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Rich Robinson

Culture of Dark Money

December 21, 2012

The Huffington Post has reported that Macau casino magnate Sheldon Adelson actually spent $150 million in Campaign 2012, not the $100 million he had promised, or threatened. Adelson and his wife gave $54 million to committees that reported to the Federal Election Commission and spent the rest through 501(c)(4) social welfare organizations and (c)(6) business associations that didn’t report his contributions. He even managed to throw a million dollar stink-bomb at Debbie Stabenow through a boutique SuperPAC created just for the occasion.

In Michigan, 43 percent of the $18 million, eight-month television advertising campaign against the Obama administration and its policies was by sponsored by non-disclosing nonprofit corporations.

Michigan’s headline state candidate race was for our Supreme Court. In that campaign, the candidates raised and spent $3.4 million. The state political parties and a DC-based nonprofit corporation spent $11 million for television advertisements about the candidates in the last two months before Election Day. That television advertising wasn’t reported in the state campaign disclosure system. Those data are available from the public files of the state’s broadcasters and cable systems.

In the Michigan Supreme Court campaign, undisclosed outspent candidates, 3-1.

This is a big problem. Nobody has the motivation to spend big money in a judicial race like a litigant with a high-stakes case in the appeals pipeline. Imagine being in court opposing the person who financed the campaign of the justice who is going to decide your case. Imagine not knowing it, so you can’t make a legitimate motion for recusal. Dark money undermines the whole premise of judicial impartiality.

We are crazy to allow this cloud of dark money over our process for selecting justices.

Don’t take my word about this. The Judicial Selection Task Force chaired by Justice Marilyn Kelly and Senior Judge James L. Ryan of the U.S. Sixth Circuit Court of Appeals recognized the peril of dark money in judicial campaigns. Conservatives and progressives on that panel made a consensus recommendation that all spending in Michigan Supreme Court campaigns should be disclosed to its source.

In case you missed it, Michigan also had the most disgraceful trial court campaign in the country this year. Five incumbents, of mixed partisan roots, and two challengers running for the Sixth Circuit Court in Oakland County raised and spent $725,000. Two non-disclosing DC-based nonprofits, Americans for Job Security and Judicial Crisis Network, paid for a $2 million media campaign attacking one of the incumbents and touting the ‘plan’ of the two challengers, who claimed to know nothing about the dark money ads. The stealth campaign failed miserably.

Most informed observers believe this was a case of a troubled, angry rich guy behind a (c)(4) mask who didn’t like the way a previous judicial decision had gone in that court. You know, “I don’t like that decision. I’m going to take you out and I’m going to leave no fingerprints.”

How would you like to be running for a judgeship with our generous allowance for unaccountable spending? Would you stand up to an angry rich guy and risk a $2 million kneecapping by an anonymous assailant?

Governor Snyder keeps an active 527 committee called the Governor’s Club. Apparently our constitutional executives feel a 527 is necessary equipment. Jennifer Granholm, Mike Cox and Terri Land had 527s. Rick Snyder, Bill Schuette and Ruth Johnson have them now.

The Governor’s Club discloses its donors and its expenditures. Since Governor Snyder took office, it has raised $563,000. It’s been used for things like a communications consultant and hotel rooms at the Republican National Convention in Tampa.

The Governor also keeps a 501(c)(4) social welfare organization –New Energy to Reinvent and Diversify (NERD). It raised $1.3 million, just in 2011. We don’t know its donors, or its purpose, beyond “social welfare”. We haven’t seen yet how early legislative successes may have boosted NERD in 2012.

Why run a (c)(4) if you have a 527? The only difference is transparency. 527s disclose itemized receipts and expenditures; (c)(4)s don’t.

Dark money is baked into policy development, too. Many observers wonder who gave the Oxford Foundation the money to support the work of Richard McLellan as he developed a proposal for commercialization of public education. It would be rational for interest groups and individuals who are in the business of commercializing public education to support such a proposal, and if they did, citizens should know it. But we have no way to know whether those who stand to gain financially are the funders behind that proposal.

We are being swamped by a toxic wave of dark money. Accountability for the money driving our politics is withering.

Once upon a time, 10 years ago, the most strident political operative you knew would say, “Just let everybody spend as much as they want, and make them disclose it.”

Remember that?

