States Not Waiting for Congress to Act on Disclosure of Dark Money

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This week, New York Attorney General Eric Schneiderman adopted bold new disclosure rules to shine a light on dark money spent on elections in New York. Effective immediately, groups that spend $10,000 or more on state and local electioneering will have to publicly disclose their contributions and expenditures on the New York Open Government website. Nonprofits registered with the state will also be required to report the percentage of their expenditures that go to federal, state and local electioneering.

Last week in California, the Senate passed a version of the DISCLOSE Act. If enacted, the bill would require disclosure of donors to outside groups that run political ads. 


And in Montana, Republican lawmakers this week unveiled a proposal for a ballot measure that would require any entities that spend money to influence campaigns in the state to make public information about their financial supporters.

Unlimited secret money has been fueling our elections to an ever-greater extent since 2010, when the Supreme Court decided in the Citizens United case that corporate money could be used to influence elections so long the spending is “independent” of candidates’ campaigns. The Court relied on the mistaken assumption that in the Internet era, such spending would be transparent, noting, “prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions.” What the Court failed to take into account was Congress’ inability to pass laws that would ensure the public had the spending information needed to hold “corporations and elected officials accountable.” Instead, at least $300 million in dark money was spent during the 2012 election cycle, while Congress continues to sputter along in its effort to create a disclosure regime.

The diverse efforts in New York, California and Montana show that those states—and hopefully others—won’t wait while Congress struggles to find a way to move forward on disclosure legislation. By taking matters into their own hands, states are showing the feds how it is done.

The action in the states demonstrates that there is no single right way to approach the dark money dilemma. Whether by rule, ballot initiative, or legislation, leaders at the state level are seeking to help better inform their citizens about who is paying for elections. Importantly, state-level efforts also demonstrate that neither party has a monopoly on promoting disclosure. In California and New York, as at the federal level, efforts to disclose dark money were led by Democrats. In Montana, it’s a group of Republicans who have taken the reigns of the transparency efforts. As Republican state Senator Jim Peterson noted, “Transparency is not a partisan issue. It is not partisan that those who speak freely, should have to freely identify themselves.”

Those opposed to transparency will try to stop the forward momentum, and any success will likely be met with litigation. But as long as the efforts at greater transparency are narrowly crafted, claims that transparency of dark money will “chill speech” should be quickly shot down and new laws and rules upheld. The New York rule, for example, strikes the right balance—addressing the corrupting influence of secret money in elections by bringing it out of the shadows, but allowing for donors to nonprofits to remain anonymous if their contributions are segregated from any money used for electioneering activities. In addition, the AG may waive public disclosure requirements if there is a reasonable likelihood that a donor would be subject to harm, threats or harassment as a result of the activities of the organization.

As AG Schneiderman put it, “There is only one reason to funnel political spending through a 501(c)(4), and that is to hide who has bankrolled the effort.” New Yorkers, Californians and Montanans are fortunate to have leaders willing to take on dark money. They examples they set should embolden other states—and maybe even the federal government—to do the same.

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