As part of its year-end omnibus spending bill, Congress will once again help “dark money” donors hide their identities from the public and ensure the government cannot crack down on dark money nonprofits that spend the bulk of their revenue on politics.
With Republicans set to take over the House in January, Democratic lawmakers are throwing in the towel on efforts to end the political dark money era. Provisions in the $1.7 trillion spending bill, which is often used as a vehicle to enact controversial measures because it funds critical government operations, will prohibit the Biden administration officials from doing much, if anything, to regulate dark money groups on their own for the rest of his first term.
Democrats’ surrender on dark money comes after several failed legislative efforts to compel politically active nonprofits to disclose their donors — and as dark money becomes increasingly enmeshed within our political system. Ever since the Supreme Court’s 2010 Citizens United decision allowed anonymous donations to flow into elections, both parties have become increasingly reliant on dark pools of cash to fund TV ad wars over presidential elections, congressional races, and even judicial confirmation campaigns. The situation allows ultra-wealthy, mystery donors to exert unprecedented influence in Washington.
The dark money arms race recently culminated in a historic $1.6 billion donation raised by conservative legal activist Leonard Leo. As former President Donald Trump’s judicial adviser, Leo helped select three new Supreme Court justices, while his dark money network spent tens of millions boosting their confirmations. Leo’s network also funds politicians and nonprofits bringing and boosting precedent-setting cases before the high court, like the decision overturning federal protections for abortion rights.
Democratic lawmakers made several attempts during President Joe Biden’s first term to pass campaign finance reform bills targeting dark money groups — including as recently as this fall. The most recent effort failed due to the party’s refusal to eliminate or reform filibuster rules requiring 60 votes to advance most legislation in the Senate.
As a result, Democrats have now twice failed to utilize the only two governing trifectas they’ve had since the Citizens United decision to limit the impact of the ruling.
There are several provisions, or so-called riders, attached to the omnibus bill that are designed to protect dark money nonprofits that spend on politics.
One rider once again bars the Securities and Exchange Commission from spending any funds to establish or implement any rules requiring companies to disclose their donations to political groups and politically active nonprofits, as well as payments to lobbying groups.
GOP lawmakers have included this provision in government spending bills since 2015 — with Democrats repeatedly accepting the measure as the cost of keeping government operations funded.
Democrats pushed to do away with this ban in one of their failed campaign finance and democracy reform bills. A standalone measure has sat in committee since early 2021.
Another longstanding rider included in the omnibus bill prohibits the Treasury Department and Internal Revenue Service (IRS) from issuing any new regulations regarding whether “social welfare” nonprofits, commonly known as dark money groups, qualify for their tax exemptions.
Under IRS guidelines, dark money groups are not supposed to devote more than half of their expenditures towards politics. This rider means the IRS cannot even enforce its existing weak regulations on the matter.
A third rider bars officials in the executive office of the president from requesting a determination into whether a nonprofit qualifies for its tax exemption, except in cases involving matters of national security.
“These damaging dark money poison pills are a long-time cancer on our democracy, and unfortunately they have yet to be cured,” Lisa Gilbert, executive vice president at Public Citizen, told The Lever. “We will continue the fight to remove them and enable agencies to act to grapple with the secret money surge we have seen play out ever since the overreaching Citizens United decision came down 13 years ago.”
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