This Week In Local Dark Money News

When it comes to dark money — money spent trying to influence voters by groups that do not disclose their donors — the focus is often on the federal level. But a considerable amount of dark money is also going to state and local elections. Our weekly roundup looks at dark money spending at the local, state and federal levels.

The donors behind a nearly $2 million contribution to Missouri’s Republican gubernatorial candidate Eric Greitens are still unknown, according to U.S. News and World Report. A super PAC known as SEALs for Truth gave the money to Greitens’ campaign during the primary season, but after June 30th, which meant the source of the donation would not have to be reported until October 15. Last week, however, SEALs reported to the Federal Election Commission that the money came from an organization known as American Policy Coalition, Inc. There is very little publicly available information about either group. The FEC filing lists Washington, D.C. post office boxes as the addresses for the groups.

The top dark money spender this cycle, the U.S. Chamber of Commerce, is working to defeat one of its former employees, Evan Bayh, in a hotly contested U.S. Senate race, The New York Times reports. The Indiana Democrat had worked for the Chamber from 2011, when he first left the Senate, until earlier this year. Republicans have used Bayh’s job as evidence that he is out of touch with the voters of his home state. And the Chamber has paid for ads attacking Bayh for his support of the Affordable Care Act. While Democratic leaders accuse the Chamber of playing partisan politics, the group says Bayh’s voting record did not qualify him for its endorsement.

New York’s Attorney General Eric Schneiderman is accusing a “dark money empire” — including Americans for Prosperity, the Heritage Foundation and the Competitive Enterprise Institute — of running a campaign to try to discredit an investigation into claims that Exxon deliberately misled investors about the effects of climate change, Politico reports. Schneiderman and Massachusetts Attorney General Maura Healey are looking into whether the oil giant committed fraud. Exxon says the two Democrats’ investigation is politically motivated and aimed at limiting the company’s right to free expression. Schneiderman, who has argued repeatedly that the First Amendment doesn’t cover fraud, claims he has been attacked in “60 or 70 op-ed columns or editorials” since the investigation was announced. He said, “It’s like they pulled a lever on the dark money machine.”

An investigation by MLive and the Michigan Campaign Finance Network found that a majority of nonprofit and administrative accounts linked to sitting state lawmakers have received donations from corporations or special interest groups, including those with business before the legislature. Although state law prohibits politicians from accepting money directly from companies, these accounts are legal because they don’t directly fund campaign work. In general, the nonprofits don’t have to disclose their donors; the administrative accounts are required to do so only if they have raised over $25,000. As part of their investigation, MLive and MCFN said they “examined hundreds of public filings with the IRS and self-disclosures on political giving made available by companies, as well as contacted fund administrators to determine their connections to state lawmakers.”

Groups from outside South Dakota are pouring hundreds of thousands of dollars into a ballot measure race that could reshape the state’s campaign finance laws, the Center for Public Integrity reports. Measure 22 would create a mechanism for providing some public funding for elections, establish an independent ethics commission to oversee state lawmakers, limit campaign contributions, and increase donor disclosure requirements. Two 501(c)(4) groups are playing a prominent role in the race. Represent.Us, a nonpartisan pro-transparency group based in Massachusetts, is running the campaign for the measure. A Virginia-based organization, Americans for Prosperity, which was founded by billionaires Charles and David Koch, is leading the fight against the initiative.

A complaint filed earlier this month with Montana’s Commissioner of Political Practices has revealed tensions between two outside spending groups — and their leaders — involved in a state Supreme Court election, The Billings Gazette reports. The head of one of the groups, John Heenan, also serves as legal counsel for the Commissioner, without compensation, according to the Gazette. Heenan’s organization, Montanans for Experienced Judges, supports Judge Dirk Sandefur for the state’s highest court. Jake Eaton, a Republican political operative who filed the complaint, said that Heenan’s group failed to disclose that it gets nearly all of its money from attorneys. Eaton’s group, “Set Em Free Sandefur,” has attacked the judge for being soft on criminals. The Gazette reported that in response to the complaint, Heenan for a time on Wednesday changed the name of his organization to “Lawyers and Montanans for Experienced Judges,” until ten new donors who were not lawyers contributed money, allowing him to use the group’s original name again.

This Week In Local Dark Money News

When it comes to dark money — money spent trying to influence voters by groups that do not disclose their donors — the focus is often on the federal level. But a considerable amount of dark money is also going to state and local elections. Our weekly roundup looks at dark money spending at the state and federal levels.

A federal judge has determined that the conservative nonprofit group Citizens United must disclose information about its donors, or stop soliciting funds in New York, Reuters reports. The group had sued to stop New York Attorney General Eric Schneiderman from enforcing rules requiring it disclose its donors, citing its first amendment rights. However, U.S. District Judge Sidney Stein found no evidence that donors would face public backlash or financial harm if donors were disclosed, and therefore ruled the group’s first amendment rights were not violated. Citizens United was the plaintiff in the Supreme Court case Citizens United v. FEC. The high court’s decision in that case allowed corporations and unions to spend unlimited amounts of money in elections, provided they do so independent of candidates.

A joint study by the Center for Responsive Politics and the Wesleyan Media Project has found that outside groups have paid for nearly half of all ads in Senate races this cycle.The percentage is even higher in competitive races. Outside groups — including dark money groups that don’t have to disclose their donors — accounted for 80 percent of ads in Ohio, Pennsylvania and New Hampshire.

