THE RISE OF DARK MONEY IN CAMPAIGNS

ABSTRACT: An increasing amount and proportion of election spending is coming from non-profit organizations that do not disclose their donors. This so-called “dark money” keeps voters in the dark about who is trying to influence their votes. Legislation to require disclosure of donors to “dark money” groups has been introduced at the federal level and in a number of state legislatures.

We need Representatives and Senators in Congress who will reform our campaign finance system. Ironically, there is a super PAC being formed to elect Congress people who will reform our campaign finance system. I urge you to join this effort now. Please go to the MAYDAY Super PAC site (https://mayday.us/old) to participate.

FULL POST: An increasing amount and proportion of election spending is coming from non-profit organizations that do not disclose their donors. They claim to be social welfare organizations [501(c)(4)s] or professional trade associations [501(c)(6)s] despite spending millions of dollars on political activity. [1] This so-called “dark money” keeps voters in the dark about who is trying to influence their votes.

In the 2014 election cycle to-date, three times as much dark money has been spent as had been spent at this point in 2012, even though that was a presidential election year. Furthermore, 2014 dark money spending to-date is almost 20 times that of the last mid-term election in 2010. [2] If the 2014 spending pattern is the same as in 2010, over $400 million of dark money will be spent by election day.

So far in the 2014 election cycle for the US Senate, groups outside and supposedly independent of candidates’ campaigns, are responsible for 59% of the TV ads aired, a big increase from 2012. More than half of those ads have been paid for by “dark money” groups that don’t disclose their donors. [3]

Legislation to require disclosure of donors to “dark money” groups has been introduced at the federal level and in a number of state legislatures. The federal DISCLOSE Act was filibustered in the US Senate in September 2010. (There were 59 votes in favor, a clear majority, but one short of the 60 needed to overcome the filibuster.) A new version of the bill was introduced in 2012 but is stalled in the Senate.

In Massachusetts, and in some other states as well, legislation is progressing that would increase the disclosure of donors to political spending and the timeliness with which it must occur. The MA law would require disclosure of all donors promptly, before the election, so voters would know who was trying to influence their votes. [4] (If you live in Massachusetts, now would be a good time to call your legislators and urge them to support the timely disclosure of contributors to political spending). Super PACs are already running ads focused on the November election for Massachusetts’ Governor. [5] And in last year’s contest for Mayor in Boston, organizations independent of the candidates’ campaigns spent over $3.8 million, much of it dark money. This spending was more than two-thirds as much as the campaigns of the two finalists spent on their own ($5.4 million). [6]

The use of dark money is growing in part because wealthy individuals’ millions of dollars of campaign spending is receiving increased attention. Many of these wealthy individuals prefer to remain anonymous and therefore prefer to channel their exorbitant campaign spending through groups that do not report their donors. [7] Corporations similarly prefer to remain anonymous when they engage in political spending. So they are channeling their contributions through dark money groups as well. [8]

The Open Secrets project of the Center for Responsive Politics (http://www.opensecrets.org/) has been digging into the money spent in the 2012 campaigns by Super PACs and non-profit organizations. It has now documented a web of over a dozen such organizations that transferred money among themselves. This served to hide the true sources of campaign spending, delay any reporting of it, and circumvent IRS limits on political activity by non-profit, tax exempt organizations. [9] (See my post of 2/28/14 for more details.)

We need Representatives and Senators in Congress who will reform our campaign finance system to:

  • Require timely reporting of all political spending and contributors, so voters know before they vote who is spending money to influence their votes;
  • Severely limit political activity by non-profit, tax exempt organizations; and
  • Improve enforcement of existing campaign finance laws.

Ironically, there is a super PAC being formed to elect Congress people who will reform our campaign finance system. I urge you to join this effort now, as there is a July 4th deadline for raising $5 million to get this effort off the ground. Please go to the MAYDAY Super PAC site (https://mayday.us/old) to participate. If you’d like to make a contribution or pledge to this effort, you can do so through my pledge page at: https://my.mayday.us/t/35e1-John-Lippitt#_=_. (See my post of 6/10/14 for more information on the MAYDAY Super PAC.)

[1]       Center for Responsive Politics, 4/30/14, “OpenSecrets.org provides testimony, data for Senate Rules hearing on dark money,” https://www.opensecrets.org/news/2014/04/opensecrets-org-provides-testimony-data-for-senate-rules-hearing-on-dark-money/

[2]       Maguire, R., 4/30/14, “How 2014 is shaping up to be the darkest money election to date,” https://www.opensecrets.org/news/2014/04/how-2014-is-shaping-up-to-be-the-darkest-money-election-to-date/

[3]       Center for Responsive Politics, 4/30/14, see above

[4]       Phillips, F., 6/18/14, “Bill would increase super PAC disclosures,” The Boston Globe

[5]       Miller, J., 4/28/14, “Super PAC launches ads against Charlie Baker, Common Cause decries outside spending,” The Boston Globe

[6]       McMorrow, P., 11/12/13, “Citizens United comes to local races,” The Boston Globe

[7]       Gold, M., 5/30/14, “Attacks drive GOP donors to stealth nonprofits,” The Boston Globe from The Washington Post

[8]       Lessig, L., 6//4/14, “What’s so bad about a Super PAC?” https://medium.com/law-of-the-land/whats-so-bad-about-a-superpac-c7cbcf617b58

[9]       Maguire, R., 12/3/13, “At least 1 in 4 dark money dollars in 2012 had Koch links,” OpenSecretsblog (http://www.opensecrets.org/news/2013/12/1-in-4-dark-money-dollars-in-2012-c.html)

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