Shine a light on dark money

With federal and presidential candidates already gearing up for the 2016 election season, eyes turn to funding. Money is power, and when the money behind a candidate hides from the spotlight, citizens grow circumspect. So it's alarming when one of the biggest potential flashlights grows dim.

And money grows dark.

"Dark money" is money spent by political nonprofit groups (mostly 501 (c)(4) and (6) organizations under the Internal Revenue Code). It's "dark" because these groups do not have to disclose where all their funds come from. Dark money, a non-issue less than 10 years ago, exceeded $300 million in the 2012 presidential election, and is projected to reach half a billion dollars in 2016.

According to the Federal Elections Commission, 2006 annual election spending categorized by groups - unions, trade associations, and social welfare organizations - totaled less than $12 million each. Same goes for spending by viewpoint (conservative, liberal, and "other"). A mere six years later, social organizations outpaced the rest by more than 400 percent, at $257 million. Conservative spending in 2012 skyrocketed above other viewpoints, at $270 million ($58 million liberal, $7 million other).

A "social welfare" organization is one seeking to benefit the community, such as economic, civic, or legal advocacy. Many legitimate ones exist. They're not supposed to participate in campaigns and their political activity is theoretically limited, but in reality, certain groups have now formed which are more partisan, politically active, and powerful than either their broad purposes state or the law envisioned. The IRS and FEC haven't been able to keep up with abuses.

Consider the story of two donors. Donor A - which may be a company, individual, union, lobbying, or trade association with a political agenda - donates a chunk of dough to Group C, a political nonprofit. The nonprofit group then buys expensive TV ads couched as for or against a hot-button issue mentioning Candidate X (or Opponent Y), or spends in other ways which benefit Candidate X. In this scenario the public is unaware of Donor A's identity. Group C is not required to disclose Donor A's identity.

Donor B donates the same amount of money to Candidate X directly, rather than going through the political nonprofit. A bright light shines by law; we are entitled to know who wrote Candidate X's check. Hence while we can learn Donor B's identity and political goals, we can't with Donor A's "dark" money. No federal candidate can be elected or re-elected without lots of financial support, generally from like-minded persons, so it matters.

In May the New York Times published a disturbing interview with Federal Elections Commission chair Ann Ravel, who said the FEC has pretty much "given up" on curbing abuses of dark money, let alone its rising influence on American politics. While the FEC is supposed to be nonpartisan, she says partisan members within it won't allow cases to go forward against nonprofit groups accused of improperly using their tax-exempt status for massive and well-financed political campaigns. There are a few new IRS rules coming down the pike, but they won't be effective by the 2016 cycle, nor do they address the crux of the problem.

Meanwhile, a partnership of two nonprofit watchdogs, GuideStar and Center for Responsive Politics, will use a new grant to help citizens keep track of at least some of the dark money, connecting the dots using available IRS filings and FEC data from 501(c) groups. It's not everything, but it will increase what's out there. To follow the money this federal election season try Opensecrets.org and Fec.gov.

Thanks to reader TEH for the topic suggestion.

Sholeh Patrick, J.D. is a columnist for the Hagadone News Network. Contact her at [email protected].