The week has not been a good one for Democrat Ted Strickland, of Ohio. On Tuesday, The Washington Post reported that top Democratic groups had delayed their ad buys in the state. The same day, The Hill revealed that a super PAC associated with the billionaire Koch brothers had canceled an ad buy supporting his opponent, Sen. Rob Portman. Strickland has fallen behind in recent polls in Ohio, and the moves by outside groups to pull or delay ad buys indicate that they are confident the race is becoming less competitive.

The Senate race in Nevada has become a proxy war between outgoing U.S. Senator Harry Reid and the Koch brothers, according to the New York Times. Sen. Reid is supporting Democratic nominee Catherine Cortez Masto, while the Kochs are supporting Republican Rep. Joe Heck. Freedom Partners Action Fund, Concerned Veterans for America, Americans for Prosperity and The Libre Initiative, all outside groups associated with the Kochs, are working to mobilize voters against Ms. Cortez Masto. Meanwhile the Senate Majority PAC, a super PAC associated with Sen. Reid, is working to elect Cortez Masto, as are other outside liberal groups including the League of Conservation Voters. A poll taken in July indicates the race is too close to call.

This Week In Local Dark Money News

When it comes to dark money — money spent trying to influence voters by groups that do not disclose their donors — the focus is often on the federal level. But a considerable amount of dark money is also going to state and local elections. Our weekly roundup looks at dark money spending at the state and federal levels.

Americans for Prosperity (AFP), a dark money group founded by billionaire David Koch, has launched a campaign against a South Dakota ballot measure that would require political nonprofits to disclose their donors, USA Today reports. According to the news organization, the campaign is “part of a sustained effort by [the Koch network] to keep government agencies and the public from learning more about its financial backers.” AFP CEO Luke Hilgemann told USA Today that donors can be subject to harassment and intimidation when their identities are disclosed, making it more difficult for them to exercise their free speech rights to advocate for political causes. Hilgemann also said that politicians who have opposed his organization’s views on tax and other policy issues have backed the measure, “because they don’t like us bringing these issues to light and holding them accountable.”

The FBI is investigating the role Arizona’s largest electricity supplier played in a 2014 election for commissioners to the state’s utility rate-setting agency, according to The Arizona Republic. The news organization reports the power supplier, Arizona Public Service, is suspected of “indirectly funding” at least one 501(c)(4) organization that spent money to elect two commissioners with close ties to the utility. Federal agents have sent grand jury subpoenas to Pinnacle West Capital, which owns Arizona Public Service, the electricity supplier, according to a regulatory filing cited by the news organization. The utility and the nonprofit, Save Our Future Now, each say they are cooperating with the investigation. On Wednesday, the director of utilities for the Arizona Corporation Commission, the agency that determines what customers pay for power and water, resigned without explanation. His resignation will take effect in mid-October.

One Nation, a dark money group affiliated with political strategist Karl Rove, has canceled its ad buy in Ohio’s U.S. Senate race, the Wall Street Journal reports. The cancellation of the $2.8 million media buy to support Republican Sen. Rob Portman seems to indicate the group is confident he will win re-election. One Nation also announced a $1 million ad buy to bolster Republican Sen. Roy Blunt’s re-election bid in Missouri, the St. Louis Post-Dispatch reports. Blunt is running against Democrat Jason Kander, Missouri’s Secretary of State.

Some campaign finance reform groups in New York don’t want Gov. Andrew Cuomo to sign a bill that would require outside spending groups to provide more disclosure about their donors and their relationships with candidates, according to WRVO Radio. Cuomo championed the legislation, which passed the state legislature in June. The reform groups argue that the measure doesn’t address the root causes of political corruption, while making it more difficult for small organizations to lobby state government. A Cuomo spokesman denounced that position as hypocritical. The governor is expected to sign the bill soon.

New York Governor Takes Aim at Dark Money And Independent Expenditure Groups

New York Governor Andrew Cuomo unveiled a series of measures Wednesday to restrict the role of outside groups in elections.

The new measures are aimed at clarifying what constitutes coordination between so-called independent expenditure groups and campaigns. Such groups are not supposed to coordinate their ad buys and other activities with campaigns, but many do.

The Governor also announced a plan to curb “dark money” — money spent on elections from groups that aren’t required to disclose their donors. He called on lawmakers to pass legislation applying the same contribution limits to limited liability corporations (LLCs) as traditional companies. LLCs can be used to funnel money to independent expenditure groups.

Cuomo framed these measures as a response to the Supreme Court’s 2010 Citizens United decision, which he compared to prior Court decisions upholding slavery and the internment of Japanese Americans during World War II.

With Citizens United the dam burst and big, dark money flooded the political system,” he said during a speech at Fordham Law School where he announced the measures. “Reform must start by addressing this perversion.”

The Citizens United ruling allowed corporations and unions to spend unlimited amounts of money on elections, as long as that spending was independent of — that is, not coordinated with — campaigns. As part of his announcement, Cuomo unveiled an opinion by Alphonso David, counsel to the governor, detailing what factors regulators should examine when considering whether an independent expenditure group is coordinating with a candidate’s campaign.

In his nonbinding memo, David advised regulators to consider whether a candidate formed a particular group before running for office, whether the group is staffed by individuals who used to work for the candidate, and whether a group used materials prepared by a candidate’s campaign (such as b-roll footage). The guidelines, David wrote, are necessary to “achieve the basic intent of the existing legislation,” adding that current law does not “appropriately codify a demarcation between candidates and independent spenders.”

David said that a change in the law is needed “to support the public’s interest in an open and accountable electoral process.”

The New York State Legislature’s current session ends next week, making it unlikely any new regulations on independent expenditures or dark money will be approved before then.