Dark Money Casts Shadow on Democracy

The week before the general election, UNM Political Science Associate Professor Mike Rocca presented a primer on campaign financing and a troubling change in the way political campaigns are being financed with dark money.

The 2014 general election may not be the most expensive election in U.S. history, even though experts expect it to total more than $4 billion in money raised and spent. But it may win for the amount of dark money that flowed through the races.

Dark money is money collected by 501(c) organizations. There is no federal or state requirement that it be tabulated or reported by anyone, anywhere. It is money spent on behalf of a candidate by someone somewhere who probably now wants something from that candidate. New Mexico is one of six states that do not require disclosure about money collected and spent by 501(c) organizations.

“If this dark money continues, we are going to have less transparency and less accountability,” Rocca said. “We will be literally unable to hold our members of Congress to state legislators accountable. And this strikes at the heart of democracy. We’ve got to figure this out.”

In theory, the super PACs and 501(c) organizations collect and spend money on elections to discuss issues without any consultation or input from the candidate. 501(c) is an Internal Revenue Service designation for non-profits, and educational organizations.

Rocca says campaign reporting laws have allowed this kind of loophole for years, but it has only been recently exploited. Now the floodgates for dark money have opened. It’s very hard to track exactly who is spending money on what candidates nationally, but it is clear more money is being spent by outside groups than ever before. An article in the New York Times calculates outside groups supporting Republicans raised and spent about $205 million in television advertising, while Democratic supporters may have spent about $132 million.

“What is interesting,” Rocca says, “is who is giving. The top one percent of individual donors gives Super PACs 47 per cent of the money they spend. It is not organizations. It is not corporations. It is individuals.” For 501(c) groups it is even less clear who is giving. “We have no idea what is going on with 501(c) groups because they are not required by the IRS to disclose. And those donations are coming in unlimited numbers,” he says.

The money is used to support allies. “Money is not buying votes. Money is being given to allies. If I am giving money to an ally in congress, you are already on the same page. I am giving it to you because you are on the same page as me. It’s not getting votes. It’s being given because of the votes.” Rocca said. “By far the most important reason that groups give money at all is to keep allies in office. You are hoping for something in return of course, maybe an earmark, but that person is no good to you outside of office. Money keeps your allies in office.”

And the money is fundamental to campaigns. Rocca says anyone who wants to challenge a member of congress in 2016 had better have at least $1.5 million to do it with. Candidates who want to challenge an incumbent senator need to think about raising $11 million. The money those incumbents receive from their allies makes the difference. More than 90 percent of incumbents are reelected.

Rocca, who says he rarely gives opinions in classes, is more than ready to share an opinion on dark money.

“We’ve got to know where the money is coming from, Roccas said. “This 501(c) issue strikes at the heart of our democracy. So we’ve got outside interests giving money, spending money on behalf of a candidate, and you have the office holder giving some sort of service to that outside interest, but we’ve got to see those contributions. That’s the point. That’s what is at stake here.”

Press and charts from the University of New Mexico.