BOUGHT AND SOLD

10.22.14 9:45 AM ET

Dark Money and Our Looming Oligarchy

Hundreds of millions of untraceable donations are flowing to candidates, and at some point soon untraceable ‘dark money’ will likely overtake the system.

There is something obscene in looking at the raw numbers, is there not? More than $500 million being spent on House races, and north of $300 million on Senate contests. A half-billion dollars! In the House! Where, as of yesterday, the Cook Political Report was counting a mere 17 contests as toss-ups, with 19 others as vaguely competitive. [This paragraph originally said $300 billion, which was incorrect.]

But the gross (double entendre intended) amounts aren’t the money story of this campaign. The money story of this campaign is that undisclosed money is starting to overtake the system and overtake our politics, and that at the heart of this corruption sits a lie peddled to us by the Supreme Court when it handed down the Citizens United decision. Whether it did so naively or cynically, I honestly do not know. But let’s just say that if it was naïve, it was almost too naïve to believe, Steve.

Here’s the situation. Outside spending—that is, the spending not by candidates’ own committees—may possibly surpass total candidate spending, at least in the competitive races, for the first time. And of that outside spending, an increasing amount is the category they call “dark” money, which is money whose sources and donors don’t have to be disclosed. I mean, don’t have to be disclosed. At all. That’s because these aren’t SuperPACs, which at least do have to disclose their donor lists, but are 501c4 “social welfare” (!) groups that don’t have to file anything with the Federal Elections Commission.

You’ve heard a lot about how bad SuperPACs are, and they are, but they’re not even the main problem these days. Most SuperPAC money has to be disclosed. But social welfare money does not. This recent study by the Brennan Center tells the tale. It totaled up the outside money being spent in the nine most competitive Senate races and found that 33 percent of these outside dollars weren’t subject to disclosure requirements. This includes the aforementioned social welfare organizations along with trade associations, the 501c6’s, like the U.S. Chamber of Commerce, which is one of 2014’s biggest spenders, possibly spending more this cycle than it did even in the presidential year of 2012.

A further 23 percent is subject only to partial disclosure. So more than half of this outside money is now spread around behind either partial or total secrecy. That percentage is assuredly going to grow. Almost all of the Koch Brothers’ money—they earlier announced a goal of spending $300 million on these elections, just $100 million less than they spent in the presidential year of 2012—is dark, and if they succeed, others will surely follow their example.

Oh yes, there are Democratic dark money groups too. Interestingly, the League of Conservation Voters is a big player here. But overall there isn’t as much Democratic dark money coursing around out there. For example, in the nine key Senate races, GOP dark money tops Democratic dark money in eight of nine of them (Louisiana is the exception), and in many cases not by two-to-one but three, six, 10, 12 to one. The disparities are highest in Kentucky and Georgia—not coincidentally, the two races considered most of the year to be the best chances for Democratic pickups, and therefore the two races where someone deemed it vital that the most unaccountable money possible be used to finance attack ads.

Okay. So what’s this mean? Well, it means this. Under the quaint old corrupt system, at least you and I could in theory learn the names of nearly every donor to a candidate or committee. And yes, there were 501c4’s then, and c6’s, but they simply didn’t spend much money on electoral politics back then. Karl Rove and others figured out that there’s nothing stopping a c4 from doing almost pure electoral work (even though the law says it’s not supposed to be its “primary purpose”), and from there it proliferated, because they knew the IRS couldn’t enforce it. (And they went after the IRS, claiming to be victims of Lois Lerner, just to make sure.) And so it’s come to pass that people whose names you and I will never have a chance to know donate vastly more amounts of cash.

Of course, someone knows them: the candidates. If and when Iowa Republican Joni Ernst (roughly $7 million in dark money so far) and David Perdue in Georgia (a little more than Ernst) make it to the United States Senate, we can be sure they’ll remember who wrote the checks.

And now, to the Supreme Court. Anthony Kennedy wrote the majority opinion, which opened the sluices to corporate money. But as you might recall, Kennedy insisted that there should be no problem with this. Why? Because there would be no more secret money “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation's political speech advances the corporation's interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

Kennedy describes a good-government Valhalla here, where campaigns and committees get a check in the mail and instantly scan it and send it along to the FEC, and bam, Bob’s your uncle, it’s there for the whole world to see. Of course, few citizens are going to go poring through FEC tables, but at least they’d be there for timely public review for reporters. That would be…tolerable, maybe.

But that is not remotely where things are headed. One of our parties is against full disclosure. They used to be for it, the Republicans did. But then they saw which way the post-Citizens United wind was blowing and became anti-disclosure.  McConnell, the little Satan on his party’s shoulder on these matters, made the switch in 2012.

So that’s what this election marks: The routinization, in all contested races, of undisclosed money coming to dominate these campaigns, and the clear majority of it on the corporate, pro-Republican side. And yep, it can get worse.