Table of Contents
- 1 ‘This is not the time to be a purist’
- 2 Democrats embrace dark money in their effort to oust Trump
- 3 ‘We’re running against a guy who was actually seeking support from foreign governments.’
- 4 Soros money, or not?
- 5 ‘Everyone is for disclosure until they have to disclose’
- 6 A job for Congress and a Biden administration?
- Democrats including Joe Biden have railed against dark money but are now embracing such funds — whose original source is unclear — in a race to oust President Donald Trump.
- Pro-Biden super PACs have so far accepted $45 million that can’t be traced to an actual person, according to an Insider analysis of federal election records.
- That’s already about seven times the amount of dark money the pro-Hillary Clinton super PACs took during the 2016 presidential campaign.
- “If you want to remove Donald Trump, you push all the buttons you can,” said Steve Israel, a former New York congressman who ran Democrats’ House campaign operations.
- Republicans have long weaponized secret political money. Organizations supporting Trump and GOP congressional candidates have collected millions in the 2020 race from corporations, conservative nonprofits, and anonymous individuals.
- Some Democrats say significant reform of dark-money rules will come only through action in Congress and a new administration. But they argue Biden must first do everything he can to win the White House.
- Visit Business Insider’s homepage for more stories.
The smiling family, fashioned for the ’50s, exudes American dreaminess.
Images flash as the advertisement rolls: A crucifix. A Boy Scout. Baseball. Promises are made for new jobs, more manufacturing, and a stronger economy.
As orchestral strings, initially soft, build through a soaring crescendo, voices cheer while a military helicopter rises toward the Washington Monument.
This is not jingoistic schlock praising President Donald Trump. It’s part of a multimillion-dollar political ad campaign extolling Joe Biden, the president’s Democratic opponent who gets relentlessly caricatured as an atheistic Marxist bent on banishing the police and banning suburbs — when he’s not too addled and “sleepy” to escape his own basement.
Beyond the aesthetics, what’s perhaps most interesting about the ad is figuring out who paid for it.
In its push to topple Trump, the Democratic super PAC behind this image-polishing spot won’t fully disclose the funder. That’s despite Biden’s own pledge to stop political groups from “hiding” behind dark money, the secret currency created in the wake of the Supreme Court’s landmark Citizens United decision from 2010.
The situation illustrates an uncomfortable truth for liberals here in 2020 as the former vice president prepares to accept his party’s presidential nomination on Thursday. Democrats, it turns out, are plenty willing to mortgage a core value to vanquish Trump and stem the existential threat they believe he poses.
This election cycle, anonymous donors have so far pumped several pro-Biden super PACs with a combined $45 million worth of dark money, which is largely funding television ads, social-media messaging, and opposition research designed to make Trump a one-term president, according to an Insider analysis of Federal Election Commission records.
That’s already about seven times the amount of dark money that pro-Hillary Clinton super PACs took in during the entire 2016 presidential campaign, which ended with Democrats’ stunning loss to Trump.
‘This is not the time to be a purist’
Of the more than two dozen prominent Biden backers Insider interviewed this month, most agreed that Democrats should spend whatever sort of money was necessary — even funds from untraceable, unaccountable sources typically favored by Republicans — to help him win. Some party leaders worry that voting obstacles like long lines and mail-in ballots, as well as the Democratic base’s lukewarm enthusiasm for Biden, necessitate this no-holds-barred approach to bolstering the 77-year-old’s candidacy.
“This democracy is sacred and too amazing to sacrifice its existence,” said Moe Vela, who served as Biden’s vice-presidential senior adviser and now runs a consulting firm. “This is not the time to be a purist.”
Systemic campaign-finance reform should and would come later if Biden wins the presidential election, they say.
“I believe in maximum transparency, but I think that should apply to all, not just the Democrats,” said Rep. Mark Takano of California, a Democrat who has sponsored or cosponsored several campaign-money-related bills and constitutional-amendment resolutions in the House. “If the Democrats come into power, they will act.”
The Biden campaign declined to answer Insider’s specific question about whether pro-Biden super PACs and nonprofits should fully disclose their donors to voters. But a representative for the presumptive Democratic nominee said in a statement that Biden was committed to broad political-money reforms.
“Throughout his career in public service, Vice President Biden has been unequivocal about the need to free our democracy from the corrupting influence of big money and to publicly finance our elections,” the Biden representative Rosemary Boeglin said in an emailed statement. “After four years of Donald Trump, head of the most corrupt presidential administration in modern history, the American people are rightly fed up. As president, Joe Biden will reform the campaign-finance system so that it amplifies the voices of the public, not the powerful.”
The Trump campaign did not respond to several requests for comment about dark money in the 2020 campaign.
