Dems' 'Dark Money' Disconnect: Groups Mum on Disclosure
Sen. Sheldon Whitehouse, who has spent years railing against so-called “dark money” conservative groups for what he regards as their outsized, improper political influence, now grudgingly concedes that it’s a problem on both sides.
The Rhode Island Democrat has had little choice as recent reports from groups calling for less money in politics, such as the Washington-based Issue One, have found that left-wing nonprofits far outspent conservative ones in the 2018 midterms and are gearing up to expand their activity this cycle.
Conservatives have adamantly – and consistently – said their side’s spending is lawful and protected free speech that shouldn’t require disclosure of wealthy donors by the nonprofits engaged in it. But the left is far more divided on the transparency question as it gears up to try to deny President Trump a second term.
Not surprisingly, most of these liberal groups aren’t part of Whitehouse’s outspoken quest for immediate disclosure. Nor do they want to discuss some of their more questionable practices that are attracting new scrutiny.
That reticence hasn’t stopped Whitehouse from continuing to lambaste “shadowy” conservative groups in speech after speech while pressing his Senate colleagues to pass a bill that would require super PACs and certain nonprofits to disclose their donors.
“There is a rot in our American democracy, and there is a shadow over the halls of Congress,” the three-term senator said in a speech on the chamber floor late last year. “The rot is dark money, and the shadow is special-interest influence empowered by that dark money.”
Several Democratic presidential hopefuls, notably Vermont Sen. Bernie Sanders and South Bend, Ind., Mayor Pete Buttigieg, back up Whitehouse, promising either not to boost their candidacies through spending by outside groups with cash from secret wealthy donors or at least to disclose the big donors and the role they’re playing in the campaign.
Amid the headline-grabbing stories casting these Democrats as campaign-finance reformers, a network of dark-money donors on the left has grown over the last few years to rival – and even outspend – those on the right that Whitehouse and others have long targeted.
In the 2018 midterms, Issue One found that liberal groups accounted for 54% of the $150 million in dark money spent during that cycle while conservative groups spent 31% of those funds and nonpartisan or bipartisan groups spent 15%.
Whitehouse himself hasn’t sworn off accepting political donations from some of the biggest and most powerful dark-money groups on the left. In fact, he’s said he hopes groups like Demand Justice and the League of Conservation Voters donate to his campaign.
In his speeches and statements, the liberal lawmaker has blasted conservative groups that backed Supreme Court Justice Brett Kavanaugh’s nomination, calling out the Judicial Crisis Network, which ran ads during Kavanaugh’s contentious confirmation process. He has been far quieter about liberal groups that actively opposed Kavanaugh’s nomination in their own ad campaigns.
Whitehouse’s spokeswoman, in response to a question from RealClearPolitics, said the senator “opposes dark money regardless of the source or the beneficiary,” noting that “the majority of dark money spending in congressional races has traditionally benefitted Republican candidates.”
“He welcomes the opportunity to work with any Republican to address this critical issue,” she added.
Only one of several liberal dark-money nonprofits responded to a question from RealClearPolitics as to whether they support Whitehouse’s legislation that would require them to disclose their donors.
Future Majority, which is made up of a group of longtime Democratic operatives and co-chaired by Philip Munger, son of Berkshire Hathaway billionaire Charles Munger, plans to spend $60 million in the 2020 election aimed at Midwestern and Rust Belt states that swung to Trump in the 2016 election and are crucial battlegrounds once again.
The group’s executive director, Mark Riddle, has said Future Majority is going to use all the resources at its disposal to ensure that Democrats are viewed as representing the working class in Pennsylvania, Michigan, Wisconsin and Ohio.
Riddle also said he has no plans to voluntarily disclose the group’s donors.
“We will follow the rules as currently set and hope the rules change in the future, by passing [Whitehouse’s disclosure bill], in order to fix the system,” he told RealClearPolitics in an email.
