A LEGAL battle has usefully pried open a closed door in politics, raising hope of more transparency and accountability. Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia has ruled that shadowy dark-money groups such as Crossroads GPS cannot hide the identity of donors when sizable contributions are made to support independent campaign expenditures, such as advertising. This could close off a major channel of secret cash flowing into American elections.
The judge’s ruling came in response to a complaint brought by Citizens for Responsibility and Ethics in Washington (CREW) and a registered Ohio voter, Nicholas Mezlak. They noted that on Aug. 12, 2012, at an event in Tampa, Karl Rove of Crossroads GPS told attendees about a call he received the previous spring “from an unnamed out-of-state donor” about the 2012 Ohio Senate race between incumbent Democratic Sen. Sherrod Brown and his Republican challenger, Josh Mandel, the Ohio state treasurer. The unidentified donor offered a matching challenge of $3 million and expressed his support for Mr. Mandel. The attendees were solicited for donations. About $1.3 million was raised in the “matching” challenge, and the unnamed donor later contributed a larger amount to Crossroads GPS that was not earmarked. Crossroads GPS reported $6,363,711 in independent expenditures in the 2012 Ohio race opposing Mr. Brown. The big donor remained secret.
Crossroads GPS is one of a number of groups established as nonprofit “social welfare” organizations under the tax code’s section 501(c)4 that are permitted a limited amount of political activity, but are not political action committees. Until now, the groups have been able to operate without disclosing donors. By contrast, full-fledged political action committees, including super PACs that are independent of candidates, must disclose. In 2015, the Federal Election Commission essentially deadlocked over whether the groups such as Crossroads GPS should disclose more. In 2016, CREW went to court, saying the donors in the Tampa case should be disclosed because they had the intent to pay for a very specific election expenditure. In her ruling, Ms. Howell has thrown out a decades-old FEC regulation on disclosure that she declared was flawed and “has deprived the electorate of donor information that was intended and supposed to be disclosed.” However, she delayed the deadline for a replacement regulation by 45 days to give the FEC time to come up with one.
The Supreme Court on Tuesday refused to block Ms. Howell’s decision. Most likely, there will be further litigation and rulemaking, so the direct impact on November’s midterm elections cannot be foreseen. However, the judge has taken an extremely important step by calling into question whether dark money will be able to remain in the shadows. Donors may now correctly ask whether their secret contributions will remain so. One exceedingly valuable upshot of this case is that dark money might begin to move into the sunshine on its own. That would be a positive step for democracy and for the health of the political system.