‘Dark money’: Conservative group wants image makeover – By TARINI PARTI 7/30/15 5:15 AM EDT Updated 7/30/15 5:15 AM EDT

The goal is to reduce negative perceptions about anonymous contributions.

Occupy Portland F29 marchers walk up SW Broadway in Portland, Ore., Wednesday, Feb. 29, 2012. The march was to raise awareness of the American Legislative Exchange Council or ALEC. (AP Photo/The Oregonian, Benjamin Brink)

The Koch brothers-backed group that helped launch the push for voter ID laws and “stand your ground” statutes has a new project: defending the anonymous “dark money” in politics.

The American Legislative Exchange Council, composed of conservative state lawmakers and corporations, devoted part of its annual conference last week to turning around negative perceptions about anonymous contributions. In an audio tape obtained by POLITICO, panelists at the San Diego event lament a movement gaining traction in state and local governments to require more disclosure of donations to politically active nonprofits, which are expected to spend hundreds of millions in the 2016 election.

According to the audio, speakers stressed that groups pushing for disclosure were strategic in labeling anonymous spending “dark money,” “conjuring images of shady operatives in smoke-filled rooms” in the minds of voters to boost their cause.

“Seems to me that by using the term ‘dark money’ in this discussion we are buying into their arguments,” said one state senator at the session. “If the media were to call it something better such as ‘anonymous free speech money’ or something else. Somebody needs to come up with a better label than ‘dark money.’”

Other speakers also acknowledged that disclosure advocates have waged a more successful public relations campaign in influencing voters’ opinion on the issue, and that it’s time for their side to step it up as more statehouses propose disclosure laws.


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Dark money: Despite $4 billion spent, midterms hinge on hidden funding – by Ben Piven October 31, 2014 5:00AM ET

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Ten years ago, it was 527 groups and Pioneer bundlers for George W. Bush. In 2008, Barack Obama took the nation’s top office by storm as soft money ruled. Last election cycle, super PACs were all the rage. In 2014, campaign finance reform has given way to dark money, with unknown sources of indirect campaign spending dropping hundreds of millions of dollars to influence federal races.

“Who are these people, and what do they want with the state’s Senate race? Who are these interests, and what is motivating them?” asked Sheila Krumholz, director of the Center of Responsive Politics, in reference to the burgeoning political fundraising tactic.

Dark money, about $200 million of which has been spent nationally this election cycle, is secretive money generated by nonprofit organizations whose primary purposes are not legally considered “political”.

“We can see where the money comes from going to the candidates’ campaigns and going to some of the outside groups,” Krumholz said. “But for politically active nonprofits, we have absolutely no idea who’s bankrolling their efforts.” She blamed anonymous donors for giving voters “inaccurate, misleading and deceptive information to make up their minds.”

The North Carolina Senate race between incumbent Democrat Kay Hagan and Republican challenger Thom Tillis has set records for out-of-state funding: $75 million as of Oct. 30. The candidates combined have raised only half as much as outsiders have dished out, and the total race spending exceeds $107 million.

Over $20 million of the outside money has been spent attacking Tillis – more than on opposing any other candidate nationally. Hagan has benefited from the Senate Majority PAC and Democratic Senatorial Campaign Committee, the two largest contributors. But much of the money spent against Hagan, who carries a slight lead, is not reported to the Federal Election Commission (FEC), and so it cannot be tracked precisely. However, there is somewhat of a paper trail for broadcast negative ads.

Not far behind the North Carolina face-off are close Senate contests in Iowa, where Republican Joni Ernst is polling just ahead of Bruce Braley for an open seat, and Colorado, where Democratic Sen. Mark Udall is fending off a challenge from Republican Rep. Cory Gardner. Outside spending makes up more than two-thirds of overall funds used to influence both outcomes.

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Consultants Are Cashing In On Campaigns’ Dark New Economics – Robert Maguire 02.22.14

Photo by Fotosearch/Getty

This report is cross-posted at the Center for Responsive Politics.

More than eight months out from Election Day, voters around the country are already being peppered with political attack ads like this one from a 501(c)(4) social-welfare organization, whose address is a post-office box in Des Moines, Iowa. In this second midterm election since the Supreme Court’s Citizens United ruling, nonparty groups such as super PACs and politically active nonprofits have already spent nearly $31 million on these kinds of ads, three times more than they had dumped into congressional races at this point in the 2010 cycle.

It’s not just the amount of money pouring into states like North Carolina, New Hampshire, and Alaska that is startling. Voters are increasingly left in the dark about where it’s coming from. That’s because the “dark money” nonprofits, primarily 501(c)(4) social-welfare organizations and 501(c)(6) trade associations, neither of which must disclosure their donors, are playing an increasingly prominent role in the fight to control Congress. By themselves, they have already spent 75 percent more at this point than in the record-shattering 2012 cycle, in which they would ultimately spend a whopping $310 million.


The often negative and misleading ads these groups put out may be little help to voters trying to make informed decisions, but the increased spending is a boon to the consultants who make millions no matter who wins. Just how much money these political entrepreneurs take home each cycle is difficult to say, though, and a paper just published by Harvard’s Shorenstein Center on Media, Politics, and Public Policy chides the U.S. press for being “oddly complacent” about this gap in political coverage. The paper, by former Thomson Reuters editor Lee Aitken—using data supplied by the Center for Responsive Politics—argues that the ability of a political operative to pocket so much money in a single election cycle may be skewing the national discourse toward more extreme views.

The media’s relative indifference to this self-enrichment may stem, in part, from the fact that consultants “are great sources and valued customers of the big media companies,” Aitken writes. But it’s also true that the sheer number and growing complexity of the networks into which the money is being poured, along with weak disclosure at the FEC and IRS, make it exceedingly difficult to follow the money all the way to someone’s bank account.

The IRS requires the nonprofits to provide almost no information about contractors they pay—only lump sums paid to the top five “independent contractors” that earn more than $100,000.

The roadblocks are many, Aitken writes, starting with the massive payments that campaigns and outside groups make to large “banquet” firms—one-stop shops for electioneering. The Obama campaign paid more than $300 million to one such firm, GMMB, in 2012, but knowing that lump sum gets one no nearer to discovering who in particular made a profit from the firm’s various services to the campaign. Similarly, the Romney campaign paid some $265 million to a shell company set up expressly to manage its media, which hid from view the remuneration of the campaign’s senior advisers.

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