'Dark money' grows in politics even as states try to stop it

AP News
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Posted: Dec 19, 2015 12:41 PM
'Dark money' grows in politics even as states try to stop it

CHERRY HILL, N.J. (AP) — Just before Rhode Island voters chose their governor last year, a group in Ohio transferred $730,000 from secret donors to another Ohio organization that spent the money on television ads aimed at defeating Gina Raimondo, the Democrat who eventually won a tight race.

More than a year later, it's still not clear where the money came from or why two Ohio-based groups would want to influence an election 600 miles away. The same groups also funneled anonymously donated cash for major political ad campaigns in Arkansas and Illinois.

Rhode Island's disclosure laws are tougher than most, but this was a classic case of "dark money" keeping its secrets despite requirements that donors who pay for political ads reveal themselves to the public.

With the presidency at stake in 2016 as well as a dozen governor's races, 34 U.S. Senate races, all 435 seats in the U.S. House of Representatives and scores of mayoral races, state legislative seats and ballot initiatives, this kind of unlimited anonymous spending is expected to grow, and handling it has become the biggest campaign finance challenge for states nationwide.

Some legislatures are trying to collect and publish the sources of these donations, but most states allow independent groups to spend unlimited cash on political ads with little transparency.

At least one state, Wisconsin, is moving away from disclosure: Republican Gov. Scott Walker signed laws Wednesday that blur the lines between the activity of candidate campaigns and groups that — in almost all other states — are supposed to act independently.

This could set back democracy if other states follow suit, said John Pudner, the founder of Take Back Our Republic, a group based in Auburn, Alabama that argues for tighter campaign finance laws from a conservative perspective.

"Disclosure is important and fair," Pudner said. "If we want to get people away from their cynicism, let them know everything."

Political funding has been shifting to independent groups from individual campaigns since the U.S. Supreme Court's 2010 Citizens United ruling, which removed caps on how much corporations, unions and interest groups can spend on advocacy communications that do not specifically call for the election or defeat of candidates.

The ruling explicitly encouraged transparency: "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," Justice Anthony Kennedy wrote.

But the federal government doesn't require such disclosure, and most states don't either. Even in states that do have been stumped by webs of financing that obscure the sources.

Of $850 million spent on state-level political broadcast TV ads in 2014, $25 million — or about 4 percent — came from groups that do not have to disclose their donors, according to an analysis by the Center for Public Integrity of data from the advertising tracking firm Kantor Media/CMAG. That's twice as much as 2010, when a similar number of state offices were on ballots. In the 2012 congressional and presidential elections, dark money topped $300 million.

If last year's mayor's race in Newark, New Jersey, is any guide, anonymous cash will be a far bigger factor in 2016 races at all levels, nationwide. Independent spending dwarfed what the candidates' authorized committees spent, and while much of it was duly reported as coming from unions, much also came from advocacy groups not required to identify individual donors.

Most of this money pays for television commercials, but it also funds automated calls to voters, fliers through the mail, and advertising in newspapers, radio and the Internet.

Denise Roth Barber, managing director of the Helena, Montana-based National Institute on Money In State Politics, calls it a "shell game," with donors giving anonymously to one group that contributes to other organizations so that the original sources never appear on campaign finance filings.

In one of the most high-profile cases, California's political ethics commission and attorney general sued to force out-of-state groups to report who donated the $15 million they spent on the eve of the 2012 general election. Public records requests by the media then revealed that much of the money had come from wealthy Californians, and had been funneled through a network of conservative groups in failed attempts to defeat a tax-hike initiative backed by Gov. Jerry Brown and to pass an anti-union initiative.

Rhode Island has required groups running advocacy ads to disclose top donors since 2012. The Mid America Fund complied by reporting that the Republican Governors' Association provided some of the money for the ads in 2014, and that most of it came from another Ohio group, the Government Integrity Fund. The RGA discloses its donors. The Government Integrity Fund does not.

The spending — about half what each major party candidate spent during the last two months before Election Day — flooded Rhode Island's solitary media market in the final two weeks with ads accusing Raimondo of "gambling with our retirement."

The Rhode Island Democratic Party told the state elections board that the group should have disclosed its original donors. The board's executive director, Robert Kando, told The Associated Press that the issue will be considered in January at the request of Common Cause, which has pushed for more donor disclosure around the country.

The Government Integrity Fund's president, Ohio lobbyist Thomas Norris, did not return messages from the AP.

State Sen. Juan M. Pichardo, a Democrat who sponsored Rhode Island's disclosure law, told the AP that the group is "violating the intent and the law."

"It's deceiving," Pichardo said. "People should know where the money is coming from, what sort of influence and the intent is from the organization and the donors."

California, Montana, Maryland and a few other states have approved more requirements aimed at forcing independent groups to disclose their original funding sources, and several will get their first tests in 2016. But other states have quashed campaign finance overhauls.

New Mexico State Sen. Peter Wirth, a Democrat from Santa Fe, has twice seen the disclosure bills he sponsored win bipartisan Senate approval, only to die in the House.

"Groups on both sides kind of come out of the woodwork and are convinced that somehow this is going to change the rules and not work for them," Wirth complained.

The result for New Mexico: No limits on coordination between independent groups and candidates, and a big jump in dark money. Common Cause said spending by nonprofits and independent groups — some with anonymous donors — jumped from $6 million in 2006 to $14 million in 2012, and is growing fast.

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Associated Press writers Susan Montoya Bryan in Albuquerque, New Mexico, and Jennifer McDermott in Providence, Rhode Island, contributed to this report.

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Follow Geoff Mulvihill at twitter.com/geoffmulvihill. His work can be found at http://bigstory.ap.org/content/geoff-mulvihill .