The Washington PostDemocracy Dies in Darkness

How Citizens United is — and isn’t — to blame for the dark money President Obama hates so much

On Barack Obama's 366th day as president in 2010, the Supreme Court decision in Citizens United v. FEC was released, making it substantially easier for corporations and labor unions to spend money on political campaigns. On Tuesday night, five years minus a day since that decision, Obama mentioned campaign spending in his State of the Union address, demanding a "better politics," where "we spend less time drowning in dark money for ads that pull us into the gutter."

This morning, on the actual Citizens United anniversary, he followed that with a public statement. "Five years ago," it reads, "a Supreme Court ruling allowed big companies – including foreign corporations – to spend unlimited amounts of money to influence our elections. The Citizens United decision was wrong, and it has caused real harm to our democracy." After repeating the "gutter" line, he demands: "It’s time to reverse this trend."

There's a lot of rhetoric and confusion about what the Citizens United decision did and didn't do. An anecdote that may help explain:

Several months after the Court's decision, Target got into trouble. The company, freed to spend on political campaigns, did exactly that, giving $150,000 to a political group backing Minnesota's Republican candidate for governor. In addition to being business friendly, that candidate, Tom Emmer, also opposed same-sex marriage, prompting a backlash against the company. Over time, Target apologized and, last year, backed same-sex marriage in a court filing.

In the eyes of critics, Target's problem was that it was supporting a candidate that stood for something they opposed. In the eyes of Target, it's safe to assume, the bigger problem was that people found out.

You probably recall that the IRS offered its own apology last year, to conservative groups that had been isolated for scrutiny by the agency after applying for non-profit status. There's a section of the tax code, section 501(c)(4), that allows for the formation of tax-exempt "social welfare organizations," that are allowed to collect untaxed money and engage in political advocacy without it being their primary mission. Those organizations don't have to report their membership -- meaning that, with some exceptions, they don't have to report who gives them money. Or how they spend said money.

As the 2012 elections approached, the IRS noticed more and more groups applying for 501(c)(4) status that, it suspected, were planning to engage primarily in political activity. It began screening groups using keywords, like "Tea Party," to look more closely at how they were going to use the money they raised -- for which Obama and the IRS have since apologized.

Even prior to Citizens United, money that came from undisclosed sources was on the rise, as data from the Center for Responsive Politics shows.

The difference after Citizens United was that the amount of money spent by 501(c)(4) organizations increased dramatically -- probably in part because corporate groups looking to avoid a Target-style backlash were pouring money into them. We don't know how much that amounts to, of course -- it's undisclosed.

Since 2004, the amount of money from outside groups has grown (size of each circle), and the percent from undisclosed sources (darker slices) has increased as well.

The CRP has a good depiction of how 501(c)(4) spending worked in 2014. Americans for Prosperity, a (c)(4) that's part of the Koch family political network, began running "issue" ads prior to the period in which they'd need to report any advertising that specifically mentioned candidates for office. There's a role for issues-based political outreach: Think of an ad from the ASPCA asking you to call the mayor to preserve the local animal shelter, for example. But the line is very blurry. AFP -- as many groups have before -- ran ads criticizing decisions by elected officials (often, support for Obamacare) and asking viewers to call and complain. It's not saying "don't vote for this person," but it has close to the same effect. For months, ads like that ran from AFP and other groups -- all funded by no-one-knows-who.

That, it is safe to assume, is the dark money that Obama frets "is pulling us into the gutter." The rhetoric is overly strong; the first graph above shows that non-disclosed spending leveled off in 2014. And given how much is spent in total, we're drowning in outside money from disclosed donors far more than from undisclosed ones. But the shift from money being spent in the open by candidates to disclosed and undisclosed money spent by outside groups is very clear, and very much part of the story of the Obama years. The president may not like it and may not want to be associated with it, but it's hard to believe he'll be able to stop it.