- Associated Press - Saturday, March 22, 2014

RICHMOND, Va. (AP) - In the fight over Medicaid expansion in Virginia - a debate that could lead to a state government shutdown - two of the groups leading public relations efforts on both sides are opaquely funded nonprofits with ties to wealthy out-of-state activists.

Helping make the case against Medicaid expansion is Americans for Prosperity, a nonprofit tea party group backed by billionaire oil magnates David and Charles Koch. A leading message-shaping group in support of Medicaid expansion is ProgressVa, a subsidiary of a liberal group that began more than a decade ago in Colorado and has links to several rich liberal activists.

As nonprofits designated as “social welfare” organizations by the IRS - also known as a 501(c)4s - both groups can operate without detailing their donors.

“Like virtually every other 501(c)4 organization across the political spectrum, ProgressVA protects our donors by not disclosing their names,” said Anna Scholl, executive director of ProgressVa.

Nor do the groups have to disclose how much they are spending on their respective efforts in Virginia.

That bothers some elected officials.

“If they are going to participate in policy issues, they should be required to say who they are, and who their donors are,” said Sen. John Watkins, one of three Republican senators who supports expanding Medicaid eligibility. “What’s at stake is the ability of the public to understand where these points of view are coming from.”

Lawmakers adjourned from their regular legislative session earlier this month without passing a roughly $96 billion biennial budget. Gov. Terry McAuliffe and the Democratically controlled Senate want a version of Medicaid expansion that emphasizes the use of private insurers in the state budget. The GOP-controlled House opposes Medicaid expansion, whatever its form.

McAuliffe had made expanding Medicaid a key legislative goal of his new administration and has said the state, and rural hospitals in particular, cannot afford to forgo $5 million a day in federal funding. Under the Affordable Care Act, the federal government has pledged to cover the bulk of an expanded Medicaid program.

But House Republicans have argued that the state’s current Medicaid is already too costly and growing unsustainably. They have also pointed to the flawed rollout of the new health care law as a sign that Virginia should be weary of enacting one of its key provisions.

A special session is set to start Monday, but there’s been no sign the two sides are close to a compromise. Without a budget in place by July 1, state agencies won’t have funds to operate.

In recent weeks, Americans for Prosperity has run state-wide radio ads and organized small rallies around the state against Medicaid expansion.

At a rally earlier this year at the Capitol, AFP President Tim Phillips said his group was going to make sure that House Republicans “keep their word” and maintain their opposition Medicaid expansion.

“We’re going to trust but verify,” said Phillips.

Sen. Emmett Hanger, an Augusta Republican, said Americans For Prosperity sent “slick” campaign-style mailers to his constituents last year urging them to call Hanger and tell him to reconsider his support for expanded Medicaid eligibility. Hanger said he felt like he has been attacked by “carpetbaggers and big-money interests from out of state.”

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