The role untraceable “dark money” can play in Connecticut elections was evident during the final weekend of the 2014 governor’s contest when a conservative nonprofit issues group based in Ohio pumped more than a million dollars into attack ads against the eventual winner, Governor Dannel Malloy.
The race between Malloy and Republican Tom Foley attracted more than $18 million in outside contributions, according to the State Election Enforcement Commission, with much of the money coming from nonprofit “issues” groups that are not required to identify their donors. This money flows to independent contribution organizations, such as Political Action Committees, who are barred from working directly with a campaign but can run ads, send out mailings and set up phone banks to support or attack a candidate or issue.
This dark money, although typically smaller amounts, can have a big impact in urban legislative districts, especially those with a history of one party Democratic control, explains state Rep. Edwin Vargas (D-6) of Hartford. “We (Latinos) are in those cities,” said Vargas, a Puerto Rican whose south Hartford constituency is heavily Hispanic.
In some urban areas, Vargas said, a conservative who ordinarily might run as a Republican will join the local Democratic party because it is “the only game in town” and enters a local primary. The intra-party candidates can agree to a spending limit, in Connecticut this may be based on the state-funded Citizen’s Election Program. They also can agree to not directly accept outside money.
Since this type of low-level primary tends to draw a small percentage of the potential voters, an infusion of a relatively small but strategically deployed dark money can have a huge impact, Vargas said, and help elect a candidate whose agenda is contradictory to the needs of the people they serve.
The term “dark money” relates to Section 501(c) “social welfare” and trade union organizations who built up war chests they funnel to independent expenditures political action committee, seemingly not connected to a campaign or the office seeker. The issues group ostensibly cannot not use a majority of its resources for politics.
The local or state PAC can use this outside money on behalf of a candidate, while only identifying to the state elections commission the name of the source group but not the original donors.
Accepting that it is hard to stop money from coming into campaigns, House Majority Leader Matthew Ritter, a Hartford Democrat, has said in regard to a current election reform bill, “We just want to know who you are.”
Vargas also outlined another dark money scenario that can give Latinos an illusionary sense of increased participation in government. This involves the use of outside money to elect candidates to the state Legislature who are Latinos but who may not be necessarily sympathetic to traditional Latino causes. “It does not bode well to have an increase in Latino representatives who do not share Latino interests,” Vargas said.
At the end of May, Vargas, whose Sixth District is largely Latino, joined with other Democrats in the state House of Representatives, where that party holds a 79-72 majority, to narrowly pass a bill aimed at curtailing the influence of outside money. This bill, An Act Concerning Campaign Finance Reform, would establish stronger disclosure rules and also help to restore public trust in candidates and elections, Vargas said.
“We have strong election laws in Connecticut,” Vargas said, “and don’t want them undermined by dark money.”
The Senate, whose membership is tied 18-18 between Democrats and Republicans, essentially tabled this bill, along with several other controversial measures, in the final rush leading up to the session’s adjournment June 7. The legislature will return to work on the state budget which must be in place by June 30 and some unfinished business also could be addressed.
A key provision in the campaign finance bill limits contributions to independent entities such Political Action Committees to an aggregate of $70,000 in a calendar year. The House measure also prohibits foreign influenced entities from making independent expenditures or contributing to an organization that does.
Republicans have generally argued that limits on dark money threaten donor privacy and amount to the government checking up on taxpayers. They also assert that dark money represents a small part of the money spent on state elections and that the Democrats want to limit free speech in Connecticut.
Dark money activities have exploded since the Supreme Court’s 2010 decision in Citizens United vs. the Federal Election Commission, which established that freedom of speech prohibits the federal government from restricting independent political expenditures by corporations, labor unions and other associations.
Vargas questioned whose rights were at risk. “Freedom of speech for the anonymous, Russia’s free speech or Putin’s free speech?” he asked.
Republican and conservative donors generally have done a better job exploiting the door opened by the Citizens United decision. Unions and a few billionaires with liberal leanings try to compete at this game but they can’t compete against the Koch brothers and wide array of billionaires that back conservative causes, Vargas said.
Among the key players are Karl Rove’s pro-Republican powerhouse Crossroads GPS, the liberal American Family Voices, groups focusing on charter or public schools, Planned Parenthood, the League of Conservation Voters.
While the so-called issues groups and PACs cannot contribute directly to a candidate or coordinate with a campaign, dark money often will be used to buy advertising, set up phone banks or even give money to political action committees. Vargas said.
The nonprofit issues groups eventually reveal their donors to the IRS and the political action committees in Connecticut submit reports to the State Election Enforcement Commission, in which case the source will be listed as the nonprofit organization but not specify how this group got its money.
The proposed state rules for campaign contributions, if enacted, are likely to be challenged by some dark money group in court based on the Citizens United decision, Vargas noted.
In 2014, About $8.5 million in outside money was used to benefit Malloy. More that $6 million of this money was sent to the Connecticut Forward PAC. Other PACs that supported Malloy received large contributions from former New York Mayor Michael Bloomberg and unions.
The state Democratic Party ran into a legal maelstrom and eventually paid a fine because Connecticut contractors barred from contributing to a state campaign donated money to a federal PAC for a voter turnout campaign that benefited Malloy.
Foley benefited from about $9 million in outside money, with $8,850,000 from Republican State Leadership Committee given to the Grow Connecticut Super PAC to support the Republican and attack Malloy. The Washington, D.C. nonprofit received large contributions from corporate and conservative donors such as Sheldon Adelson, Wal-Mart and Koch Industries.
In 2016, the Republican State Leadership Committee also contributed $350,000 to Grow Connecticut to target specific state legislature races. Democratic leaders blamed their loss of seats in both chambers to being outspent by Grow Connecticut and the CBIA, a state business group.