Report Finds Dark Money at Unprecedented High

(CN) — Dark-money spending has soared in state and local elections six years after Citizens United, according to a new report by the Brennan Center.

The Supreme Court's 2010 resolution of Citizens United v. FEC barred regulatory limits against a nonprofit organization's independent political contributions.

Nonprofit groups are not required to reveal where their money comes from, and their spending has exploded in the wake of the decision.

In a report titled "Secret Spending in the States," the Brennan Center studied six states where sufficient data was available: Alaska, Arizona, California, Colorado, Maine and Massachusetts.

It found that only 29 percent of outside spending in state and local elections was fully transparent, a sharp drop from 76 percent in 2006.

Donations from dark-money nonprofit organizations to state political action committees increased 49 times in the past six years, from less than $190,000 to over $9.2 million.

While state action committees are required to disclose their donors, many have begun reporting other committees as donors, making it extremely difficult to identify the original donors.

In many of the elections that the Brennan Center analyzed, dark-money groups outspent the candidates themselves, showing that this kind of political contribution can often dominant the outcome of an election.

For example, the Grocery Manufacturers Association raised $11 million to defeat a Washington ballot proposal that would have required labeling of genetically modified foods. This occurred with no mention of GMA's individual members.

Dow Chemical meanwhile spent $2.5 million to defeat a closely contested 2012 Michigan ballot proposal that would have strengthened collective-bargaining rights, but it did not reveal its role until the following year, when it did so voluntarily.

The Brennan Center found that dark money at the local level frequently comes from special interests with a direct economic interest in the outcome. But Citizens United allows them to conceal their role in funding political advertisements from voters.

For example, the oil company Phillips 66 secretly spent $38,000 on a 2012 mail campaign to convince California voters against raising taxes on oil companies. It named its shell organization Californians for Good Schools and Good Jobs, a mantle the state later found to be misleading, but only after the tax measure had been narrowly defeated.

"On the smaller scale, the power of dark money to mislead voters, intimidate or malign candidates, and even discourage would-be candidates and ballot measure advocates, can come relatively cheap," the report says.

Running for a seat on the local school board was once a $10,000 race, but now can run up to $100,000 if outside money gets involved, the Brennan Center found.

The report shows that strong disclosure laws can still make a major difference.

Of the six studied states, California has the toughest disclosure requirements, and it has been able to keep dark money at a relative minimum.

The report urges states to adopt rules requiring the disclosure of donors' political spending even if they don't earmark their contributions for a certain cause.

It also noted the importance of ensuring that disclosure schedules make donors accountable before the election, and preferably in the advertisement itself.

"To be sure, strong rules and enforcement are not sufficient to end the tide of unlimited, unaccountable spending in an era where artificial entities are free to raise and spend whatever they like on politics," the report states. "A fundamental change in campaign finance law, based on a pro-democracy interpretation of the Constitution, is required. But smart rules and real consequences that incentivize compliance can make a real difference in providing voters information that matters to their decisions and in keeping elected officials accountable to the public."

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