The Alabama Association For Higher Education might be the most powerful force in Alabama politics that no one has ever heard of.

Established and managed by current and former University of Alabama System officials including Chancellor Robert E. Witt, the association operates outside public view as a "dark money" nonprofit organization.

By funneling more than $1.4 million through the group since its founding in 2014, the nonprofit UA System has been able to influence state government without illegally donating directly to political candidates or having to report its spending on campaign finance disclosures.

Some experts say the approach is prohibited by the IRS, which enforces strict limitations on nonprofits' involvement in politics. But by tapping the potential of dark money, the university system - which gets its funding from tuition and fees, state appropriations, grants and other sources - and the powerful Board of Trustees at its helm are keeping pace with a rapidly evolving campaign finance landscape.

It's an approach that experts describe as either unique among the nation's universities or the local representation of a growing but unnoticed national trend.

An AL.com investigation into the pioneering strategies of the UA System has yielded a detailed portrait of the complex financial web the system has established to make its influence felt in Montgomery.

'Absolutely prohibited'

Between April 2014 and December 2015, the Alabama Association For Higher Education, or AAFHE, poured more than half a million dollars into state political action committees with close ties to the UA System's leadership, state campaign finance records show.

Those committees, known as PACs, have gone on to make hundreds of thousands of dollars in campaign contributions, dividing the funds between dozens of state political candidates, including Gov. Robert Bentley, Senate President Pro Tem Del Marsh and then-House Speaker Mike Hubbard.

But the connection between the UA System and those politicians has remained largely under the radar because dark money groups like the AAFHE obscure political spending in ways that no other legal monetary pipeline can.

Because it is a tax-exempt 501(c)(3) nonprofit, the UA System is "absolutely prohibited" by the IRS from making contributions to political campaigns. The IRS can impose punishments including "denial or revocation of tax-exempt status and the imposition of certain excise taxes" on 501(c)(3) groups that violate that prohibition.

UA System spokeswoman Kellee Reinhart said via email that the AAFHE "makes independent decisions about expending resources" and that the UA System is simply one of its "numerous" members.

"[W]e are not using AAFHE to make campaign donations. That organization makes its own decisions about any campaign donations, which such organizations are allowed to make by law," she said. "The UA System's goal as a member is to support the association's advocacy of education issues."

Pete Quist, research director at the National Institute on Money in State Politics, says voters should be concerned about the rise of dark money because it makes the political process more opaque.

Considered the cutting edge of clandestine political advocacy, dark money is a term used to describe funds received and spent by a subset of specialized nonprofit organizations that have become increasingly popular conduits for political money in recent years.

Because they are not subject to some of the strict IRS reporting requirements to which PACs must adhere, dark money groups are attractive to entities that want to anonymously exert political influence.

"It's important to have an informed electorate and a part of having an informed electorate is understanding who's supporting a candidate and who's opposing a candidate," Quist said. "It needs to be transparent. It's important for the public to be able to see the flow of that money."

An innovative approach

Though the AAFHE must report to the IRS the amounts of money it takes in and spends, as a 501(c)(6) - a group governed by section 501(c)(6) of the Internal Revenue Code, which is reserved mainly for business leagues and professional associations - it is not required to publicly disclose the identities of its donors. That makes it difficult to determine how the association is funded and how it spends its money.

The stated purpose of the Tuscaloosa-based group is "promoting common business interests of all nonprofit institutions of higher learning in the state of Alabama along with their respective affiliated organizations in the health care, research and service sectors," according to its IRS filings.

But campaign finance records show that since its 2014 founding the AAFHE has donated $541,000 to a single entity, Innovation PAC, which has connections to the university and appears to exist for the sole purpose of contributing money to state political candidates.

William R. Jones, a former UA system lobbyist who helped launch the AAFHE - which reported to the IRS last year that it paid him $32,500 to serve as its president - registered Innovation PAC in April 2014.

As a political action committee, Innovation PAC is required to disclose to the government more information about its finances and activities than is required of dark money groups like the AAFHE.

Innovation PAC's detailed state campaign finance filings reveal that the AAFHE gave the PAC every penny it has ever received.

Between its founding and Dec. 9, 2015, Innovation PAC made more than $300,000 in political contributions to dozens of mostly Republican state political candidates. Recipients of Innovation PAC's money include top state leaders like Bentley ($15,000), Marsh ($20,000) and Hubbard ($20,000), and lower-level politicians like state Sen. Gerald Allen ($15,000), state Sen. Paul Bussman ($15,000) and state Rep. William J. Ainsworth ($2,500.)

Jones and multiple other representatives of the AAFHE and Innovation PAC declined to respond to repeated requests to provide comment for this story, and AL.com was turned away from the AAFHE's Tuscaloosa offices last month without being granted an interview. But Reinhart offered an explanation of why the group was created.

"In the aftermath of recent turmoil surrounding the Alabama Education Association and repeated efforts in the past few years by some state leaders to take money from education to spend on other state services, AAFHE was founded to promote the interests of all non-profit higher education institutions and their affiliates, including the protection of the Education Trust Fund from further raids," she said via email.

