Update: The group that received the donation has identified the mystery donor as a former Bain employee. The AP reports:

Former Bain Capital executive Edward Conrad gave the donation to the Romney-leaning Restore Our Future PAC, the group said Saturday. Romney co-founded Bain in 1984.

In a move one campaign-finance expert described as a way to make a political donation “so it’s harder to trace where the money comes from,” a mysterious corporation created earlier this year in New York donated $1 million to a pro-Romney political group before quickly dissolving itself.

The Associated Press reports that a corporation known only as W Spann, LLC. was created on March 15th by Cameron Casey, a lawyer at the Boston law firm Ropes & Gray. According to the firm’s website, Casey “counsels private clients regarding the creation and administration of tax-exempt charitable giving vehicles” and “develops wealth transfer strategies for private clients.” On April 28th, W Spann transferred the $1 million to a pro-Romney group, Restore Our PAC, and on July 12th it dissolved itself.

As part of federal campaign finance regulations, W Spann was required to disclose their corporate address when they donated to the political committee. They claimed they were headquartered at 590 Madison Avenue, in midtown Manhattan. But the manager of that building has no record of W Spann LLC. The building is home to many other wealthy and influential corporations, though, including industrial conglomerates IBM and Cemex, and financial firms UBS, Morgan Stanley Smith Barney, and Bank of America.

590 Madison is also the New York headquarters of Bain Capital, the powerful consulting firm once headed by Mitt Romney. Attempting to defuse speculation that Bain or one of its employees was involved in the mysterious million-dollar donation, Bain released a statement claiming that “the firm takes no position on any candidate, and the entity in question is not affiliated with Bain Capital or any of our employees.” It added that the firm “has many employees who actively participate in civic affairs, and they individually support candidates from both parties.”

Restore Our Future is a so-called “independent-expenditure only political action committee,” or “Super PAC,” that has raised $12 million. A super PAC, according to Michael Beckel, who tracks the money used in politics at the Center for Responsive Politics, is a new kind of committee that can accept unlimited donations from individuals and corporations as long as it follows two rules. First, says, Beckel, “it has to disclose where the money comes from.” Also, “it can’t donate money directly to candidates.” Instead it has to make “independent expenditures,” usually television advertisements in favor or opposed to candidates. Legally, these independent expenditures must be “uncoordinated” with the candidate’s campaign, meaning they can’t cooperate with the campaign on any advertisements or campaign expenses.

In 2010, the Supreme Court ruled in a case known as Citizens United v FEC that corporations should be free to donate to political campaigns. In another case known as SpeechNOW.org v FEC, the Court ruled that as long as political action committees were independent of political campaigns, they should not be subject to campaign finance restrictions. Federal law limits how much individuals can give to campaigns, but the Court reasoned that political action committees were just groups of citizens interested in politics, not political campaigns, so they should be able to accept unlimited amounts of money from people. When you combine the two decisions, you get a world in which corporations are allowed to make unlimited donations to Super PACs, the committees that promise not to work directly with campaigns.

In reality, the lack of coordination between campaigns and Super PACs is mostly a legal fiction. Last month, the treasurer of Restore Our Future PAC, Carl Forti, admitted to the Washington Post that “this is an independent effort focused on getting Romney elected president.” Forti also serves as political director of American Crossroads, a Super PAC founded by Republican strategist Karl Rove.

Even so, corporations and individuals are legally allowed to make unlimited donations to Super PACs as long as they don’t technically “coordinate” with campaigns. So why go through all the trouble of setting up a shell corporation like W Spann to make a legal donation? Beckel thinks it’s all about disclosure. Thanks to Citizens United and SpeechNow.org, donors are allowed to give as much money as they want to Super PACs, but they are not allowed to hide their identities. At least for now, the Supreme Court insists that they disclose who they are whenever they make political donations. The creation of W Spann seems to Beckel to be “a way to make a donation so it’s harder to make trace where the money comes from.” Whoever donated the million dollars in support of Romney wanted to make sure the public never found out their true identity, despite the fact the law requires otherwise.