Follow the money!

"Dark Money" is a term used by many in mainstream media around election cycles, but for the average, everyday American whose life doesn't center around politics, it can fly over a lot of people's heads. Here's a quick breakdown of that term and how most politicians are essentially using a loophole to keep donors' names private.

Political campaign contributions are public record. The Federal Elections Commissions website lists a candidate's donors, the amount and how that money is spent. For example, United States Secretary of Transportation and former presidential candidate Pete Buttigieg is tied to a Political Action Committee (PAC) called "Win The Era". When you browse the receipts, you can see names of individual donors and organizations. When you look at the records, there's one organization that sticks out. It's called "Win The Era Action Fund". Here's a link to a receipt showing "Win The Era Action Fund" donating to "Win The Era PAC".

Now, what's going on here? "Win The Era Action Fund" a nonprofit. Nonprofits do not have to disclose who donates money to them. On page 14 of their 2020 tax return, you can see a list of contributions, with the highest amount at $250,000. Notice under "Name, address, and zip," it says "N/A", but on the same line under "Type of Contribution" it says "Person". This is where the term "Dark Money" comes from. We see the amount, we see how much is donated, but we don't see who made that donation. Instead, "Win The Era Action Fund" keeps that money, and then funnels it off to "Win The Era PAC" as lump sum donation contributions.

To give it a formal definition, OpenSecrets.org calls says dark money "refers to spending meant to influence political outcomes where the source of the money is not disclosed". Essentially, the bulk of their funding cannot be traced back to the original donor.

In the 2020 election cycle, there was more than $1 billion in undisclosed spending; of that money, $514 million was spent to help Democrats and $200 million was spent to help Republicans. This isn't a partisan issues, both sides of the aisle are guilty of it. The 2014 election cycle saw the largest amount of dark money ever spent in a congressional election. Republican-leaning dark money groups dominated, with $94.6 million in expenditures, exceeding dark money expenditures by Democratic-leaning dark money groups ($28.4 million), and by expenditures that could not be classified ($1.9 million).

Former FEC Commissioner Ann Ravel notes how majority of money comes from "a tiny, highly unrepresentative part of the population." 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.

So, what's being done about it? This is a known issues, with journalists on deck each election cycle to flag these dark money orgs. Lawmakers 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. Mitch McConnell has been a the main roadblock in that legislation.

One counterargument by The Center for Competitive Politics (CCP) chairman and former FEC chairman Bradley A. Smith, opposes legislation to require the disclosure of dark-money groups, saying: "Our view is that many people will be driven out of politics if they are forced to disclose their names and their personal information. The purpose of disclosure is to help people monitor the government, not for the government to monitor the people."

Currently, the IRS is responsible for oversight for these types of nonprofits, not the FEC. 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.

With another campaign year upon us, it'll be interesting to see how the stats for funding compare for this year against 2020.