Sun, 27 Sep 2020

Dark Money Campaign Contributions Headed for Record High

Voice of America
09 Aug 2020, 16:05 GMT+10

Nonprofit organizations and other outside groups that don't disclose their donors are spending record amounts of money on the 2020 U.S. presidential and congressional races, signaling their growing influence in national politics.

These so-called "dark money" groups so far have funneled at least $177 million to independent political action committees, known as super PACs, in the 2020 election cycle, according to data compiled by the Center for Responsive Politics, a Washington-based group that tracks money in politics.

By comparison, those groups gave $178 million in the entire campaign cycle two years ago, according to the center. In addition, dark money groups this time have spent more than $19 million on direct political advertising, a figure that is likely to rise as campaigning picks up its pace in the coming months.

Anna Massoglia, a researcher at the Center for Responsive Politics, said spending by super PACs and other outside groups that take money from unidentified sources is on track to set a new record in this two-year election cycle.

"Dark money spending has continued to flow into the 2020 election cycle," Massoglia said in an interview. "We've seen dark money influencing and impacting 2020 elections in a few different ways."

Super PACs

Proponents of political groups that are beneficiaries of contributions from unidentified donors, such as nonprofits and shell corporations, reject the "dark money" label used by their detractors.

Regardless of what this practice is called, the prevalence of outside money exploded after a 2010 Supreme Court ruling that said the government could not restrict political spending by corporations and labor unions. That gave rise to the emergence of a new breed of political spending juggernauts - the super PACs.

In the decade since the Supreme Court decision known as Citizens United, dark money groups, such as the U.S. Chamber of Commerce, have reported nearly $1 billion in direct spending on U.S. elections to the Federal Election Commission, according to the Center for Responsive Politics.

While that's a small fraction of the overall spending on U.S. elections, critics say it has enabled wealthy donors to influence the outcome of elections while keeping voters in the dark about their role.

"This is a growing problem, and millions of dollars are going to be flowing into super PACs in the weeks ahead before Election Day," said Michael Beckel, research director for Issue One, a Washington-based group that monitors the role of money in politics. "Some of that money could be coming from mysterious sources that the public has no idea who it is," he told VOA.

Conservative defenders of anonymous spending dismiss claims of nefarious intent and say that disclosing the names of individual donors could subject them to political intimidation and harassment.

When organizations such as the U.S. Chamber of Commerce and Planned Parenthood give money to super PACs, they say, voters know that the funds come from their members and backers.

"So the idea that this is something that the American people know nothing about and don't know who's trying to influence them, I think is often quite false," said Bradley A. Smith, a former Republican chairman of the Federal Election Commission who now heads the Institute for Free Speech, a conservative group that opposes campaign finance restrictions.

Veil of secrecy

Dark money groups don't just give money to super PACs and other political organizations. Increasingly, they are funding so-called issue advocacy ads. While carefully avoiding terms such as "vote for" or "vote against" a candidate, these ads can nonetheless cast a candidate in a certain light, Massoglia said.

"In doing so, they effectively operate as political ads without having to disclose to the FEC," Massoglia said.

The goal of transparency is at the heart of the U.S. campaign finance system, even if it often is not achieved. By law, all political organizations must disclose their donors to the Federal Election Commission to help voters make more informed decisions about which party or candidate to support. Super PACs are no exception.

But examining a super PAC's FEC disclosure filings won't lift the veil of secrecy over the true source of their funds.

Take, for example, Victory 2020, a new joint fundraising committee involving two super PACs working to elect Democrats this November. One is called American Bridge 21st Century and the other is the pro-Joe Biden group Unite the Country.

Victory 2020's FEC filing shows that $5.7 million out of the $5.9 million it has raised this election cycle came from a progressive outfit called the Sixteen Thirty Fund. But because the Sixteen Thirty Fund is registered as a social welfare organization whose primary purpose is not political, it is not required to disclose its donors. The group says it helps "nonprofit leaders and advocates confront a wide range of challenges," from climate change to racial justice.

This lack of transparency runs the political gamut. On the Republican side, the super PAC Congressional Leadership Fund received $9 million from the conservative American Action Network in June. Like the progressive Sixteen Thirty Fund, the American Action Network is registered as a social welfare organization not required to disclose its donors.

On its website, the group says that its "goal is to put our center-right ideas into action by engaging the hearts and minds of the American people and spurring them into active participation in our democracy."

The role of shell companies

While nonprofit groups are the most common vehicle for funneling dark money into elections, wealthy donors also use shell companies to fund super PACs.

In a recent report, Issue One identified a dozen such shell corporations. Among them: a New York-based company that gave $75,000 to a liberal super PAC in Texas. Issue One said it could not conclusively link the company to any one individual. Other shell companies were apparently formed for the sole purpose of making donations to super PACs.

"We're completely in the dark about where some of these shell companies got the funds," Beckel of Issue One told VOA.

This is a loophole that could be exploited by foreign actors seeking to meddle in U.S. elections, Beckel warned.

"The threat is serious, and anyone across the political spectrum could be benefiting from secret money," he added.

In recent years, the Justice Department has charged several individuals accused of giving foreign money to pro-Obama and pro-Trump super PACs.

"This is a problem that needs action now, and it is a glaring loophole in campaign finance law that is just waiting to be abused," according to Beckel.

Transparency advocates want Congress to beef up disclosure requirements. A bipartisan bill introduced on Capitol Hill called the Shell Company Abuse Act would make it a crime to set up a shell company with the intent of concealing foreign campaign donations.

"Unless Congress puts more teeth in the law, we expect foreign actors to continue to try to abuse this loophole in the system," Beckel said.

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