Dark money
[4] In Citizens United, the Court ruled (by a 5–4 vote) that corporations and unions could spend unlimited amounts of money to advocate for or against political candidates.
[4] In 2012, Freedom Partners had the ninth-highest revenues among all U.S. trade associations that filed tax returns that year, more than "established heavyweights" such as the American Petroleum Institute, PhRMA, and the U.S. Chamber of Commerce.
[22] In the Senate elections, dark money spending was highly concentrated in a handful of targeted competitive states, and especially in Alaska, Arkansas, Colorado, Kentucky, and North Carolina.
[29] In 2014, the Democratic Party-aligned dark money group Patriot Majority USA, a 501(c)(4), spent almost $13.7 million on "direct and indirect political campaign activities", airing 15,000 television ads in targeted Senate races.
[30] In Alaska, Mark Begich was "one of the few Democratic candidates to come close to receiving as much support from dark money as his Republican opponent.
[19] According to Richard Skinner of the Sunlight Foundation, "the focus of early dark money being spent in the 2016 cycle" is on competitive U.S. Senate elections and some U.S. House of Representatives races.
[31] In September 2018, the Supreme Court ruled against a 40-year FEC dark money loophole, requiring "independent expenditure" groups disclose donations over a certain amount.
According to The American Prospect, Democrats "claim to agree that money in politics can be detrimental to democracy, but they cannot afford to let all the benefits of super PAC spending flow to Republicans...more quietly, leaders in the progressive fundraising world will admit that transparency is just not a serious priority anymore.
After decrying big-money Republican donors over the last decade, as well as the Supreme Court rulings that flooded politics with more cash, Democrats now benefit from hundreds of millions of dollars of undisclosed donations as well.
The authors noted the tension between the Democratic Party's desire to win elections and their stated "commitment to curtail secretive political spending by the superrich.
"[10] In 2021, Barre Seid donated stock worth $1.6 billion to Marble Freedom Trust, a 501(c)(4) conservative political group led by Leonard Leo, a former adviser to Donald Trump.
[40] Arizona became the first state to prohibit cooperation in the disclosure of nonprofit donors identities, shielding PACs and campaigns from federal election laws.
Mississippi adopted a similar donor disclosure ban in 2019; Utah, Oklahoma, and Virginia enacted them in 2020; as did Arkansas, Iowa, South Dakota, and Tennessee in 2021.
"[43] However, a single individual or group can create both types of entity and combine their powers, making it difficult to trace the original source of funds.
[45] One super PAC, that originally listed a $250,000 donation from an LLC that no one could find, led to a subsequent filing where the previously "secret donors" were revealed.
[47] The Associated Press, Center for Public Integrity, and Sunlight Foundation all "flagged dozens of donations of anywhere from $50,000 to $1 million routed through non-disclosing LLCs to super PACs" backing various presidential candidates, including Marco Rubio, Hillary Clinton, Ted Cruz, John Kasich, Jeb Bush, and Carly Fiorina.
[47] Bradley A. Smith, a former FEC chairman who is now with the Center for Competitive Politics, a group that opposes campaign-finance reform, argues that this practice is not problematic, writing that "it is possibly the making of a campaign contribution in the name of another," a violation of existing law.
[48] According to Kathy Kiely, managing editor of the Sunlight Foundation, "untraceable dark money is a preferred tactic of conservatives, while Democrats tend to use traceable super PACs.
In addition to PACs, non-profit groups ranging from Planned Parenthood to Crossroads GPS may make expenditures in connection with political races.
[61] In 2018 the U.S. District Court for D.C. struck down the Federal Election Commission's regulation allowing these groups to conceal their donors if they were engaged in political activity.
[63] Democrats in the United States Congress have repeatedly introduced the DISCLOSE Act, proposed legislation to require disclosure of election spending by "corporations, labor unions, super-PACs, and, most importantly, politically active nonprofits.
[20] The IRS "found itself ill-prepared for the groundswell" of such groups taking and spending unlimited amounts of money for political purposes in the wake of the U.S. Supreme Court's decision in Citizens United v. Federal Election Commission in 2010.
"[20] According to Lucian Bebchuk, a Harvard professor of law, economics, and finance who helped draft the petition, the request had drawn the support of "nearly a dozen senators and more than 40 members of the House.
[66] In 2015, Republicans in Congress successfully pushed for a rider in a 2015 omnibus spending bill that bars the IRS from clarifying the social-welfare tax exemption to combat dark money "from advocacy groups that claim to be social welfare organizations rather than political committees.
"[67] Other provisions in the 2015 bill bar the SEC from requiring corporations to disclose campaign spending to shareholders, and a ban application of the gift tax to nonprofit donors.
"[20] The Center for Competitive Politics views "dark money" as a pejorative term, stating that the phrase "evokes an emotional, fearful reaction" and contending that "many of the statistics published on the topic aim to mislead rather than enlighten.
[68] In May 2019 the Attorney General of New York, Letitia James, filed a lawsuit against the Treasury Department and the IRS for failing to respond to information requests about their guidance reducing donor disclosure requirements for certain tax-exempt groups.
[70] A 2024 study by NewsGuard, a misinformation tracking company, found that "the number of partisan-backed outlets designed to look like impartial news outlets has officially surpassed the number of real, local daily newspapers in the U.S." NewsGuard identified at least 1,265 such websites "backed by dark money or intentionally masquerading as local news sites for political purposes."
