A donor secretly transferred $1.6bn to a
Republican political group. Because of America’s
lax laws, the donation was never disclosed in
any public record or database
By David Sirota and Joel Warner
September
03, 2022:
Information Clearing House
-- "Guardian"
-- This
week,
the Lever,
ProPublica and
the New York Times discovered the largest
known political advocacy donation in American
history. We exposed a reclusive billionaire’s
secret transfer of $1.6bn to a political group
controlled by the Republican operative Leonard
Leo, who spearheaded the construction of a
conservative supreme court supermajority to
end abortion, block government regulations,
stymie the fight against climate change and
limit voting rights.
This anonymous donation –
which flowed to a tax-exempt trust that was
never disclosed in any public record or database
– was probably completely legal.
Whether you support or
abhor Leo’s crusade, we should be able to agree
on one larger non-partisan principle: such
enormous sums of money should not be able to
influence elections, lawmakers, judicial
nominations and public policy in secret. And we
should not have to rely on a rare leak to learn
basic campaign finance facts that should be
freely available to anyone.
Unfortunately, thanks to
our outdated laws, those facts are now hidden
behind anonymity, shell companies and shadowy
political groups. America is long overdue for an
overhaul of its political disclosure laws – and
news organizations in particular should be
leading the charge for reform.
In the early 1970s, leaks
and shoe-leather reporting by news organizations
uncovered the Watergate scandal – the modern
era’s foundational dark money exposé. That
debacle
birthed the original federal disclosure laws
and a golden age of journalism. For a time, the
new statutes allowed campaign finance reporting
to become systematic, methodical and based on
required disclosures, rather than sporadic,
random and reliant on the goodwill of courageous
whistleblowers.
A half-century later,
however, the dark money practices of 50 years
ago have again become normalized. In 2020 alone,
more than
$1bn worth of dark money flooded around weak
disclosure rules and into America’s elections,
financing Super Pacs, ad blitzes, mailers and
door-knocking campaigns. As millions of votes
were swayed, reporters and the public had no
knowledge of the money sources, or what policies
they were buying.
Heading into the 2022
election, the
situation is getting worse. The two parties’
major
Senate and
House
Super Pacs are all being funded by anonymous
dark money groups that are not required to
disclose their donors.
These problems aren’t
unique to the campaign arena. Front groups are
also shaping public policy, leaving reporters
unable to tell voters who exactly is funding
what. In the last few years, an anonymously
funded group used post-election
ads to successfully pressure lawmakers to
water down landmark healthcare legislation
designed to eliminate so-called “surprise”
medical bills.
Similarly, Leo’s
anonymously funded network spent
tens of millions to boost the nomination
campaigns of three conservative supreme court
justices, after leading a campaign supporting
Republicans’ refusal to hold a vote on Barack
Obama’s 2016 high court nominee, Merrick
Garland.
To be sure, news outlets
can still cover the shrinking portion of the
political finance system that still discloses
some money flows to politicians, lobbyists and
advocacy groups. And thankfully, there are
occasionally disclosures like the Leo leak,
which provide a fleeting glimpse into the real
forces influencing sweeping policy decisions.
But for every sporadic
leak, there are scores of secret donors
systematically funneling ever more dark money
into elections and legislative campaigns without
ever being exposed – and they are reaping the
rewards of corrupted public policy.
That’s the bad news. The
good news is there is already a legislative
blueprint for reform.
The
Disclose Act, sponsored by the Democratic
senator Sheldon Whitehouse, would force dark
money groups to disclose any of their donors who
give more than $10,000, require shell companies
spending money on elections to disclose their
owners, and mandate that election ads list their
sponsors’ major contributors. These requirements
would extend not only to election-related
activity, but also to campaigns to influence
governmental decisions – including judicial
nominations.
A separate Whitehouse
bill would additionally require donor
disclosure from shadowy groups lobbying the
supreme court through amicus briefs designed to
tilt judicial rulings without letting the public
know which billionaire or CEO’s thumb is on the
scale. And other pending
legislation would finally allow the
Securities and Exchange Commission to require
major corporations to more fully disclose their
political spending.
Journalists should
proudly advocate for laws like these, which
allow us to tell the public what its government
is doing. Our industry has
done
that before in
defending open records laws, and we must do
it now in advocating for new campaign finance
disclosure rules.
In practice, that means
reporters elevating the transparency issue and
demanding answers from politicians about where
they stand on disclosure laws – rather than
ignoring or downplaying the rising tide of dark
money now shaping every public policy in
America.
It means newspaper
editorial boards advocating for campaign finance
reform.
It means media
organizations lobbying for stronger disclosure
laws at the federal, state and local levels.
It means the journalism
industry participating in – and at times leading
– this fight, rather than using objectivity as a
cop-out.
This battle to update
campaign finance disclosure laws and bring
sunlight to the darkest of dark money already
faces powerful opponents. In recent years, the
US Chamber of Commerce and
Koch Industries – which represent some of
America’s biggest dark money spenders –
have been
lobbying against the Disclose Act,
preventing it from advancing for more than a
decade.
The Koch network recently
convinced the supreme court’s conservative
bloc to strike down a California law requiring
non-profit dark money groups to at least
disclose their major donors to state tax
regulators, after spending to back some of those
justices’ confirmations to the court.
Most recently,
conservative groups and Republican state
attorneys general have been trying to block a
proposal to force companies to disclose
greenhouse gas emissions by
arguing that it is unlawful “compelled
speech” – a preview of the argument they might
use against new campaign finance transparency
legislation.
Just as alarming,
segments of the journalism industry itself have
opposed transparency efforts. The
National Association of Broadcasters (NAB) —
which represents the major media outlets making
huge profits off of dark money ads — tried to
block a rule at the Federal Election Commission
a decade ago to require TV and radio stations to
disclose ad buys from political groups,
arguing it would cost them advertising
revenue.
The NAB has
recently successfully
opposed the Federal Communications
Commission’s requirements that broadcasters
disclose when foreign governments sponsor
material. NAB is
right now lobbying on the Disclose Act.
But this week’s
revelations about history’s largest dark-money
donation should be an alarm telling us that the
status quo must change – and indeed it can
change, even within the confines of the supreme
court’s own precedents.
In the landmark Citizens
United ruling that unleashed the modern era of
big money politics, the majority noted that
while it was unwilling to permit political
spending restrictions, it still held that
“government may regulate corporate political
speech through disclaimer and disclosure
requirements”.
Those requirements are so
desperately needed now – for the free press to
play its vital role, and for voters to make
informed decisions when they go to the polls.
But the only chance it
will happen is if news outlets and reporters get
off the sidelines and enter the battle to secure
what they need to do their jobs – and what we
all need to preserve our democracy.
- David Sirota is an award-winning
journalist who founded the investigative
news outlet
the Lever
- Joel Warner is the Lever’s managing
editor.
Views expressed in this article are
solely those of the author and do not necessarily
reflect the opinions of Information Clearing House.
in this article are
solely those of the author and do not necessarily
reflect the opinions of Information Clearing House.
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