July 11 (Bloomberg) -- In the midst of California's 2001 electricity crisis, a group called the American Taxpayers Alliance ran a television ad in the state accusing then-Governor Gray Davis of ``pointing fingers and blaming others'' for shortages that sent prices shooting up as much as 10-fold.

What wasn't known at the time was that 61 percent of the group's budget that year came from Houston-based Reliant Energy Inc., which owns power plants in 12 states -- and agreed in 2005 to pay $453 million to settle claims that it manipulated energy prices in California.

Reliant, Intuit Inc. and Pfizer Inc. are among companies that increased their lobbying and other efforts to influence public officials by funding nonprofit groups to promote corporate goals without publicly disclosing backers. Intuit, which makes tax-preparation software, was the top donor to a group seeking a new tax break for health-care costs. Pfizer, the world's biggest drugmaker, funded groups backing a Medicare prescription-drug plan.

The donations ``appear to be in clear evasion of the intent of lobbying disclosure laws, even if they are legal,'' said Taylor Lincoln, a researcher at Washington-based Public Citizen, which lobbies for more disclosure of corporate spending on politics.

Companies sometimes give more money to nonprofit advocacy groups than they spend on direct lobbying of the government, which is publicly disclosed. Advocacy groups are facing increased scrutiny after a June 22 U.S. Senate report said Republican lobbyist Jack Abramoff, who has pleaded guilty to criminal charges, laundered funds through such organizations.

`Pass-Throughs'

``Abramoff's use of nonprofits as pass-throughs provides a textbook example of the way they can be used for nefarious purposes,'' Lincoln said.

Unlike charities, nonprofit groups like those funded by Reliant, Intuit and Pfizer can legally engage in lobbying and can air political ads that don't advocate the election or defeat of a candidate. The groups aren't required to report their financial backers except on their annual tax returns.

Bloomberg News obtained lists of donors to nonprofits from state regulators, who often receive copies of the groups' tax returns. Donations to these organizations, which are known as 501(c)(4) groups after the section of U.S. tax code under which they operate, aren't tax-deductible.

Abramoff used such groups as pass-throughs for his lobbying efforts on behalf of Indian tribes, funneling at least $325,000 through one advocacy nonprofit, the Washington-based Americans for Tax Reform, according to the Senate report. The group has denied wrongdoing.

Lobby Proposal

Representative Christopher Shays, a Connecticut Republican who last month introduced a measure to require lobbyists to disclose more sources of their funding, said nonprofit advocacy groups should do the same. ``All of these people should have to disclose. We should know who they are, who funds them,'' he said in an interview.

Reliant donated $1.97 million in 2001 to the American Taxpayers Alliance, which had a budget of $3.2 million that year, according to the group's tax return. Davis unsuccessfully sued the alliance in 2001 in an effort to force it to reveal its donors.

Reliant's donation was more than four times the $340,000 the company, then known as Reliant Resources Inc., reported spending on direct lobbying of the federal government that year.

The 2005 civil settlement resolved claims against Reliant by the states of California, Washington and Oregon, and three utilities. The U.S. is seeking as much as $64 million on criminal allegations that Reliant manipulated energy prices. The company has said its actions were legal.

`Critical Step Forward'

In a statement, Reliant spokeswoman Patricia Hammond didn't comment on the company's relationship to the taxpayers' alliance. She said that last year's settlement was a ``critical step forward'' and that the company was working to meet California's energy needs. Officials for the Washington-based American Taxpayers Alliance didn't return repeated phone calls seeking comment.

Intuit, maker of Turbotax tax-preparation software, gave $858,644 in 2003 and 2004 to CapitolWatch, a group that lobbied during that period for making all medical costs tax-deductible. Only 5 percent of taxpayers claim deductions for medical expenses, CapitolWatch said in 2004.

Intuit's contributions accounted for more than one-fifth of CapitolWatch's budget for those two years, according to tax records of the Great Falls, Virginia-based group. Intuit, based in Mountain View, California, reported spending $1.1 million to lobby Congress and the federal government during 2003-04.

Former President

One of Intuit's lobbyists in Washington, Robb Watters, is a former president of CapitolWatch. The group says on its Web site that it defends taxpayers from ``ineffective government and wasteful spending.''

Intuit spokeswoman Diane Carlini said in a statement that the company's donations to CapitolWatch are ``not for lobbying, but to be supportive of their public education mission related to wasteful government spending.'' Edward Anfinson, chief financial officer of CapitolWatch, said the official authorized to speak for his group wasn't available to comment.

Pfizer gave $145,000 in 2000 and 2001 to the 60-Plus Association and United Seniors Association, tax records show. The two groups paid for ads in 2002 supporting Republicans who backed the proposed Medicare prescription drug benefit, enacted the following year. One was Representative Nancy Johnson, 71, of Connecticut, according to a study of the campaign by University of Connecticut professor Sarah Morehouse and researcher Sandra Anglund.

Opposed Clinton Plan

Earlier, the 60-Plus and United Seniors groups joined an organization called Citizens for Better Medicare. In 1999 and 2000 it aired ads in western states opposing then-President Bill Clinton's proposed drug benefit, which would have been run by Medicare rather than by insurers and health-maintenance organizations, according to Public Citizen.

The drug industry's trade organization, Washington-based Pharmaceutical Research and Manufacturers of America, of which Pfizer is a member, gave at least $1.56 million to 60-Plus and United Seniors in 2001 and 2002, tax records show. The donations by Pfizer and the trade group were first made public in 2004 by a newsletter of AARP, the Washington-based senior-citizens' advocacy group.

Pfizer spokeswoman Darlene Taylor said in a statement that the New York-based company ``complies fully with all federal, state, and local laws and reporting requirements.'' The company's Web site lists its political contributions that are publicly available through reports to the Federal Election Commission. It doesn't mention donations to nonprofit groups like the 60-Plus Association and United Seniors.

Ed Fulginiti, a spokesman for Arlington, Virginia-based 60- Plus, said in a statement his group doesn't reveal the names of its more than 1 million donors, whose gifts averaged less than $20. Charles Jarvis, chief executive officer of United Seniors, based in Fairfax, Virginia, wasn't available for comment.

To contact the reporter on this story: Michael Forsythe in Washington at mforsythe@bloomberg.net.

Last Updated: July 11, 2006 00:02 EDT