After two election cycles where liberals outspent conservatives on dark money, many Democrats are looking to pull the plug on this spigot of cash. But it remains far from clear whether that will ever happen.
The For the People Act—called H.R.1 in the House, S.1 in the Senate—would enact a host of new protections to voting rights and election transparency. It would also put an end to dark money, even as Democrats have finally gained the upper hand in raising and spending such money.
Requiring transparency
A key portion of H.R. 1 called the DISCLOSE Act would require all 501(c)(4) organizations, which currently are not required to reveal their donors, and other groups that spend more than $10,000 in a given election cycle, to report any donor who gave at least $10,000 in that cycle. It would also tighten the rules on foreign nationals donating to U.S. elections—specifically preventing foreign donations to ballot initiatives and referendum campaigns. If passed, it would essentially put an end to the monster anonymous donations that have become commonplace in U.S. elections.
This isn’t the first time the bill has been introduced. Democrats first brought the DISCLOSE Act to Congress in 2010 just after the Citizens United Supreme Court case opened the floodgates for dark money, and resurfaced as part of the For the People Act when it was first introduced in 2019.
“It’s fair to say the For the People Act would go a very long way toward ending dark money,” said Brendan Fischer, the director of federal reform at the Campaign Legal Center. “This is a pretty tight bill, and it’s really tailored to address the loopholes that have been created over the past several years in particular.”
The DISCLOSE Act tightens the rules around what’s considered a “campaign-related disbursement” by requiring disclosure of donors funding any ad that “promotes, attacks, supports or opposes” a candidate—or the “PASO standard.” The bill also allows organizations to create a “segregated fund” to use exclusively for campaign activities. Fischer said if the DISCLOSE Act passed, we’d likely see nonprofit groups create these separate funds so they could continue to take in undisclosed donations for non-campaign activities.
Other elements of the For the People Act also bolster the bill’s campaign finance disclosure goals, such as the Honest Ads Act, which would close the web ad loophole that currently allows anonymous donors to purchase ads that appear online instead of on broadcast television.
Mastering dark money
Despite taking the lead on donor transparency, Democrats have been leading dark money fundraising by a healthy margin. Liberal dark money groups overtook conservative groups in spending for the first time in the 2018 cycle, and continued their dominance in 2020. A recent report by OpenSecrets.org found liberal groups used $514 million of dark money in the most recent election cycle, compared to just $200 million helping Republicans.
It might seem like Democrats are working against themselves promoting the DISCLOSE Act, but the party has not been struggling to raise money through other avenues in recent cycles. 2020 saw an unprecedented level of small-donor contributions, with Democratic candidates bringing in $1.8 billion compared to Republicans’ $1.1 billion, according to OpenSecrets.org. For the People Act also includes a small-donor fund-matching provision, which would allow campaigns that opt in to receive a six to one match in public funds—that money would come from a surcharge on corporate criminal and civil settlements.
Fischer said it’s unclear whether Democrats or Republicans would benefit more from a majority small-donor campaign finance system since both parties have been growing their online donor capacities, but “what is clear is that amplifying the voice of small donors helps to limit the relative influence of the wealthy donors.”
The For the People Act and DISCLOSE Act now sit in the Senate, where Republicans seem determined to use the filibuster to prevent it from getting a vote. Campaign transparency, however, as Fischer points out, has broad bipartisan support among voters, and some elected Republicans have in the past railed against dark money in politics. Even if the For the People Act withers away in the Senate, it remains to be seen if the DISCLOSE Act could pass as a standalone bill in the current Congress.
“Eleven years since Citizens United, every election has been more expensive than the last, more dark money spent every election cycle than the prior relevant election cycle,” said Fischer. “Democracy reform is long overdue and it can’t wait.”