Democrats embrace dark money in their effort to oust Trump
On paper, there’s little comparison to be drawn between Democrats and Republicans when it comes to dark money.
Most Republicans have wholeheartedly embraced dark money since the Supreme Court’s 5-4 decision in Citizens United v. FEC that supercharged its use. GOP leaders and rank-and-file members alike make no apology for it, arguing that political money, including anonymous donations, is fuel for constitutionally protected free speech.
Trump’s broad reelection effort, along with the Republican congressional slate, is awash in secret cash, with supportive organizations collecting millions of dollars from corporations, conservative nonprofits, and anonymous individuals.
Last month, the president attended a fundraiser at his Bedminster, New Jersey, golf club with the pro-Trump super PAC America First Action. The scene illustrates how the endless race for political money has matured; in 2011, Mitt Romney declared before securing the GOP presidential nomination that he’d “go to the big house” if he coordinated with a super PAC “in any way, shape, or form.”
Democrats, meanwhile, have fought both secret political cash, trying — and so far largely failing — to corral it through legislation in Congress and anti-Citizens United constitutional amendments. They’ve blasted it as “corrosive” and “corrupting,” the tool of powerful puppeteers seeking to persuade the body politic without scrutiny. They’ve portrayed conservative dark-money patrons as anti-democratic villains.
“We support requiring groups trying to influence elections to reveal their donors so the public will know who’s funding the political ads it sees,” Democrats wrote in their 2012 national platform that accompanied President Barack Obama’s reelection campaign.
“We need to end secret, unaccountable money in politics by requiring, through executive order or legislation, significantly more disclosure and transparency — by outside groups, federal contractors, and public corporations to their shareholders,” the Democrats’ 2016 platform reaffirmed as Clinton ran for the White House.
By the time the Democratic presidential race hit its stride in mid-2019, many of the more than two dozen candidates consistently performed feats of cash contortion in an effort to one-up one another.
Some wouldn’t take money from lobbyists. Others were especially opposed to donations from fossil-fuel interests. Sen. Elizabeth Warren swore off big-dollar fundraisers. Sen. Bernie Sanders disavowed support from super PACs. Michael Bloomberg, a billionaire, refused any campaign contributions but those from his own pocket.
Biden’s own presidential campaign platform now includes a section titled “End dark money groups.” It lambastes nonprofit organizations that are “spending hundreds of millions of dollars on federal and state elections without disclosing their donors.”
In practice, Democrats have nevertheless ignited a dark-money machine that’s racing across all levels of the 2020 election politics, particularly at the presidential level.
It’s a detail Democrats fail to announce in press releases and stump speeches, and one many average voters may never realize.
And even voters sufficiently motivated to investigate liberal super PACs’ full finances will find the exercise difficult, if not futile.
‘We’re running against a guy who was actually seeking support from foreign governments.’
Unite the Country, the super PAC that created the advertisement lauding Biden, has disclosed the names and locations of most of its 2020 election donors.
But its single largest contribution — $3.5 million on June 30 — doesn’t come from a specific person.
Instead, it comes from the Sixteen Thirty Fund, a social-welfare nonprofit corporation based in Washington, DC, that takes its name from the year Gov. John Winthrop of the Massachusetts Bay Colony delivered his “City Upon a Hill” speech.
The rub? The Sixteen Thirty Fund, which raised more than $143 million in 2018, according to its 2018 tax filing with the IRS, won’t publicly say who funds it.
Three anonymous individuals gave the Sixteen Thirty Fund eight-figure contributions in 2018 — the largest $51.7 million, according to IRS records. Another 13 individuals made anonymous seven-figure contributions, while 17 individuals made six-figure contributions.
Led by its executive director, Amy Kurtz, a veteran of liberal-minded organizations such as the National Education Association and the League of Conservation Voters, the Sixteen Thirty Fund says it exists to “help nonprofit leaders and advocates confront a wide range of challenges,” including climate change, economic opportunity, and issues of criminal and racial justice. In recent years, its helped fund dozens of predominantly left-leaning organizations and political initiatives, including Planned Parenthood, America Votes, and the Women’s March Inc.
Federal records also indicate that the Sixteen Thirty Fund has given Unite the Country and three other pro-Biden super PACs — Priorities USA Action, American Bridge 21st Century, and the League of Conservation Voters’ LCV Victory Fund — a combined $16 million entering the summer.
Kurtz told Insider the Sixteen Thirty Fund supported and had “lobbied in favor of reform to the current campaign-finance system, but we are equally committed to following the current laws to level the playing field for progressives in this election.”
Does the Sixteen Thirty Fund consider money it gives super PACs that support Democrats to be dark money?
“No,” Kurtz said without elaborating.
