New York Shines Light on 'Dark Money' Donors

New York state Attorney General Eric Schneiderman (AP)

New York Shines Light on 'Dark Money' Donors

NY Attorney General to force 501(c)(4)s to expose donor names, political spending

Non-profit organizations known as "dark money" groups will now have to step into the light in New York following a new rule issued by NY Attorney General Eric Schneiderman on Wednesday.

"When people spend money to try to influence our elections, the public needs to know where that money is coming from, and how it is being spent," Schneiderman told the Associated Press.

"Simply put, transparency reduces the likelihood of corruption."

Schneiderman announced Wednesday that nonprofit groups in the state, including 501(c)(4)s, will now have to "disclose their political spending, identify donors and detail expenditures such as broadcast and print advertising used in New York campaigns and to push certain issues" if they spend over $10,000 to influence New York campaigns "at any level," AP reports.

Although "dark money" spending is hard to track, it has been calculated that since the U.S. Supreme Court's 2010 Citizens United decision, 501(c)(4) organizations have spent more than $500 million on electioneering over the last two election cycles--most of it originating from corporations who donated money to groups "run by the likes of Karl Rove and the Koch brothers," as Jim Hightower recently explained.

Schneiderman continued:

There is only one reason to funnel political spending through a 501(c)(4), and that is to hide the identity of the donor. By shining a light on this dark corner of our political system, New York will serve as a model for other states, and for the federal government, to protect the integrity of nonprofits and our democracy [...]

By requiring nonprofits to disclose the extent and nature of their electioneering activities, we are protecting prospective donors from misleading solicitations, and giving voters more information about who is behind many of the ads they will see in this year's elections, and elections to come.

The disclosed information will be posted on the Attorney General's Office website.

However, while Schneider's new rule seems to promise much for campaign finance transparency, much is still needed to be done in state legislatures, as well as in DC, to root out corporate influence in politics.

The Brennan Center for Justice writes Wednesday:

[In New York] The Assembly passed a campaign finance reform bill in May, which included key elements such as small donor public financing, robust disclosure, and independent oversight. A version of that measure has been introduced in the Senate, and the Independent Democratic Conference (IDC) introduced its own bill. But the IDC says it will not bring reform to a floor vote over the objections of the Republican caucus.

"Attorney General Schneiderman's new disclosure policy offers a concrete solution to the explosive growth in secret non-profit political spending," said NY LEAD member David L. Calone, President & CEO of Long Island-based Jove Equity Partners. "This is the kind of effective leadership that is sorely lacking in Albany. It is time to move beyond the partisan gridlock and legislative inaction that has paralyzed Albany for far too long. The Independent Democratic leadership in the Senate must act now and pass campaign finance reform."

"I've seen firsthand how campaign finance reform, particularly small donor matching funds, has markedly improved New York City government. It will work statewide, too, but only if the IDC acts," said Brennan Center Chief Counsel Frederick A.O. "Fritz" Schwarz, Jr., former Corporation Counsel under Mayor Ed Koch. "Now is the time for real leadership. Now is the time for Senator Klein and his IDC colleagues to do what they promised to do when they took power: bring a reform bill to a vote. And now is the time for Governor Cuomo to pressure the Senate to get real reform done."


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