No, less disclosure will not reduce dark money

A pile of hundred dollar bills
Photo credit: Wikimedia Commons

Here’s a wacky idea: If you want to reduce the amount of money in politics, and in particular “dark money,” make disclosures less frequent. So argues Lindsay Mark Lewis, the executive director of the Progressive Policy Institute and the former finance director for the DNC, in a provocatively titled article, “The Easiest Fix for Dark Money: Disclose Less Often.”

I’ve seen some odd arguments for limited disclosure over the years, but this may be just about the strangest and most divorced from reality. But, these ideas are out there now — so a debunking is necessary.

Lewis argues that:

As disclosure has become more frequent and more detailed, it is nearly impossible to run for Congress without focusing on early money. Frequent disclosure also makes early impressions matter more. If you’re elected to Congress in November, you can’t spend time learning the job or getting to know colleagues. By March, you have to report how much you have raised. Ninety days after being sworn in, political reporters, the opposing party, and political hacks will pore over your report to determine the strength of your reelection campaign based on money.

Certainly, fundraising has become more demanding. But the primary reason that fundraising has become more demanding is not because of disclosure. It is because campaigns have become more expensive.

In 2012, the average winning House seat cost $1.6 million, while the average winning Senate seat cost $10.3 million. Candidates need to start raising money right away either because they need the money for their next re-election, and/or because they need that money to start their climb up their party hierarchy (or stay atop it). And whether or not those quarterly reports are disclosed publicly, party leaders have their own internal fundraising targets – and ways of enforcing them.

Moreover, even if we were to assume that somehow those fundraising totals could stay secret in the absence of FEC disclosures, there’s good reason to expect that in a limited information environment, candidates would feel under pressure to raise more, not less money.

To understand why, think Cold War psychology. During the Cold War, both the U.S. and the U.S.S.R had every interest to overstate their military capacities. This, in turn, led the other side to over-invest, fearing the worst, until there were enough arms to eradicate humanity several times over. Hence, a vicious cycle of escalation, fueled by imperfect information.

Similarly, absent timely disclosure, campaigns would have every reason to puff up their fundraising numbers publicly while aggressively fundraising privately. They would also have every incentive to make big ad buys — and make them early — as the most credible signal that their campaigns are rolling in money.

What about the donors? In Lewis’s telling, the donors are little more than hapless purses. Frequent disclosures apparently would expose their otherwise secret identities, opening them up to those “sharks” who run campaigns.

Lewis writes:

At one time, donors could escape getting hit up because their name would only appear at the end of a year or after the election. Now, once a donor or PAC’s name shows up in a disclosure report, the sharks circle. Other members see that a colleague has received a gift and come asking for their own “fair share.

In other words, Lewis assumes: 1) that large donors have no interest in being players who are sought after by candidates (really?); and 2) that campaigns and parties would otherwise have no idea who the large donors might be (again, really?).

He goes on to give an example:

If George Soros contributes $1 million to one super PAC 18 months before the election, all the other super PACs on the left will seek the same. Soros would have to change his phone number before 200 members of Congress called to inform him that they might lose 18 months from now if they don’t have a super PAC that is well funded.

In other words, he assumes that nobody would have known that George Soros (yes, that George Soros) had money to spend until he gave $1 million early to a super PAC. Also, apparently George Soros also does not have a secretary to screen his calls or the ability to say no to somebody asking him for money. And apparently, Soros also wishes to remain under-the-radar and for candidates and party leaders not to seek him out and suck up to him.

Lewis also posits his plan for less frequent disclosures as a cure for “dark money.” Dark money generally refers to campaign spending by 501(c) groups, organizations that do not disclose their donors (because they claim they are not actually “political committees”). Super PACs are not dark money organizations because they actually do have to disclose their donors. This is why, for example, Sheldon Adelson has become a household name.

Someone at a demonstration holding up a sign that says follow the money.

Lewis seems confused on this distinction, conflating super PACs and dark money organizations as the same. They are not, and the distinction matters. We don’t have to be concerned with how frequently truly dark money groups have to report their fundraising, because they never do. Certain donors prefer to give to dark money groups (as opposed to super PACs) because doing so helps protect them from public scrutiny. Candidates may also prefer this kind of support for the very same reason: less public scrutiny.

The reason these dark money organizations are growing in popularity is not because campaign finance disclosures are too frequent (as Lewis seems to assert). It is precisely the opposite – they are popular because they are subject to only the most minimal disclosure requirements.

Of course, Lewis might say that this just proves his point: Donors and candidates prefer to give to dark money organizations because they don’t want anybody to know how much they are giving/raising. But if Lewis’s theory were correct, the rise of dark money groups (subject to minimal disclosure) should be contributing to a decline in overall campaign spending. In fact, just the opposite is true.

The 2012 election was, like every presidential election before it, the most expensive ever. The final cost of the election was estimated at $6.3 billion. There is no way to know the true amount of money spent by dark money nonprofits that do not disclose their donors, since these organizations only have to disclose their expenditures within 60 days of the general election and 30 days of the primary. But based on what is disclosed, the Center for Responsive Politics calculated that 501(c) organizations spent $335.5 million in 2012, more than double the $169.0 million they had spent in 2010 and the $160.0 million they had spent in 2008. All indications are that 2014 will be even more dark money focused, and more costly, than the previous mid-term election.

Finally, all of this ignores the reasons why we have a disclosure system in the first place. The basic lifeblood of a democracy is information. And in a system of privately funded elections, it is essential to have real-time information on where candidates are getting their money. Knowing this tells us something about what they stand for, and whom they are spending their time with. In Lewis’s world, we would go for long stretches of campaigns without this basic information, on the misbegotten theory that the lack of disclosure would somehow reduce the demands of campaign fundraising. This would be a tremendous mistake.