Department of Labor records show that several labor unions gave the Sixteen Thirty Fund five- or six-figure contributions in 2018 and 2019, including the National Education Association, the Service Employees International Union, and the American Federation of State, County and Municipal Employees. The Open Society Policy Center, a nonprofit connected to the billionaire investor and Democratic megadonor George Soros, contributed $772,000 in 2013. Other dark-money groups have contributed. But the paper trail largely ends there.
Because of the Citizens United v. FEC and subsequent SpeechNow.org v. FEC court decisions, super PACs may legally raise unlimited amounts of money from individuals, corporations, unions and nonprofit groups organized as business leagues or social-welfare outfits, as the Sixteen Thirty Fund is.
Other Democratic dark-money funders abound this election.
For example, American Bridge 21st Century, also known as AB PAC, is a pro-Biden super PAC specializing in opposition research, video tracking, rapid media response, and big media buys. It frequently decries Republicans’ “dark money donors” and “dark money super PACs” in fundraising messages to its supporters.
In addition to $2.2 million in contributions from the Sixteen Thirty Fund, FEC records indicate American Bridge 21st Century has also accepted about $8.1 million in contributions from the American Bridge 21st Century Foundation, its sister social-welfare nonprofit that doesn’t disclose its donors.
Similarly, Priorities USA Action, which has endlessly lashed Trump with negative television and digital ads, has so far during this election cycle accepted $3.5 million from the Sixteen Thirty Fund and $6.5 million from its nondisclosing sister nonprofit, Priorities USA. It has also received other transparent, seven-figure contributions from the likes of the asset manager Donald Sussman, the billionaire hedge fund manager James Simons, and JB Pritzker, the Illinois governor whose family owns the Hyatt hotel chain.
And the pro-Biden, environmentally focused LCV Victory Fund super PAC has this election raised almost half of its roughly $34 million from dark-money entities, including $8.5 million from its parent nonprofit, the League of Conservation Voters.
The Priorities USA Action spokesman Josh Schwerin declined to answer specific questions about his super PAC’s funding, saying the group was “grateful for the support of progressive organizations and are focused on defeating Donald Trump.”
Max Steele, an American Bridge 21st Century spokesman, declined to answer questions about contributions the super PAC received from organizations lacking transparency about their funding sources.
“American Bridge 21st Century discloses all of our donors with the FEC,” Steele said. “Our reports are filed quarterly and are available online for the public to review.”
With the billionaire industrialist Charles Koch, Big Oil, and fossil-fuel interests pouring money into the 2020 election, “you don’t go into a crisis with one arm tied behind your back — doesn’t make any sense,” said Pete Maysmith, the League of Conservation Voters’ senior vice president of campaigns. “We’re going to raise resources and spend resources to communicate with voters,” he continued, adding: “We’re talking about the future of our planet, and we’re talking about poor communities where people are impacted daily, weekly, monthly in real and devastating ways.”
Steve Schale, the CEO of Unite the Country, said his super PAC was “playing by the rules” and referred a question about the Sixteen Thirty Fund back to the nonprofit. Schale said his organization rejected money from a tobacco interest early in the campaign but generally accepted legal contributions from persons or groups “whose goals are aligned with ours.”
“We’re running against a guy who was actually seeking support from foreign governments,” Schale said of Trump. “We want the resources to beat him.”
Soros money, or not?
Then there’s Democracy PAC, a super PAC that this election has raised nearly $52 million and counting.
Democracy PAC doesn’t spend its money on ads or opposition research. Instead, it gives its money away to other super PACs that do. It’s so far directed more than $10 million to pro-Biden super PACs and millions more to groups angling to elect Democrats to Congress and state offices.
According to FEC records, Democracy PAC has two funders. One is Soros, the billionaire Democratic megadonor. The other — the Fund for Policy Reform — is a social-welfare nonprofit.
IRS records indicate the Fund for Policy Reform, of which Soros is chairman, accepted one contribution worth $750 million in 2018. The donor is a “person,” the IRS record states, but the person’s name is not disclosed.
When asked who funded the Fund for Policy Reform, the Soros representative Michael Vachon confirmed to Insider that Soros alone was the “original source of funds for the Fund for Policy Reform and there are no other sources or funders.” He continued: “So Soros equals Fund for Policy Reform equals Democracy PAC.”
Democratic super PACs that accept dark money represent a curious and decade-long trend in national politics, according to the nonpartisan Center for Responsive Politics.
During the 2020 election cycle, non-candidate political committees and nonprofits that disclose only some of their funding account for more than 43% of political committee and nonprofit spending.
That’s up from just 15% during the 2016 election and 29% during the 2012 election.
