IN ONE of the most misbegotten rulings of recent times, the Supreme Court decided in Citizens United in 2010 that corporate campaign contributions are a protected form of free speech and that “effective disclosure” would guard against corruption. The court declared, “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.” Moreover, the justices said, “This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
The court’s assumption was naive and has largely proved wrong. “Dark money” campaign groups that keep their donors secret have ballooned in size and importance, including tax-exempt “social welfare” organizations that are allowed to conceal the sources of their funds. Now a new report from the Brennan Center for Justice at New York University School of Law shows how the contamination of dark money is spreading.
The center on Monday published a study of campaign money flows in Alaska, Arizona, California, Colorado, Maine and Massachusetts that found dark money infiltrating state and local politics. Looking at outside funds, raised and spent outside candidates’ organizations, the center found that in 2006, about three-fourths of campaign spending in these states was fully transparent, but in 2014 only about 29 percent was transparent. According to the study, “dark money surged in these states by 38 times between 2006 and 2014.” That is a huge and disturbing shift from sunlight to the shadows. If it is happening in these states, which are home to about 20 percent of the U.S. population, then it probably is happening elsewhere, too.
The report also sheds light on the disturbing rise of “gray money.” Super PACs at the state and federal levels are largely required to disclose the sources of their contributions but increasingly are taking cash from dark-money groups that do not disclose donors. This layering of transactions allows each group to say it followed the law, but in the end it keeps donors hidden from public view. Donations from dark-money groups to super PACs, the main source of gray money, increased 49 times between 2006 and 2014 in these states, the study found.
Hidden donations at the state and local levels often come from special interests with very specific desires to bend public policy, such as the payday loan companies that obscured their funding for a candidate for Utah attorney general in 2012, hoping to be protected from newly toughened consumer rights rules. The companies used a web of generically named PACs and nonprofits to hide the money. In state and local races, advertising costs are lower than in national campaigns, meaning more bang for the dark-money buck, the study reported. Also, many states have gaping holes in campaign finance disclosure rules. One ray of hope: California. The study found its “exceptionally tough disclosure requirements and active enforcement culture” have kept secretive spending “at a relative minimum.” It can be done, but it takes political will, which has been missing both locally and in Washington.