September 18th, 2012
08:25 PM ET

The Dark Money Shuffle: Court ruling keeps political donations a secret

A federal appeals court Tuesday overturned a ruling that would have tightened disclosure rules for political donations. The decision may make it even harder to follow the money trail at a time when record amounts of money are being poured into the election through Super PACs and other groups.

OutFront tonight: CNN Contributor John Avlon is writing a series of reports on the influx of cash into this year's campaigns for the Daily Beast in partnership with the Center for Responsive Politics.

John Avlon is also a CNN contributor and member of the OutFront political strike team.


The Dark Money Shuffle

Back in 2010, Justice Anthony Kennedy—writing for the majority in Citizens United, one of the cases that helped pave the way for the explosion of political spending we are now seeing —envisioned a new golden age of campaign finance, in which instant transparency would compensate for the massive influx of cash into our politics.

“A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today,” he declared. “Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

It hasn’t quite worked out that way. While super PACs have to declare their donors and expenditures, 501(c)(4)s—which are empowered to spend up to half their money on politics—almost never have to disclose their donors. Eight of the country’s twenty largest Super PACs now have affiliated 501(c)(4)s. And, thanks to an appeals court decision yesterday, the modest requirement that 501(c)s disclose their donors when they spend the money on electioneering communication—issue ads aired within 60 days of an election—has been overturned. (The Federal Election Commission now has the option to create new regulations, but until it does, disclosure for election spending is not required.) And so, dar money is flowing through our airwaves in the form of political ads that purport to be "social welfare" expenditures – avoiding transparency and accountability in the process.

“The C4 is the untold story of this election,” says Melanie Sloan, executive director of the non-partisan Citizens for Responsibility and Ethics in Washington. “I imagine that even more money will be raised by the C4s than super PACs … There’s probably hundreds of millions of corporate dollars being funneled into these C4s to influence elections, and Americans have no idea.”


Recommended: The Super PAC Economy: 2012 is the most expensive election ever

Filed under: 2012 Election • Campaign Finance • Politics
soundoff (One Response)
  1. Joey at Purdue Univ

    I don't know who's in charge of communications for these SuperPACs, but they gotta realize there's a cost of human capital to this stuff. Whoever it is: Cool it.

    I read that on Friday, someone shot up the Obama campaign office in Denver while people were inside. Since Michigan & Ohio are "critical," I have friends who volunteer for both Obama & Romney. In a lot of cases, these are 19-30 year old volunteers who are doing this solely out of patriotic optimism. Is that really what the upper management of these SuperPACs & National Committees want, to turn this into a literal crossfire over ideology?

    Both these candidates are cool headed, methodical, Harvard law guys who've enacted health plans with an individual mandate & plan to lower corporate tax rates to 20%, so let's not kill each other over "how many angels can you fit on the head of a pin" points, or enrich that would profiteer off of such internal vitriol.

    October 14, 2012 at 9:07 am | Reply

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