In 2019 alone, organizations that don’t disclose their donors steered $65 million into federal super PACs across the board, per OpenSecrets.org.
Meanwhile, direct spending by politically active nonprofit groups that don’t disclose any of their funders has been on a steady slide downward. These groups are increasingly filtering their money through super PACs.
‘Everyone is for disclosure until they have to disclose’
Many Democrats generally argue the same two talking points about dark money: They need it because they cannot “unilaterally disarm” when fighting Republicans. And, they say, Democrats are playing by the current rules but will quickly change them if voters empower them to do so.
“If you want to remove Donald Trump, you push all the buttons you can — you use all the tools you can,” said Steve Israel, the former New York congressman who also chaired the Democratic Congressional Campaign Committee.
But several other prominent Democrats, liberals, and advocates for strict campaign-finance rules told Insider that’s disingenuous.
They also expressed varying degrees of disappointment that Biden disclosing big-dollar bundlers of late. They’re also upset he hasn’t more prominently spoken out against secret money that’s benefiting him. That includes demanding the nominally independent super PACs that support him either voluntarily disclose who their money is coming from or straight-up reject such donations.
Kimberly Reed, who directed and produced the documentary “Dark Money,” a 2018 Sundance Film Festival official selection, argued that the political advantage Democrats would gain from publicly and proudly rejecting secret political funding would outweigh the lost value of the secret money itself.
Reed said doing so would give Biden “the moral high ground, clearly, against the most corrupt administration in my lifetime.”
New Jersey Assemblyman Andrew Zwicker, a Democratic Biden supporter, last year cosponsored an anti-dark-money bill that Democratic Gov. Phil Murphy reluctantly signed into law. Zwicker’s dark-money opposition agitated the League of Conservation Voters, which declined to endorse him last year.
Zwicker attributes the action of LCV, the environmental group now backing Biden with millions of dollars, to his attempt to force it and other politically active groups to be more transparent. (A state LCV official said the non-endorsement was due to “a number of factors.”) A federal court overturned the Garden State’s dark-money law in March.
“Everyone is for disclosure until they have to disclose. Show courage. Use the bully pulpit to demand transparency,” said Zwicker, who quickly noted his comment applied to Biden supporters, too.
Cooper Teboe, a Democratic fundraising consultant who raises money for the pro-Biden super PAC Unite the Country and several congressional campaigns and state Democratic Party committees, said he’d like Democrats to win Congress and the White House and “make so many changes that it puts me out of a job.” But until then, he said, “every single contribution should be disclosed, and we should hold ourselves to a higher standard as a party that wants to be the party of moral clarity.”
“We’re talking about justice, and we’re talking about representation so much this year,” said Robert Maguire, the research director of Citizens for Responsibility and Ethics in Washington. “Dark money is absolutely an issue about justice and representation, and there’s a message of the moment that’s being lost.”
Since April, almost three in five presidential-race television ads from groups not controlled by the candidates themselves came from groups that either don’t disclose or only partially disclose their funders, according to analysis by the Wesleyan Media Project and the Center for Responsive Politics of Kantar Media/CMAG ad data.
Howie Hawkins, the Green Party presidential nominee, argued that Sanders’ unsuccessful 2020 campaign offered ample evidence that candidates could run a nationwide campaign while largely rejecting the help of super PACs, dark money, and other aid from outside their own campaign.
“Do I buy that Democrats must use dark money to win? Not at all,” Hawkins told Insider. “Trump is so dirty. He’s so guilty of hiding his money. It’s like the Democrats are saying, ‘We’ve got to be dirty, too.'”
Rep. Rodney Davis, an Illinois Republican who is the ranking member on the House Administration Committee, which oversees campaign-finance matters, says Democrats “reek of hypocrisy” when they rail against dark money but use it anyway because Republicans do too.
Davis added that voters shouldn’t forget that when Democrats controlled the White House and both sides of Congress during 2009 and 2010, no sweeping campaign-finance reform became law — even after the Supreme Court’s Citizens United decision, which landed midway through the session.
“Clearly, it wasn’t a priority for them like they would have had you believe,” he said.
A job for Congress and a Biden administration?
Will Biden backers suddenly shift tactics in August and September and make transparent political money that’s now hidden from the public?
Almost no chance, all Democrats interviewed concur.
But they also agree that a Biden administration would prioritize political-money reform alongside other “democracy agenda” items such as voting access and congressional-district gerrymandering.
True dark-money reform will come through action on Capitol Hill and the White House, said Israel, the former DCCC chairman who now works with the bipartisan campaign-finance reform organization Issue One.
“I would be a hell of a lot more frightened,” Israel said, “if Joe Biden lost, and Donald Trump won, because we ceded some kind of advantage to the Republicans this election.”