Several other nonprofits operating under guidance from the liberal Washington-based Arabella Advisors are only recently encountering the same level of scrutiny GOP-aligned groups -- such as those funded by the U.S. Chamber of Commerce and the billionaire Koch brothers -- have faced for years.
A report by the conservative watchdog Capital Research Center said several Arabella “sister” nonprofits, including the New Venture Fund, Sixteen Thirty Fund, Hopewell Fund and Windward Fund, have formed an “interlocking network of ‘dark-money’ pop-up groups and other fiscally sponsored projects, all afloat in a half-billion-dollar ocean of cash.”
The Arabella-controlled “sister” groups brought in $582 million in 2017 alone, the report said, all under the guise of philanthropy. According to the report, the groups push IRS nonprofit rules when it comes to political advocacy on such issues as Obamacare, gun control, abortion and opposition to Kavanaugh’s confirmation.
Neither Arabella, nor its sister groups, replied to an RCP question about their response to Whitehouse’s disclosure bill.
The Washington Free Beacon this week reported that Joe Biden’s charitable foundation is filled with donations from deep-pocketed donors in the Democracy Alliance, a secretive group that actively works to keep its membership cloaked and pushed $1.83 billion into liberal causes over the past 15 years.
The Free Beacon also reported on some particularly troubling activities the Sixteen Thirty Fund appeared to have funded, including the creation of fake Facebook news groups to reach Nevada voters; their ads hit Trump and other Republicans on health care and tax issues last year.
“Trump’s new tax law will hurt Latinos the most,” reads one such ad, which appears to have been posted by “Nevada News Now.” However, “there is no world wide web URL for Nevada News Now, and if it was a Facebook group, it has since been deleted,” according to the Free Beacon.
Similar ads also were posted by a group called “Silver State Sentinel,” which does not appear to be a real news organization.
The tactics were similar to Russian disinformation efforts in 2016 that used Twitter and other social media platforms to promote content with names that sounded like news outlets such as @Seattle_Post, @MilwaukeeVoice and @ElPasoTopNews.
Facebook on Wednesday did not respond to an RCP inquiry asking whether it planned to investigate the Sixteen Thirty Fund’s activity targeting Nevada voters.
The social media giant in January said it had launched an investigation into a similar Facebook strategy to purposefully blur political lines by liberal donor Reid Hoffman, the founder of LinkedIn. Hoffman and others created a Facebook entity dubbed “News for Democracy,” which created groups with Republican- or right-of-center-sounding names that then posted left-leaning content.
Whitehouse’s spokeswoman also didn’t respond to a question about the dark-money-fueled Nevada Facebook disinformation campaign.
Conservative groups are pointing out the disconnect between Whitehouse’s and other Democrats’ calls for more disclosure and the dark-money groups’ stepped-up spending and activity.
Jenny Beth Martin, the honorary chair of the Tea Party Patriots Action, has said Whitehouse’s bill should be called the Lois Lerner Tribute Act, because it’s designed to “intimidate, harass and silence people for exercising their First Amendment rights on issues before Congress.” (Lerner was the IRS official at the center of a 2013 scandal in which conservative groups were targeted for extra scrutiny in their efforts to obtain tax-exempt status.)
Unlike political speech advocating the election or defeat of a specific candidate, Martin said “legislative speech” is protected in the Bill of Rights.
“It is speaking, assembling, and petitioning government for redress of grievances,” she said.
Martin said groups like hers are particularly sensitive to additional government regulation and intrusion after the Obama-era IRS targeting of Tea Party and other conservative groups.
“As one of hundreds of organizations that were persecuted by the IRS under Lois Lerner, we remain steadfast in protecting the privacy of our donors,” she said. “We have no problem with any organization doing the same.”
“Mr. Whitehouse’s singling out conservative organizations not only betrays hypocrisy but also highlights the lack of support he has from organizations with whom he’s ideologically aligned,” she said.