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Defying the Odds

Defying the Odds
New book about the 2016 election.

Tuesday, August 7, 2018

Courts and Dark Money

In Defying the Odds, we discuss congressional elections as well as the presidential race.  Campaign finance is a big part of the story.

A release from CREW:
In a major defeat for secret money in politics, a judge ruled that dark money groups that spend at least $250 in independent expenditures—a key type of political ad—must report every contributor who gave at least $200 in the past year as well as those who give to finance independent expenditures generally, throwing out an illegal three decades old regulation that was used to avoid disclosure and changing the legal landscape for political spending.
The decision in Citizens for Responsibility and Ethics in Washington (CREW) v. Federal Election Commission (FEC) and Crossroads Grassroots Policy Strategies, handed down late on Friday, declares that the law unambiguously commands more disclosure than the FEC has required in 30 years, restoring Congress’s intended full disclosure of those making contributions to groups that fund independent expenditures—ads that explicitly endorse or oppose a candidate for office.
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The case stems from an FEC complaint filed by CREW in 2012 against Karl Rove’s Crossroads GPS over its failure to disclose the donors behind $6 million in independent expenditures in the Ohio Senate race. Even though Rove told a gathering of contributors that a donor had said he really liked Republican candidate Josh Mandel and had made a $3 million “matching challenge” contribution, the FEC said the contributor’s name could stay secret because he did not earmark it to pay for a specific ad. The court yesterday invalidated the regulation that decision was based on, saying it interpreted the Federal Election Campaign Act much too narrowly.
“This ruling could dramatically change the American political landscape and result in significantly more transparency,” Bookbinder said. “Major donors are now on notice that if they contribute to politically active 501(c)(4) organizations, their contributions will have to be disclosed, and if they are not, CREW will pursue enforcement cases with the FEC and, if necessary, in court.”
Read the decision here.

A July 24 release from Montana Governor Steve Bullock:
Governor Steve Bullock today filed a lawsuit against the Internal Revenue Service (IRS) and the U.S. Department of the Treasury over their decision last week to abandon disclosure requirements for major donors to dark money groups.
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The suit seeks to block the Trump Administration from upending the rules that have been in place for almost 50 years that require 501(c) dark money groups to disclose their major donors to the IRS. Absent that disclosure, so-called social welfare groups could be taking unlimited corporate, or even foreign, contributions to influence elections, contrary to the requirements that grant them tax exempt status.
A copy of the lawsuit is attached.
Governor Bullock has been called “the biggest threat to Citizens United,” and remains committed to ensuring Montana’s elections are the most transparent in the nation. As Attorney General, Bullock led the effortto preserve Montana’s 100-year-old Corrupt Practices Act, taking the case for the state’s citizen democracy all the way to the U.S. Supreme Court.
In an exceedingly rare bipartisan effort, Governor Bullock worked with Republicans and Democrats to pass the DISCLOSE Act to require the disclosure of donors to independent group spending money on state-level elections. The Act requires any group, regardless of their tax status, that spends money or resources to influence an election within 60 days of when voting begins, must disclose how they are spending money and the source of the money.
Most recently, Governor Bullock signed a first-of-its kind executive order requiring the recipients of major government contracts to disclose dark money spending in elections. The order represents a significant new step for transparency in government. Under the executive order, government contractors who have spent over $2,500 in the past two years in elections will be required to disclose their donations. The order covers contributions to so-called “dark money” groups that are otherwise not required to disclose their donors.