EP. 24 — THE ARMS RACE THAT WON’T END

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Weston Wamp: I'm Weston Wamp, and this is Swamp Stories, presented by Issue One.

It wasn’t long after the Cuban Missile Crisis, that the Soviets and we Americans began to realize that no one was going to come out of a nuclear war alive. That the arms race had no finish line. They called it “Mutually Assured Destruction” because it wasn’t going to end well for anyone.

It took almost 30 years until President George H.W. Bush and Soviet leader Gorbachev codified reductions in nuclear weapons. 

A scenario not altogether different is now playing out in American politics and it includes the proliferation of so-called “dark money:” Massive independent expenditures by groups, often on negative ads, where the sources of the money is undisclosed. Voters and candidates alike are left wondering who’s trying to influence the outcome of an election. The answer to the question, “who’s behind the spending?” is very often special interests. But it’s a secret — and that’s the point of dark money. 

For years, Republicans led in dark money spending — and the assumption was that their resistance to changes in policy was that they were winning.

But now the tables have turned. And for the last two cycles, Democrats have been outspending Republicans in dark money, and it’s not close. Last year, spending in support of now President Biden exceeded that spent for President Trump by a count of 5:1.

So, Republicans must be ready to call a truce in the dark money wars, right?

This is Episode 24 — The Arms Race That Won’t End

In 2018, Issue One conducted national polling and asked Republicans and Democrats whether they would support measures “requiring the full disclosure of all money being raised and spent to influence our elections.” 73% of Democrats and 62% of Republicans said that they would strongly support this type of legislation. Only 5% of Democrats and 7% of Republicans said that they strongly opposed such transparency.

Overall, for every one American who strongly opposes transparency in election spending, more than 10 Americans strongly support it. 

10 to 1. 

So it’s fair to ask how a system of so-called dark money survives such overwhelming bipartisan opposition. And remarkably, dark money is actually thriving.

Although some estimates put the amount of dark money spent that was spent in the 2020 election in the $120 million range, researchers like Anna Massoglia with the Center for Responsive Politics have developed new investigative tactics to more accurately estimate dark money spending. And now she and her colleagues at OpenSecrets.org are keeping pace with clever political consultants, who work to obscure spending on their reports by using vague verbiage and playing with the timing of deadlines. The numbers are jaw dropping. 

Anna Massoglia: Because we had partnered with this amazing organization called the Wesleyan Media Project based out of Wesleyan University, we were able to get the actual amounts of these organizations had spent on TV ads. We were working with them also to get data from Facebook. We were getting data from Google.

So we were able to see this outside spending that wasn't necessarily reported to the FEC as well as contributions from dark money groups, and by tallying all of that together, that initial amount was $750 million. What's been really interesting is this week actually we've continued to calculate those numbers, and that number has grown to more than $1 billion in dark money that flowed into the 2020 elections in the form of either political contributions from dark money groups or shell companies, direct spending by dark money groups. 

Weston Wamp: As we covered in Season 1, dark money has been a problem in American politics for over a century. It rears its head in different ways based on loopholes in the law -- where campaigns can find soft spots in enforcement.

Evidence has been growing that dark money’s influence is at an all-time high...and Massoglia’s research points to why spending is many times higher than what it is often reported by what the IRS calls 501(c)(4)s: Groups that are supposed to spend most of their time promoting social welfare, not engaging in campaigns and elections.

Anna Massoglia: Dark money groups, such as 501(c)4s can spend directly to influence the outcomes of elections by spending on things like political ads that call for the election or defeat of a candidate, or in some cases spend on ads that are within a short window before an election, and if they mention a candidate within that window before an election, they're legally required to be disclosed. However, federal election rules are full of a number of loopholes or areas where they just haven't fully hashed out the laws, where there's still a lot of gray areas and various political operatives seeking to hide the donors behind their groups are able to exploit those loopholes to get around disclosing their donors, or in some cases disclosing their spending at all. And increasingly we're seeing these groups get around disclosing their spending.

Weston Wamp: One of the areas of dark money innovation, if you will, has been on the internet because campaign laws have simply not been updated for the 21st century. 

Anna Massoglia: Increasingly digital ads are playing a big role in federal elections because... Which we are only now able to track since tech companies Facebook and Google are now voluntarily making that data available. But the FEC, the Federal Election Commission, which is tasked with oversight of campaign finance disclosure, does not treat digital ads in the same way they do traditional ads like TV or radio. If an issue ad, so if an ad that either paints a candidate in a very favorable way or attacks them, if they said, "This candidate is really good on this issue," or, "This candidate is terrible," but if they don't explicitly call for their election or defeat, even if that ad is posted on the internet and paid for and promoted within days of the election, it's not treated in the same way as an issue ad that would be run on TV. 

Weston Wamp: And that’s one big way that these groups can skirt disclosure loopholes. 

Anna Massoglia: They can spend in some cases, tens of millions of dollars on digital ads and reach voters directly, since social media has become such a key way that people are communicating, especially during a pandemic. 

Weston Wamp: Massoglia had another important realization in doing research to uncover the fuller picture of dark money.

Anna Massoglia: Digital ads aren't formed in the same way that traditional ads are. With a TV ad, You have a start, a finish, you have a video, and then you have a disclaimer at the end.

