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'Dark Money' Expected to Set 2016 Records
January 18, 2016

(This post first appeared in Philanthropy News Digest.)

The amount of so-called dark money, contributions to nonprofits and other tax-exempt entities that are not required to disclose their donors, backing various presidential campaigns in 2016 is expected to exceed the more than $300 million contributed during the 2012 presidential election cycle, the New York Times reports.

The troubling lack of transparency, the Times notes, is being driven by political advocacy groups that exploit a loophole in the tax code that allows them to avoid disclosing their donors while holding on to their tax-exempt status. Many of those organizations court special interest groups and wealthy donors who crave the influence that political contributions can buy but spurn any public accountability implied by those contributions. For example, almost 20 percent of the television ads touting the positions of Sen. Marco Rubio (R-FL) have been financed by dark money, the Center for Responsive Politics reports, with most of that coming from the nonprofit Conservative Solutions Project.

The biggest dark money spenders in this cycle, however, have been the U.S. Chamber of Commerce and Crossroads Grassroots Policy Strategies, a D.C.-based nonprofit organization that operates under the umbrella of the American Crossroads "super" PAC, which was co-founded by longtime Republican strategist Karl Rove. While the Federal Election Committee could force such organizations, with their heavy involvement in political campaigns, to register as political action committees, the commission hasn't shown any inclination to do so. Indeed, with Congress having effectively quashed, in the ominubus spending bill it passed at year-end, near-term efforts by the Internal Revenue Service to regulate these groups until after the 2016 election cycle and the FEC content to sit on the sidelines, the Justice Department is seen as the only federal agency that might attempt to shed some light on their activities.

Fred Wertheimer, the president of Democracy 21 and a longtime advocate of campaign finance reform, has asked the Justice Department to do just that, with an emphasis on political activities associated with Rubio's campaign. "Secret money is the formula for corruption," Wertheimer told the Times. "It's the influence buyer's dream."

Albert R. Hunt. "'Dark' Funds May Bode Ill in 2016 Election." New York Times 01/03/2016

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