Wednesday, October 22, 2014

Buying Political Influence - The Impact of Dark Money on American Politics


With the mid-term elections just weeks away, a recent report from Open Secrets looks at the growing issue of dark money in politics.

Dark money is defined as political spending by groups whose donor base remains hidden, largely because of loopholes in the IRS tax code.  Under normal circumstances, Super PACs are required by election laws to disclose the names of individuals and corporations that are their contributors.  Groups that are classified as nonprofits under Article 501[c][4] and those that are social welfare organizations are not required to disclose the identities of their contributors.  These 501[c][4] nonprofits can spend unlimited amounts on independence election expenses.  Examples of 501[c][4] groups include Karl Rove's Crossroads GPS which has donated money to the right-leaning American Crossroads PAC and the left-leaning Priorities USA which has donated money to the pro-Obama Priorities USA.   

Dark money is in large part responsible for those television and radio political advertisements that are sponsored by what appear to be non-political groups.   Interestingly, according to the Center for Public Integrity, Kentuckians have been the beneficiaries of approximately 63,500 ads on television alone in the tight race between Republican Mitch McConnell and Democrat Alison Grimes, current to October 6, 2014.  Spending in the Kentucky race has already passed $24.4 million.  

Here is a breakdown of who ran ads and how much they spent:


You'll note that on the Republican side of the ledger, one group, the innocuous-sounding Kentucky Opportunity Coalition or KOC has spent more than 30 percent of the $15.3 million spent to attack Democratic candidate Allison Grimes.

In case you were curious, here is a look at what these ads look like:



According to Open Secrets, as of October 8, 2014, thus far in the 2014 election cycle, total spending by dark money groups has already passed $100 million as shown on this bar graph, setting a new record for mid-term elections by a wide margin:


Going back to 2000, more than 54 percent of total dark money is spent in the final weeks of an election cycle.  This means that the 2014 cycle is likely to pass the $140 million plus that was spent in the Congressional and Presidential races in the 2012 election cycle.  By this point in the 2012 cycle, only $73 million in dark money had been spent in Congressional races.

Here is a graph showing the dark money spending by political affiliation to October 8, 2014:


Compared to their conservative-leaning dark money counterparts that have spent just over $80 million to this point in the 2014 election cycle, those who lean to the left have spent only $19.4 million thus far.   

In June 2014, an attempt was made to close this very obvious loophole with the DISCLOSE Act of 2014, DISCLOSE being an acronym for Democracy is Strengthened by Casting Light on Spending in Elections.  This bill, also known as S. 2516 would require all organizations that spend more than $10,000 in an election cycle to file a report within 24 hours, identifying all donors.  This was the third time that a similar bill has hit the hallowed halls of Congress, only to fail.  The 2012 version (S. 3369) of the bill was killed by filibuster in July 2012 in a 53 to 45 vote thanks to the Republicans. 

It's obvious that changes are needed to end the dark money opacity that now exists in American politics.  Unfortunately, it's just as obvious why Congress is highly unlikely to do anything about it.  After all, why bite the hand that could potentially be feeding you!