Roosevelt Institute | Cornell University

The Dark Side of Campaign Financing

By Michele PothenPublished November 11, 2015

With the presidential primary elections approaching and candidate blocs forming, campaign financing has proved to be a crucial component more than ever before. In coming into this election, it is important to note the terminology within campaign financing and the established differences-- primarily between PAC funding and dark money.

By Michele Pothen 11/11/2015
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    With the current presidential election looming, there has been a current focus on campaign funding and transparency. With big money being funneled into presidential campaigns, the public is left to wonder exactly who politicians are meant to serve. The primary component of this issue is the current policy in place regarding campaign financing, specifically PACs. However, as a result of Citizens United v. FEC, corporations and unions can spend an unlimited amount of fund in support or opposition of a candidate.  With this new element, dark money began to rise in campaigns. Dark money can be defined as funds given to nonprofit organizations who have the ability to make unlimited donations to campaigns. Both methods are crucial aspects to be considered in the current election and introduces the questioning of campaign financing to the public. This passage then aims to differentiate the two financing forms and address current policy in relation to campaign funding.

    A PAC is a political action committee that collects monetary contribution from members and then donates said funds to a particular political candidate. The issue associated with such a process is that it brings in the question of outside influence on a political agenda. If a certain group gathers a large amount of money for a candidate's campaign, the group is expecting a form of compensation if the candidate is elected to the position. While such an interaction is not solidified or binding, such a relationship is automatically assumed within the PAC. A key characteristic of a PAC is that it is a committee that is under the supervision of the Federal Election Commission. Additionally, a PAC does disclose its contributors and reports said contributions and expenditures. By this there is some transparency as to who is supporting candidates and if the elected candidate is implementing the organization's view in his/her policy. Since PACs have no limit on campaign contributions, they can easily develop into Super PACs that are not allowed to directly contribute to political candidates however still play a crucial role for large campaigns.

    While Super PACs can be an issue in an election as they indicate sways of a candidate's allegiance, the real problem lies in the development of dark money. While Super PACs come with some transparency, dark money does not. To be clear, dark money is a part of Super PACs and is categorized as a type of contribution. The main caveat with it is its lack of disclosure as to who is providing the actual donations. Technically, dark money groups are categorized as social welfare groups and do bear the requirement of having a majority of their expenditures be dedicated to social welfare activities (Huffington Post). The loophole, however, is the fact that specific donors can funnel money to campaigns through said groups and mask their names as a result.

    An example of this is the Koch Brothers in the 2012 election. The billionaires had developed a large network of these dark money groups and utilized them to bring money into Mitt Romney's campaign. In relation to the current election, dark money has particularly seen to be an issue within the Republican Party. Marco Rubio has been known to have a large amount of money being made available to his campaigns through social welfare groups—specifically to the tune of six million dollars. Trump has come out condemning said campaign financing strategies and while Bush has spent time attacking Rubio's funds, it is known that he has a social welfare group supporting him as well.

    The fundamental issue with these financing strategies lies in the problem of transparency. It is necessary to know exactly what big names are supporting which candidates as it can be used to discover biases or allegiances in the candidate's policy plans.  Dark money is a political power move that questions the ethics of campaigns and gives a larger voice to the wealthy in government planning. Such financing is allowed by current policies in place and has been strengthened by Supreme Court rulings. The issue has elicited a response from few candidates who call for the elimination of the possibility of dark money groups and increasing clarity in campaign funds. Dark money groups should be subjected to the same transparency standard as typical Super PAC donors, thereby revealing the sources of strong influences in political campaigns.