DO AS I DO

Groups Decrying ‘Dark Money’ Use Shadowy Money Themselves

At least 21 politically active groups who purport to hate “dark money” failed to fully disclose own funders.

01.14.16 10:00 AM ET

By Liz Essley Whyte, Center for Public Integrity

Groups that complain about “dark money” in politics may need to look into the darkness that shrouds their own pots of money.

A number of groups that advocate against anonymous donations in politics are themselves responsible for putting money into elections that cannot be traced, often hidden under layers of opaque networks.

The Center for Public Integrity found 21 groups, vocal about so-called dark money, that put money into politics but do not fully disclose their donors. The groups either gave to ballot measure campaigns, paid for messages about candidates or gave to political action committees.

“If you’re going to jump into the arena of combating dark money, it’s far better to shed light on your own money,” said Norm Ornstein, a disclosure proponent at the American Enterprise Institute, a right-leaning think tank. “You need a pretty powerful rationale for not doing that.”

But many of the groups identified by the Center for Public Integrity said that they already exceed what the law requires by disclosing at least some of their donors. Some relied on an argument that opponents of disclosure raise regularly: Their donors could face hostility or mistreatment if the public knew the donors’ identities.

Dark money groups fighting dark money

In Maine, groups advocating for clean elections helped pass a ballot measure in November that, among other things, will require election advertisements to display their top three funders. The groups emphasized the state’s need for transparency in their appeals to voters.

“When politicians rely on money from wealthy special interests, they end up ignoring our priorities,” one of the groups, Mainers for Accountable Elections, said in TV ads. “We need accountability and transparency to keep politicians honest.”

The group did not say in the TV ads who were the top funders of the messages, as the new law now requires others to do. And the committees advocating for transparency accepted contributions that cannot be fully traced—what some of those activists typically would call “dark money.”

A Massachusetts-based campaign finance reform group called the Piper Fund gave $200,000 to one of the Maine ballot measure committees advocating for the clean elections initiative, according to state records. But who exactly may have supplied that $200,000 to the Piper Fund is somewhat of a mystery.

The group lists a number of funds and foundations as “funding partners” on its website, including the Rockefeller Brothers Fund and the Ford Foundation.

(Both organizations also fund this nonprofit newsroom. Click here to see a list of all donors to the Center for Public Integrity. The Center accepts donations from donor-advised funds. It accepts anonymous donations up to $250 and on a case-by-case basis thereafter under the supervision of the organization’s board Executive Committee. The Center does not engage in political activity.)

But the Piper Fund website also acknowledges it receives money from anonymous givers and “numerous other individual donors.” It does not explain what share of its funding comes from these unnamed donors.

The fund’s director, Melissa Spatz, said the Maine donation came from a “pooled fund.” The group exists to reduce the influence of money in politics and build a fair court system, she said.

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A number of other nonprofit funders of the Maine ballot measure also disclose their donors but in a limited manner.

For example, Washington, D.C.-based campaign finance reform group Every Voice gave nearly $230,000, according to state records. Its website lists donors who have given $5,000 or more since 2011 but includes in the list “Anonymous.” Adding a layer of complexity, it also receives funds from other organizations, including the Piper Fund, whose donors can’t be fully traced.

“We go above and beyond what is required of us by law to disclose our donors,” Every Voice spokeswoman Laura Friedenbach said in an email. “We will continue to follow the rules no matter if there are changes in disclosure requirements.”

The president of one of the ballot measure committees for the Maine initiative, Andrew Bossie, emphasized that his group disclosed every donor. But its affiliated educational nonprofit, which gave money to the committee, does not disclose its donors. The result: The source of that money isn't clear to voters.

While he favors disclosure, Bossie said, it’s not fair for campaign finance reform groups to have to disclose every donor.

“Asking one particular group to play by a different set of rules just because they’re looking to change those rules is a little bit of an unfair expectation,” he said.

And it’s different when groups are giving to ballot measure campaigns, Bossie said, because donors cannot corrupt a ballot measure like they could a candidate.

But giving voters more information about who’s financing a ballot measure is a good enough reason to ask for disclosure, even if the measure can’t be corrupted, said Rick Hasen, a campaign finance regulation expert at University of California, Irvine, School of Law.

Hasen pointed to California’s Proposition 16 in 2010, when voters rejected a plan to make it harder for municipalities to form their own electric utilities. Pacific Gas & Electric, which stood to lose customers if cities started their own utilities, provided nearly all of the campaign’s $46 million in funding.

“Once the public learned about that, the measure was defeated,” he said. “And so disclosure in ballot measure elections provides voters with valuable information.”

Using conservative arguments

The D.C.-based nonprofit Food & Water Watch, which advocates for clean water and safe food products, last year joined more than 60 other organizations in signing a letter asking President Barack Obama to force government contractors to disclose their political spending.

“Hundreds of millions of dollars are being invested in our elections by donors who remain anonymous, leaving voters in the dark about the people and interests to whom candidates are beholden,” the letter stated.

