THE CARICATURE of a fat cat in political campaigns is that of an individual who hands out donations to candidates in expectation of favorable treatment. But judging by the latest evidence from the 2012 election cycle, the reality is far different. “Dark money” now more often flows from a web of hidden shell companies and secret wire transfers — it’s more a sophisticated money-laundering scheme than simple brown envelopes stuffed with cash.
The Post and the Center for Responsive Politics, a nonpartisan group that tracks money in politics, analyzed tax returns filed by 17 organizations that made up a network spearheaded by conservative billionaires Charles and David Koch. As reporter Matea Gold pointed out, the network’s resources and breadth make it singular in U.S. politics; it poured about the same amount of money into elections as did the left-leaning union movement during the same cycle. The 17 groups raised at least $407 million, most of which went into advertising attacking President Obama and Democratic congressional candidates.
What was striking about the analysis was the complexity of the operation used to hide the identity of donors, who included the Kochs but was not limited to them. Some nonprofit entities served as de facto banks, feeding money to other groups downstream. Money sloshed around to organizations with cryptic, alphabet-soup names like SLAH LLC and ORRA LLC, making it even more difficult to trace where the funds originated. All of this activity was carried out beyond the federal campaign finance system, beyond the disclosure requirements of the Federal Election Commission, and far out of view of voters.
The Treasury Department has started a rule-making process to crack down on the use of tax-exempt social welfare organizations as conduits for dark campaign money. Congress also should examine several worthy pending bills that are designed to bring more transparency to campaign finance. The latest disclosures strongly indicate that a dark money tide is still rising and that plutocrats of all stripes are looking for ways to put cash into candidates’ pockets without being seen.
Republicans and conservative activists have insisted that a cloak of anonymity is necessary to protect their donors from “harassment,” and they point to the unfortunate treatment of the tea party groups by the Internal Revenue Service, which delayed and mishandled their applications for tax-exempt nonprofit status. What the IRS did was wrong, but this argument doesn’t wash.
The shady transfers and mysterious groups found in the last election cycle are more typical of drug runners or tax evaders. The donors to the conservative network are not such nefarious people, but why then do they use the same tactics? What do they fear from disclosure of their political investments? Are they ashamed of their positions or their candidates, or of their role in supporting them? Voters know that these donors are trying to hide something, and that only creates more suspicion and cynicism. The Koch brothers and others with great fortunes are adults, and if they want to participate in campaigns, they should stand up for what they believe in and do it in the open.