Just the Facts: Dark Money

Contributed by Olga Vanucci.

What is dark money?  It’s political spending meant to influence the decision of a voter, where the donor is not disclosed and the source of the money is unknown.

Sources of dark money include:

501(c)(4):  “social welfare” organizations such as the NRA, Sierra Club, Indivisible

501(c)(5):  labor unions

501(c)(6):  business groups such as the Chamber of Commerce

Shell companies set up as LLCs can collect unlimited money from unreported sources.

The 501(c)s can collect unlimited donations from unreported donors, though a recent Supreme Court decision is changing that: donations over $200 will have to be reported. On the flip side, they cannot engage solely in politics and can only coordinate on a limited basis with campaigns.

Super PACs are not dark money in that they have to report their donors. They can collect unlimited money and can be 100% political, but cannot coordinate with political campaigns.

However, 501(c)s and shell LLCs can donate money, which they collected from unreported donors to Super PACs, turning Super PACs into dark money.

Candidate committees, political parties, and traditional Political Action Committees (PACs) are not dark money. Their donors must be disclosed, contribution limits apply and organizations are allowed to coordinate their efforts to help elect a candidate.

Dark money spending in the first year of the 2016 election cycle was 10 times more than it was at the same point in 2012. Dark money spending in 2012 was three times more than it was in 2008, and dark money spending in 2008 was 17 times more than it was in 2004.

Dark money has been almost entirely spent to favor Republican candidates.  For example, by October 2015, $4.88 million in dark money had already been spent for the 2016 election cycle. The money was spent by six groups – five conservative groups (including the U.S. Chamber of Commerce, which spent $3 million, and Americans for Prosperity, which spent $1.5 million) and one liberal group (Planned Parenthood, which spent just under $75,000).





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