The possibility of a light on dark money

By: 
Phill Brooks

This spring, Missouri’s Ethics Commission may have found a solution to one of the biggest threats to transparency of special interest money in public policy.

Critics call it “dark money.” The term refers to money special interests secretly dump into campaigns without disclosure. For years, Missouri law has required political campaigns to disclose donors.

But there’s a loophole.

It involves an organization that is not a legal campaign organization and, thus, is exempt from campaign financial disclosure laws. A donor wishing to be secret simply contributes to the reporting-exempt organization, which then dumps the money into a political campaign.

When the campaign identifies its contributors, as required by law, it lists only the exempt organization as the contributor — not the exempt organization’s donors. To be legal, this process requires that there’s no explicit agreement as to the ultimate recipient of a donor’s money.

Even more insidious are the attack ads you so often see against public figures that are not funded by campaign committees. Because the attack ads are independent of the candidate and ballot-issue campaign committees, no financial disclosure is required.

Gov. Eric Greitens has personified the growth of this dark-money approach.

It was a dark-money funded organization, Seals for Truth, that dumped more than $1.9 million into Greitens’ primary campaign for governor just weeks before the primary and with no disclosure about the real source of that money.

Eventually, Seals for Truth filed a federal report designating the source of that money, but it turned out to be a dark-money organization exempt from campaign finance disclosure requirements.

Dark money returned as an issue in his inauguration.

Greitens’ inaugural festivities were financed by a dark-money inaugural committee that was not required to disclose its finances because it was a campaign committee.

We know the donors only because Greitens identified them in his inaugural program. But the amounts from those donors remain a secret as well as whether the donor list was complete.

Later that inaugural day, Greitens signed an executive order prohibiting government employees, including those in his own office, from accepting lobbyist gifts.

Yet, some of the donors to Greitens’ inauguration celebration had significant financial interests with state government including one company that later got a no-bid state contract from the Greitens’ administration.

Later that year, Greitens supporters set up another dark-money organization — A New Missouri.

Its stated purpose is to support the governor’s agenda.

Although run by the governor’s former campaign manager, it technically is not a campaign committee. So, its finances are completely secret, including its funding sources.

But this year an indication about the assets of this dark-money organization emerged when an organization campaigning for a “right to work” ballot issue to ban mandatory union membership reported it had received $2.4 million from A New Missouri.

Because A New Missouri is not a campaign committee, it’s not required to disclose its own finances — including where it got the $2.4 million it funneled into the “right to work” campaign.

Sen. Rob Schaaf, R-St. Joseph, has been the leading critic of this dark-money trend in Missouri politics. In his final year in the Senate, the only two bills he’s sponsored seek to expose dark money. Neither bill was given even a committee hearing in the Senate.

But, the Missouri Ethics Commission may have found a way around legislative inaction about dark money.

In an early May advisory opinion, the commission concluded that a non-profit organization becomes a political committee required to disclose its finances if it received more than $250 from any one contributor or more than $500 in a calendar year “for the primary or incidental purpose of influencing or attempting to influence the actions of voters.”

It’s hard to believe that of the $2.4 million A New Missouri gave to the “right to work” campaign there wasn’t at least one contributor who intended to influence voters.

Left unanswered in MEC’s advisory opinion is how to determine donor intentions. But MEC has taken a step towards shinning a light on dark money that the legislature has failed to address.

(Phill Brooks has been a Missouri statehouse reporter since 1970.