The UA System and Board of Trustees for years relied on the unrivaled might of the Alabama Education Association (AEA) as a wellspring of political support. But a series of major setbacks in recent years has largely neutered the AEA, leaving state education funding levels and the university system's interests increasingly exposed to the political winds.

In the wake of the AEA's decline and the introduction in 2014 of unsuccessful state legislation aimed at reforming the Board of Trustees and injecting sunlight into its affairs, UA System leaders have turned to the complex web of organizations typified by the AAFHE and Innovation PAC to help advance the system's political goals.

University of Alabama Chancellor Robert E. Witt. (AP Photo/Rob Carr)

'A close relationship'

On Feb. 11, 2014, Witt, the UA System chancellor, joined forces with Jones, the former system lobbyist who once served as its director of governmental relations, to launch the AAFHE.

By October of the following year, the UA System had made three payments totaling $1,456,500 to the little-known group, university records show. That amounts to more than 95 percent of the $1,529,600 in total revenue the association has reported receiving to date, according to its IRS filings, known as 990s.

Reinhart claimed via email that the system's payments to the AAFHE are membership dues, and that they only "comprise less than half of the revenue generated by AAFHE." That assertion relies on an assumption that the AAFHE has yet to inform the IRS of its most recent payment to the group - which was for $744,000 and is dated Sept. 18, 2015, in UA spending records - because the university system's fiscal year ends a month after the AAFHE's.

"The UA System's recent payment of $744,000 that you reference below is for AAFHE's FY 2015 and will be reported on the next 990 along with its other revenue," Reinhart said.

She did not respond to questions about how she has knowledge of the AAFHE's financial practices, nor did she provide AL.com with any additional documentation to substantiate the claim.

Reinhart stated that in addition to the UA System, nine "four-year public universities and affiliated organizations in the health care research and service sectors" are dues-paying members of the association. But spending records show that no public university in Alabama has reported paying the AAFHE more than $800, and she declined to identify any of the other nine members of the group or specify which "affiliated organizations" supposedly contributed more than $700,000 to it.

"The University of Alabama System made the decision to pay dues to AAFHE because AAFHE has advocated on issues of importance to our campuses, their affiliates, and the UAB Health System," Reinhart said.

She confirmed that the UA System has contributed more than $1.4 million to the AAFHE since 2014, defending the payments as beneficial to the system's interests.

"The University of Alabama System has a close relationship with AAFHE as a founding member," Reinhart said. "We are actively involved in the association's efforts to support higher education in Alabama."

A national trend

The advent of the AAFHE is a state-level outgrowth of one of the biggest shifts in U.S. campaign finance since 2010, when the monumental Citizens United v. Federal Election Commission ruling changed the rules of the game. The U.S. Supreme Court held in Citizens United that the government could not limit independent political spending by nonprofit corporations.

That key ruling led to a boom in Super PACs, which came to define the 2012 federal and state elections as they poured millions into elections across the nation. But these groups must disclose their donors, making them less than ideal for image-sensitive groups and individuals that want to avoid public scrutiny.

And so recent years have seen the rise of dark money organizations in the American political process. Typically classified by the IRS under either sections 501(c)(4) or 501(c)(6) of the Internal Revenue Code, these nonprofits must adhere to more stringent rules about what kinds of activities they can undertake, but they are not required to reveal who gives them money.

The number of dark money groups is swiftly growing nationwide, as political operators, corporations and other stakeholders realize that they can be used to anonymously influence the political process.

The emergence of 501(c)(6)s like the AAFHE has lagged behind the popularity of dark money groups bearing the 501(c)(4) classification, defined by the IRS as "social welfare organizations."

A 2015 study by the Center for Association Leadership found that as of 2013, there were more than 90,000 501(c)(4)s. There were less than 67,000 501(c)(6)s at the time, a number that also includes tens of thousands of long-standing chambers of commerce, trade associations and professional societies.

But the study reported that there were more than 1,500 new applications for 501(c)(6) status in 2013 alone. Data provided to AL.com by the campaign finance nonprofit MapLight, which tracks dark money, show that the ranks of the class have only continued to grow, with the IRS first recognizing the 501(c)(6) status of more than 5,000 groups since 2013.

Of the tens of thousands of 501(c)(6)s that operate in the U.S., about 1,400 have the words "university," "college" or "education" in their names, according to the MapLight data. But most of these groups do not represent the interests of a whole university system or college. Instead, they serve more specific constituencies, like the alumni of a specific school or members of an education-related professional association.

Quist, the campaign finance researcher, said that before being made aware of the UA System's arrangement, he had never heard of a university system, university or college establishing and directly funding a closely affiliated 501(c)(6) that makes significant monetary contributions to a PAC. But he said that an unknown number of university systems and institutions of higher education in other parts of the country have likely set up similar arrangements that the public is not yet aware of.

"This is the first time I've heard of it, personally," he said. "I don't want to say it's not happening [elsewhere], because it almost certainly is."