But Food & Water Watch has also invested dollars in elections from unknown sources.

The group spent more than $600,000 since 2012 supporting ballot measures that would have required labels on genetically modified foods, according to data from the National Institute on Money in State Politics.

In its 2013 annual report, the most recent available online, Food & Water Watch emphasizes that it does not take money from corporations or governments and lists some foundations that have given to it. However, it thanks “anonymous funders and supporters” and does not list individual donors.

“That’s in order to protect them from blowback from the groups that we’re critiquing,” said Kate Fried, policy communications director for the group.

But protection from blowback is the same argument that many conservatives make against mandates that nonprofits disclose their donors, or that government contractors disclose their political giving to such groups. They often point to the 1958 case NAACP v. Alabama, in which the U.S. Supreme Court ruled that the state could not force the civil rights group to divulge its donor lists, as its contributors could face threats or persecution.

“It’s obviously hypocritical,” said David Keating, president of the Center for Competitive Politics, a conservative nonprofit that does not disclose its donors and argues against disclosure. “It also proves our point that many donors do value their privacy and won’t give money if they know their information is going to post.”

Differences in disclosure

Nonprofit groups’ disclosure policies vary. Some campaign finance reform groups list donors online; some disclose donors if asked. Some only disclose gifts from institutions; others list institutions and individuals. Some accept anonymous money; some do not. Some do not list gift amounts whatsoever; others list funders by dollar ranges.

Nearly all the groups identified by the Center for Public Integrity that partially disclosed their funding also accepted what appeared to be anonymous money from donor-advised funds. This means the gifts officially came from organizations such as the Tides Foundation or Vanguard Charitable Endowment Program at the recommendation of a donor who remains unknown to the public.

Out of the 21 groups that the Center for Public Integrity found using untraceable money even as they denounced it, 16 disclosed donors in some way. But all of their donor lists had shortcomings: some accepted anonymous money, others did not list amounts given or individual names.

One group, Democracy Initiative, seemed to have no donor disclosure online and did not respond to the Center for Public Integrity’s inquiries about its policies.

Another group, American Family Voices, does not disclose its donors. But last year the Center for Public Integrity showed that the group received big contributions from large unions, environmental interests, and a major corporate retail lobbying group. The group did not respond to requests for comment.

The final three organizations—U.S. Public Interest Research Group, People for the American Way, and Free Speech for People—said they do not publicly disclose donors.

Free Speech for People President John Bonifaz said that his group plans to create a policy this month that would disclose donors but still allow for anonymous gifts. He said it received only two anonymous gifts in the past five years.

U.S. PIRG gave more than $5,000 to the Maine ballot measure and cut five-figure checks to two clean-energy ballot measures in 2004 and 2006, according to state records and data from the National Institute on Money in State Politics.

Spokesman Chris MacKenzie said the organization doesn’t list its donors’ names because they give such small amounts: Less than 2 percent of its donations over the past 45 years came in contributions of more than $5,000.

U.S. PIRG does not disclose even its largest donors, MacKenzie said, “because they’re not representative of where we receive the bulk of our funding and because we aren’t required to by law. However, we would welcome laws that increase disclosure requirements for large donors.”

People for the American Way, which does not disclose its donors, has used its funds to pay for ads about candidates, including TV messages about Republican presidential candidate Mitt Romney in 2012 and U.S. Senate candidates in 2014.

“An environment where one side plays by one set of rules and the other plays by the other set of rules is not a good place to be,” said Marge Baker, an executive at the group, which advocates against anonymous money and supports disclosure legislation. “This shouldn’t be voluntary. This should be mandatory. Everybody should be playing by the same set of rules, and we’re going to fight tooth and nail to do that.”

Baker said even though her group isn’t legally required to disclose its donors, it’s considering adopting a policy to voluntarily disclose some donors because it values transparency.

On the other end of the spectrum is the Sunlight Foundation.

Though it does not spend any money on elections, the group itemizes donations on its website, listing each donor name, amount and the purpose of the gift.

But even Sunlight’s extensive disclosure has limits. For instance, though its policy is not to accept anonymous gifts over $250, in 2015 Sunlight accepted three donations from donor-advised funds at the recommendations of anonymous donors. One of the gifts was $25,000, as disclosed on its website.

“Sunlight has a strong preference for detailed public disclosure of all the sources of our funding online, and we're proud of the way we publish that information,” communications director Jenn Topper said in an email. “We review each situation carefully, and disclose the information we can.”

Some pro-transparency groups lack formal policies on whether to disclose their donors. Piper Fund and its parent organization, the Proteus Fund, do not have a written policy on donor disclosure. But that could be changing soon.

“Your email triggered some conversations within Piper that I think were really healthy,” director Spatz told the Center for Public Integrity. “Because of your email, I emailed with my colleagues at the Proteus Fund and we're starting to develop one.”

Spatz expects to have a policy in place in 2016.

This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.