Dark Money in Politics: Understanding its Impact, Origins, and How to Combat It

Elections & Politics Policy Brief #71 | By: Inijah Quadri | March 28, 2023

Header photo taken from: brennancenter.org/Getty/Shutterstock/BCJ

Policy Summary

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In recent years, there has been a growing concern about the influence of money in politics, particularly in the form of “dark money.” “Dark money” refers to political spending by groups that are not required to disclose their donors. Dark money can be used for a variety of political activities, including advertising campaigns, direct mail campaigns, and issue advocacy.

These groups are not required to disclose their donors because they are classified as non-profit social welfare organizations under section 501(c)(4) of the Internal Revenue Code, which allows them to keep their donors’ identities private. This form of political spending has become increasingly prevalent in the United States, and its impact on democracy is a cause for concern.

Other organizations, like political action committees (PACs), are required to disclose their donors because they are specifically designed to support or oppose political candidates, while 501(c)(4) organizations are primarily intended to promote social welfare.

This article aims to provide a comprehensive overview of dark money in politics, its origins, and its effects, as well as explore ways to combat it.

Photo taken from: publicintegrity.org

The Origins of Dark Money in Politics

The use of dark money in politics is not a new phenomenon in the United States. Dark money has been used since the 1970s, but it gained prominence after the Supreme Court’s 2010 Citizens United decision. In this case, the court ruled that corporations and unions have the same First Amendment rights as individuals when it comes to spending money on political campaigns. These rights include the freedom of speech, which allows for the expression of ideas, opinions, and support for (or opposition to) political candidates or issues, including through financial contributions.

This decision opened the door for unlimited spending by corporations and unions, and it also paved the way for the rise of super PACs (Political Action Committees). Super PACs are independent political organizations that can raise and spend unlimited amounts of money on political campaigns, as long as they do not coordinate with a candidate’s campaign.

The 2010 Citizens United decision also allowed for the creation of dark money groups, which are non-profit organizations that can spend unlimited amounts of money on political campaigns, without disclosing their donors. These groups are known as 501(c)(4) organizations, after the section of the Internal Revenue Code that governs their tax status. These organizations are primarily intended to promote social welfare, but they are also permitted to engage in limited political activities, as long as those activities do not constitute their primary purpose. Due to this classification, they are not required to disclose their donors, which differentiates them from other types of political organizations, like PACs.

The Impact of Dark Money on Politics

Dark money has a significant impact on politics, as it allows wealthy individuals and corporations to have an outsized influence on the political process. By spending unlimited amounts of money on political campaigns, these groups can sway public opinion and influence the outcome of elections. Some campaigns and candidates have gotten help from dark money. For example, President Biden is reported widely to have gotten a lot of help from dark money groups for the 2020 presidential election.

The use of dark money also undermines transparency in the political process. When donors can give money to political groups without disclosing their identity, it becomes difficult to determine who is behind a particular political campaign. This lack of transparency makes it difficult for voters to make informed decisions about candidates and issues.

Furthermore, dark money can give the appearance of impropriety. When candidates receive large amounts of money from unknown sources, it can create the perception that they are beholden to these donors, rather than to their constituents.

The rules governing the size of regular campaign contributions vary depending on the type of organization and the election. For example, individuals can contribute about $3,000 per election to a federal candidate, $5,000 per year to a PAC, and about $40,000 per year to a national party committee. These limits are subject to change and are adjusted for inflation every election cycle.

Photo taken from: newyorker.com/Mark Henle/The Republic/Reuters

How to Combat Dark Money in Politics

There are several ways to combat dark money in politics, including:

a. Disclosure Laws

One way to combat dark money is to strengthen disclosure laws. This would require political groups to disclose their donors, making it easier for voters to understand who is behind a particular political campaign. This could be done at the federal level, but it could also be done at the state level.

Several states have already taken steps to increase transparency in the political process. For example, California requires all political advertisements to disclose their sponsors, and Maryland also pioneered local laws that required online platforms to disclose the sponsor of any political ad.

b. Public Financing

Another way to combat dark money is to provide public financing for political campaigns. This would give candidates an alternative to relying on wealthy donors and corporations for funding. Public financing can level the playing field and reduce the influence of special interests in the political process.

c. Overturning Citizens United

Another way to combat dark money is to overturn the Citizens United decision. This would require a constitutional amendment, which is a lengthy and difficult process. However, several states and cities have passed resolutions calling for an amendment to overturn Citizens United.

Alternatively, the Supreme Court itself could overturn Citizens United in a future case that challenges the precedent set by the decision. This has happened before with other landmark cases, such as when the Supreme Court overturned its previous ruling in Plessy v. Ferguson with the Brown v. Board of Education decision.

d. Advocacy and Education

Finally, advocacy and education can play a role in combating dark money in politics. Educating the public about the impact of dark money and advocating for stronger disclosure laws and public financing can help build momentum for reform.

Conclusion

In conclusion, Dark money in politics is a significant issue that undermines transparency and democracy, as it allows wealthy individuals and corporations to have an outsized influence on the political process. To combat dark money, strengthening disclosure laws, public financing, overturning Citizens United, and advocating for reform are all viable options. These solutions can help reduce the influence of special interests in the political process and promote true democracy. It is important for citizens to stay informed and engaged in the fight against dark money in politics.

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