FEC Called On to Close Dark Money Loophole Poisoning Democracy

An advocacy group called on the Federal Election Commission (FEC) on Monday to fix its interpretation of a rule that has helped dark money flourish.

At issue, says Washington, D.C.-based Public Citizen, is the federal agency wrongful reading of donor disclosure requirements for independent expenditures, or spending for or against a particular candidate. The agency also erred in its interpretation of the donor disclosure regulation for electioneering communications--ads for or against a political candidate that appear just ahead of an election.

By asserting that only "earmarked contributions" for those expenditures require disclosure, the agency created a loophole that effectively gutted full transparency of the sources of donations.

"No one earmarks their campaign contributions for a specific purpose," said Craig Holman, government affairs lobbyist for the organization's Congress Watch division. "Donors give money to campaigns and expect it to be used for campaign purposes."

In its letter (pdf) to the FEC, Public Citizen noted:

Among groups making independent expenditures (expenditures expressly intended to influence elections) disclosure of donors fell from 90 percent in 2004 and 97 percent in 2006 to only 70 percent in 2010. Notably, the only groups that could withhold information about their funders in the past were "qualified non-profits," groups that have no business purpose and receive their funding exclusively from individuals. No such assurance exists for the independent expenditures groups that concealed their donors in 2010.

That was the year the Supreme Court issued its Citizens United ruling, which opened the floodgates to dark money spending.

The letter also provides data from the Center for Responsive Politics showing the surge of this secretive spending in federal elections over the past decade:

"Dark money has become a scourge in our elections, allowing nondescript groups to raise and spend huge sums of corporate and special interest money for campaign ads, while refusing to tell the public who is paying to influence their vote," said Lisa Gilbert, vice president of legislative affairs for Public Citizen. "Knowing where the money comes from is a valuable voter's cue in judging the merit of the message."