These days everybody spends what they want, but a great amount, often a majority, is not disclosed. I can prove it. Dark money is proportionally bigger in Michigan politics than it is in national politics, Crossroads GPS and Americans for Prosperity notwithstanding.

I understand that we’re living with a political culture that accepts, even celebrates dark money. Most citizens don’t. As Justice Antonin Scalia once wrote, “Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed.”

If we citizens won’t demand real accountability for money in our politics, we are surrendering governance to the invisible hand of self-serving wealth. Let’s require those who think elections and public policy are just commodities for sale to show some civic courage along with their bankroll.

Rich Robinson is the executive director of the Michigan Campaign Finance Network. The opinions expressed here are his own, not necessarily those of his employer.

December 20, 2012 · Filed under Robinson

39 responses so far ↓

  • 1 John H. Logie, Sr // Dec 21, 2012 at 10:02 am

    Spot on. Great job!

  • 2 James Brazier // Dec 21, 2012 at 2:38 pm

    This dark moneyobscures accountability during political campaigns, especially the judicial ones. To call the judicial races nonpartisan in the face of huge amounts of dark money makes them covertly partisan.

    Michigan’ electorate has a record of being duped by big spending in its gubernatorial race of 2010 and its judicial races, especially the Supreme Court. While one would hope disclosure could eliminate deceptive campaigning, it appears to be judically protected free speech to be able to hide the identity of donors. Michigan has become the social laboratory for the political conservatives in winning over voters through deception and non-disclosure. Political campaigning has gotten worse. Free speech and free press should never prohibit big spenders from being on record.

  • 3 Dick Baker // Dec 27, 2012 at 12:06 am

    Excellent – spot on

  • 4 Peter Eckstein // Dec 27, 2012 at 8:31 am

    Apparently a PAC calling itself a “social welfare organization” can accept donations that are deductible contributions on one’s federal tax return. What a farce!

    I’m all for total disclosure of donors, but is it enough to let voters know that Sheldon Adelson donated X millions of dollars to a particular candidate or cause? Does a later report that Adelson supported some sleazy ad really erase the damage done by the ad itself? Why should being a rich casino owner give one man the ability to contribute a million times as much to campaigns than most ordinary voters can afford to do? Public financing and severe limits on private spending are, as Rich would surely agree, the only answers.

  • 5 Matt Marsden // Jan 4, 2013 at 8:42 am

    Just curious as to how the organization that pays you is funded Mr. Robinson? Is is a C-Something group?

  • 6 Bill Wortz // Jan 7, 2013 at 8:21 am

    I agree with you Rich. If everyone would step to the line a declare in full light of day what they are doing in political giving and policy, the electorate would not be nearly as suspect. The people think anyone in politics are crooks. We could change this if we stopped hiding in the dark. Sunlight is the best policy for restoring confidence.

  • 7 Rich Studley // Jan 7, 2013 at 8:34 am

    Once again Mr. Robinson targets most of his criticism at Republican office holders and conservative individuals or groups that exercise their constitutional right to free speech, while largely ignoring similar conduct by Democrats, unions, and personal injury attorneys. He is not the neutral political observer he pretends to be.

  • 8 rar // Jan 8, 2013 at 3:34 pm

    It never fails to intrigue me that some politicians love “sunshine” laws until the sun is shining on their dubious practices . . . like fixing elections.

  • 9 George Corsetti // Feb 22, 2013 at 7:55 am

    Informative article. The question is: How do we change Michigan’s campaign finance system?

  • 10 Patrick L. Anderson // Mar 1, 2013 at 9:20 am

    “Dark Money” is a problem. However, Sheldon Adelson is not the poster child here. You might recall he couldn’t get his chosen candidate nominated in the Republican party, let alone elected to office.

    We should be looking a little more broadly. For example, probably the biggest “social welfare” group to enter politics in US history was just announced: “Organizing for Action.” I’ll just excerpt a part of the [Jan 18] NPR story here:

    “Leading Organizing for Action is the [Obama] campaign’s brain trust: campaign manager Jim Messina, chief fundraiser Julianna Smoot and consultant David Axelrod, among others. It’s set up as a 501c4 social welfare organization. The tax law says 501c4s cannot have electoral politics as their primary purpose. But besides its grassroots work, it appears that the new OFA would be well positioned to run so-called issue ads in the midterm elections. ”

    The dangers of dark money are real for both R and D-leaning groups. You multiply that when you combine it so closely with the power of an officeholder.

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