Dark money threatens democracy

The Center for Competitive Politics’ Luke Wachob recently wrote in The Hill's Congress blog arguing that the increasing amount of money spent in U.S. elections by organizations that do not disclose their donors is being exaggerated. Wachob argues that, despite all the hoopla, this “dark money” spending only makes up a small percentage of hundreds of millions of dollars sloshing around in elections. The truth, however, is quite different.

Let’s get the numbers out of the way. This week, reported spending by organizations that do not disclose their donors broke $100 million. To put that in context, the comparable dark money spending in congressional races at this point in 2012 was $73 million, and it was just under $65 million at this point in 2010. In the 2006 midterms, the equivalent total was just $1.9 million. That’s less than the $2.7 million one dark money group, Crossroads GPS, spent this past Tuesday alone.

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And most of the reported dark money spending is yet to come. In six of the last seven cycles going back to 2000, more than half of the eventual total reported spending by dark money groups has come after Oct. 8. In the last midterms, for example, the $65 million that had been reported to the FEC by that date would balloon to $135 million by election day—more than double the $62.6 million spent by super PACs, which have to disclose their donors. 

Wachob is right to note that spending on elections grows from cycle to cycle, a truism that also means politicians spend more time dialing for dollars and less time working on policy or speaking to constituents. But overall election spending doesn’t grow at the same pace as the amount of dark money we’re currently seeing. From 2008 to 2012, for example the total cost of elections grew by nearly 19 percent, from about $5.3 billion to $6.3 billion, while the total amount of reported dark money spending grew by more than 340 percent, from $69 million to $309 million

The term “reported” is important here, because the most politically active 501(c) organizations—the ones that aren’t required to identify their donors—often engage in months of “issue ad” spending that doesn’t have to be reported to the FEC unless it occurs within 30 days before a primary or 60 days before a general election. As of early September 2014, one nondisclosing organization, Americans for Prosperity, had bought more ads in races around the country than any other outside group, according to a Wesleyan Media Project report produced in partnership with the Center for Responsive Politics. Eight of the remaining groups in the top 20 were also nondisclosing groups.

This spending, reported or unreported, is not being evenly distributed across all elections, either. Dark money groups spend heavily in races that have the most potential to shift control of Congress, which is why Wachob’s percentage makes little sense. Zeroing in on the races where the stakes are the highest, we see that dark money not only makes up a higher percentage of all money spent, but often it outpaces the money spent by super PACs and party committees.

In addition, the spending that most people find troubling isn’t coming predominantly from the established social welfare organizations that Wachob references, such as the League of Conservation Voters and the National Rifle Association. These organizations do spend a lot on politics, but they also have employees, volunteers, small donors and legitimate social welfare activities outside of their political activities.

Rarely do those who oppose better disclosure point to the growing number of 501(c)(4) and 501(c)(6) organizations that have few, if any, employees or volunteers and a handful of donors who provide massive election-year revenues  that plummet in off-years. These groups rarely seem to have any office space of their own, listing just the address of a law firm or a P.O. box, and it’s often impossible to get a sense of what, if anything, they do beyond trying to influence elections.

Wachob is also wrong when he suggests that those seeking a system that both protects the right to free speech and the right of nonprofit organizations to engage the public, on the one hand, and the right of voters to know what individuals or corporations are paying for efforts to influence how they cast their ballots, on the other, are somehow radical. Eight Supreme Court justices agreed in the Citizens United decision that disclosure is a critical part our democracy, and the public agrees. A survey released just last week by the conservative Hudson Institute and the liberal group Public Citizen showed that clear majorities find the growing political activity by nonprofits problematic and support clearer rules.

Maguire is the political nonprofit investigator at the Center for Responsive Politics. In 2012, he started CRP's Politically Active Nonprofits project, which uses IRS and FEC data to track the financial networks and political spending of "dark money" groups active in elections around the country.

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