With digital ads, it's a much quicker process. You're probably scrolling through your news feed and you see this quick flash of an ad. It's not necessarily something that's going to go through the process of, "And you need to vote for this candidate," and it's going to go through the whole spiel about what election it is and everything else. It's probably going to be a quick hit to either color your image of this candidate in a good or bad way. And it needs to grab your attention, which often telling you to vote for or against someone isn't necessarily the best way to grab someone's attention if they're quickly scrolling through their newsfeed. So in many cases, these digital ads don't fit the FEC's definition of electioneering communications and oftentimes are not subject to their disclosure requirements at all. So that's been a big way we've seen these groups to skirt the rules.

Weston Wamp: What Massoglia’s research reveals, is that 501c4s are not only being used to hide the identities of donors supporting them, these organizations are also using loopholes to hide their participation in elections in the first place. 

Michael Beckel is a former investigative journalist and now the Research Director at Issue One. 

His research has been crucial to tracking the rise of dark money since the infamous Supreme Court case, Citizens United, which of course cleared the way for corporations and other special interest groups to spend unlimited funds on elections and unleashed super PACs and dark money 501c4s into campaigns.

Michael Beckel: Dark money is a major problem in politics, in part because it's often only the public who is in the dark about who is using these secretive vehicles that major donors are allowed to give unlimited amounts of money to, and that can help them curry access and influence with policymakers. Dark money groups have emerged as a major place that wealthy donors and special interest groups can curry favor in Washington, and the public is completely in the dark about which mega donors, which corporations, which labor unions, which trade associations are using these secretive vehicles to try to garner access and influence.

Weston Wamp: Republicans who resist dark money reforms in Washington, at least those who speak openly, often point to freedom of speech concerns. But as Beckel explains, the jurisprudence supports the public knowing who is trying to influence our elections and our votes.

Michael Beckel: The Supreme Court has repeatedly upheld the principle of transparency in our electioneering. If you are involved in the political arena, there is a right to know. The messages that we are hearing in the political arena are very much influenced by the messenger. If you're seeing an ad and it's paid for by an environmental group, or if you're seeing an ad that says the exact same thing paid for by an oil company, the viewers of that ad are going to perceive it very, very differently. And research has shown that a lot of these pop-up groups that have very anodyne names, very innocuous sounding names, get people to believe their messages more because they don't know where on the political spectrum they fall, what ideological or special interest might be behind that group. And so if the public had more information about who was funding some of these innocuously named groups, the public would be able to better assess the information that's coming at them.

Weston Wamp: Since we know that the Supreme Court has been clear about the need for transparency, the mystery that continues to perplex Republicans like me is why there is so little enthusiasm among Washington Republicans for fixing these loopholes. It seems to be a classic example of Washington being out of touch.

Let’s recap: Republicans across the country overwhelmingly support transparency. $168 million  in dark money was spent to benefit President Biden compared to $30 million in dark money in support of Trump. And in state legislatures all across the country, Republicans and Democrats pretty frequently partner together to combat dark money. An example is Republicans in Ohio including the GOP Secretary of State joining Democrats in support of measures to thwart dark money.

Yet in Washington, there continues to be little support among Republicans to change the system.

Now, a few Republicans stepped up in the last Congress to support bipartisan legislation to disclose some of the donors of dark money groups.

But in the current debate in our nation’s capital about how to clean up our politics, the Republicans are mostly silent.

Democrats, to their credit, remain steadfast in their commitment to clean up dark money even admitting that it’s worked to their advantage in the last two cycles.

And as you may have heard, there’s a big democracy reform package known as HR1 that passed the House on a party line vote, which includes provisions that would hold 501(c)(4)s more accountable to their intended purpose among many, many changes to ethics, campaign finance, and election administration laws. 

The button line is this: It is time, it’s past time for Republicans to get into the reform game. As Beckel points out, both parties do have incentive to fix the system so that it would better reflect the intent of our laws and in doing so it could restore some public confidence in Congress.

Michael Beckel: It's clear both Democrats and Republicans are currently benefiting from dark money in politics, so both Republicans and Democrats should have a self-interest in working to make sure that there's accountability in the system by having transparency so the public can really follow the money and ensure that, when major policy decisions are made and political decisions are made, that they're being made on their merits and not being made because of undue influence from big money coming through secretive, opaque, dark money organizations.

Weston Wamp: On the next episode of Swamp Stories, we’re going to shine a light on the once-rare and seemingly illicit dark money tactic that both the Senate Majority Leader and the Senate Minority Leader used rather unapologetically in the 2020 cycle, and it helped make it the biggest dark money year ever.

Weston Wamp: Thanks for listening to Swamp Stories, presented by Issue One, the country's leading political reform organization that unites Republicans, Democrats, and Independents to fix our broken political system. Please subscribe to the podcast and share it with your friends. Even better, rate and review it on iTunes to help us reach more listeners. You can find out more at swampstories.org. I'm your host Weston Wamp. A special thank you to executive producer, Ethan Rome, senior producer Evan Ottenfeld, producer Sydney Richards, and editor Parker from ParkerPodcasting.com. Swamp Stories was recorded in Tennessee, edited in Texas and can be found wherever you listen to podcasts.

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