State legislatures taking aim at dark money, disclosure

a wad of 'dark money' is pictured

Though “dark money” has become a household term thanks to the role it has played in federal elections, the influence of political spending funded by anonymous donors is becoming just as pernicious in state and local politics. In response, lawmakers nine states have put forth proposals to shed more light on the unknown interests influencing local elections.

An analysis of recent bills collected by Sunlight’s Open States tool finds 125 pieces of legislation addressing campaign finance reform in states’ most recent sessions. Legislators in several states proposed bills aimed at outing the largest donors of politically active dark money operations.

Increasingly, tactics are shifting to targeting issue advertisements, or electioneering communications in campaign finance parlance, which skirt legal standards of what qualifies as a campaign advertisement. Because these ads do not include terms like “vote for” or “vote against,” they are treated differently in federal and state campaign finance laws and often do not trigger public disclosure requirements.

A subset of the bills aimed specifically at reforming anonymous spending rules.
Electioneering ads are a time tested way for nondisclosing groups and other political actors to exert political influence while flying under the public’s radar. In March of last year, Sunlight reported on the more than $240,000 the American Chemistry Council spent on issue ads supporting lawmakers on the House Energy and Commerce Committee in advance of a hearing on an overhaul of the Toxic Substances Control Act.

Democratic representatives in Minnesota drew up HF 43 to widen the scope of ads that trigger disclosure to any communication that “is not susceptible to any other interpretation by a reasonable person other than that as advocating the election or defeat of one or more clearly identified candidates.”

In Montana, where Democratic Gov. Steve Bullock has made improving campaign disclosure a tenet of his time in office, Republicans in the state’s upper chamber helped to ferry through Senate Bill 289, which would require any group running campaign ads to disclose their largest donors — or the chief executive for corporations or unions.

Similarly, in Arizona, Senate Bill 1207 would require disclosure of top donors for any group running independent expenditures, that is, ads that contain terms like “vote for” or “vote against.” That bill stalled in a Republican-dominated legislature along with a host of other campaign finance reforms. Debate continues on HB 2649, which would more clearly define political committees.

Dark money has played an outsized role in the Grand Canyon State, where Sunlight and others have reported on the millions of dollars flowing into a race for the Arizona Corporation Commission, which regulates state utilities. One shadowy nonprofit that spent $2.4 million on commission races had connections to Arizona Public Service, the state’s largest power company, via the foundation arm of Arizona State University.

Full public disclosure in campaigns, however, extends beyond anonymous spending. Here is a quick break down of all 125 campaign finance reform bills Sunlight discovered by their major purpose:

Note: The “type” of bill was categorized by Sunlight based on our reading of the legislation’s major purpose. Many of these bills cut across multiple categories. You can see all the underlying data on state campaign finance reform legislation here.
A positive trend for transparency advocates: Lawmakers in six states have crafted bills related to the electronic filing of campaign finance reports. In Arkansas, where candidates may file electronically but are not required to, Republican sponsor Jana Della Rosa’s told her colleagues, “It’s 2015. It’s electronic filing. We’ve had the capability for quite some time,” according to reports by the Northwest Arkansas Democrat Gazette.

If Arkansas were to enact the bill, it would put them ahead of the U.S. Senate, which has still yet to mandate electronic disclosure.

Democrats in Maryland are taking online reporting a step further with SB 667, the Real-Time Transparency Act, requiring politicians to disclose large hard money contributions within 48 hours instead of waiting weeks or months until the next regular reporting deadline. The legislation takes its inspiration from a federal bill of the same name that Sunlight helped to draft.

Other trends in transparency include a push to make politically active corporations beholden to their shareholders by requiring regular disclosures of political activity. As the Center for Public Integrity reported in February, four states are considering proposals that would tie corporate campaign spending to shareholder approval.

You can see all of the legislation we tracked with Open States — including pushes for constitutional conventions to overhaul campaign finance and new public financing — right here.