extramarital love interest. And like any other "social-welfare” group created under the 501(c)(4) section of the tax code, it does not have to disclose its donors.

Nonprofit groups have become a fixture in federal politics, allowing secret donors to pump unlimited sums into advertising and get-out-the-vote efforts in elections. But their use has spread rapidly to statehouses from Lansing, Mich., to Nashville, Tenn., and city halls from New York to Los Angeles, as another source of cash that elected officials of both parties can tap to help shape public policy.

Elected officials defend their use, saying nonprofits can move more nimbly than government agencies to advance civic initiatives and are less likely to draw the public’s ire over using taxpayer funds for pet projects or quasi-political expenses, such as polling. Campaign-finance watchdogs, however, said they are just another way for unregulated money to seep into the political process and give big donors a back-door method to curry favor with decision makers.

The "c4 world was created for social-welfare opportunities, to help hospitals and food banks and the like provide services to people,” said Edwin Bender, an expert on campaign money who runs the National Institute on Money in State Politics in Helena, Mont. "The fact they have morphed into political slush funds is certainly against the spirit of the (tax) code.”

In Michigan, a tax-exempt group operated by Gov. Rick Snyder’s supporters is helping to underwrite the Republican’s public relations campaign to cope with the Flint water contamination crisis. The group, Moving Michigan Forward, discloses its donors and reported taking in nearly $300,000 during the first three months of this year. Most of the money came from another Snyder-linked non-profit, Making Government Accountable. That group does not make its donors’ identities public, said Snyder spokesman Ari Adler.

Asked whether the fundraising gave donors a behind-the-scenes opportunity to build relationships with the governor, Adler said: "You could also look at it, though, that there are people who want to help in Flint and may not necessarily want to be out there cutting a check and making it public because they don’t want the publicity.”

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In Los Angeles, Democratic Mayor Eric Garcetti helped establish a nonprofit, Mayor's Fund for Los Angeles, to raise funds for his initiatives, ranging from a public campaign to encourage city residents to reduce their water usage to a program that keeps parks and recreation centers open after dark during the summer months. It raised $14.6 million in its first full fiscal year, drawing support from philanthropic groups such as the Anheuser-Busch Foundation, to companies such as Goldman Sachs and Paramount Pictures, according to its website.

Garcetti has said he has no control over the fund, which he describes on the website as a public-private partnership that "enables the nimbleness of private enterprise to meet the scale of city government."

This year, allies of another big-city mayor, New York’s Bill de Blasio, began disbanding Campaign for One New York, a nonprofit group created to advance his agenda on issues, such as universal pre-kindergarten. The group, whose donors have included individuals and companies with businesses before the city, had drawn sharp criticism from government watchdogs who claimed it amounted to a shadow government, operating outside of campaign-finance rules that bar corporate donations to mayoral candidates. The group discloses its donors.

The nonprofit now appears to be part of a sprawling federal and state investigation into the Democrat’s fundraising practices. This week, The Wall Street Journal reported that JAD Corporation of America, a company that received a New York City contract to buy its mint-scented garbage bags that repel rodents, received a subpoena from authorities looking into De Blasio’s affairs. The company’s owner, Joseph Dussich, had donated $100,000 to Campaign for One New York.

De Blasio has denied any wrongdoing and has said the nonprofit is shutting down because its work is done. Dussich did not return telephone calls, and an official with the U.S. Attorney's Office of the Southern District of New York declined comment.

In Tennessee, Gov. Bill Haslam’s former campaign manager formed Tennesseans for Student Success in October 2014 to defend Haslam’s education policies, including running ads supporting like-minded legislators. This year, the 501(c)(4) announced it will spend $500,000 on "an aggressive ground, air and data operation to support the policies that have led Tennessee to become the fastest improving state in the nation in education” and hired a field director with experience on state and federal political campaigns. It does not disclose donors.

The practice also has reached the highest levels of government.

In 2013, President Obama became the first sitting president to launch nonprofit advocacy group to lobby for his agenda. The group, Organizing for Action, reported $40.4 million in revenue during its two years of operation, according to its most recent filings with the IRS. The tax-exempt group does not accept corporate money or donations from federal lobbyists and voluntarily discloses all contributions larger than $250 on its website. OFA has advocated for everything from Obama’s push to overhaul the criminal-justice system to urging the Republican-controlled Senate to take action on his Supreme Court nominee, Merrick Garland.

Like Obama, the 501(c)(4) in Alabama promoting Bentley’s agenda was formed at the beginning of his second term, with two of the governor’s former aides listed as incorporators. During the state legislative session that followed in early 2015, the Alabama Council for Excellent Government touted the Republican’s unsuccessful $541 million tax and revenue package.

During that same time, the group paid $15,000 to RCM Communications, a consulting firm run by Rebekah Mason, the adviser now at the heart of the scandal involving the governor. Mason resigned after recordings of their romantic phone conversations became public in March.

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The investigations have just begun into whether the arrangement — having a top adviser to the governor paid by private sources — violated Alabama’s ethics laws. At least two lawsuits are seeking information about the finances of the organization, and some lawmakers are calling for Bentley’s impeachment amid questions about whether state resources were misused.

"Rebekah was paid by a campaign fund that we don’t know who contributed to, and that just don’t pass the smell test,” said state Rep. Jim Patterson, a Republican lawmaker in Alabama who introduced legislation barring anyone paid using undisclosed, private money from working for the state.

Mason herself disclosed the Alabama Council for Excellent Government’s payment to her consulting firm, but the group has not publicly identified any of its donors and has not fully disclosed how it has spent its money. It is run by Bentley’s former legal adviser, Cooper Shattuck, who is now general counsel for the University of Alabama System.

In the wake of the Bentley scandal, Shattuck told USA TODAY that he has contacted the group’s donors and none has agreed to allow their identities to be revealed. The Alabama Council for Excellent Government has not yet filed a tax return with the IRS, but Shattuck said the group has raised about $123,000 and spent almost $81,000 since March 2015.

Shattuck said using a tax-exempt group makes sense because it can "make expenditures that help further a governor's agenda that some feel are more appropriately paid with private funds, such as polling and digital media advertising."