Source Gatestone Institute
NEW YORK, U.S.--Dark money. The words evoke sinister plots, secret organizations and conspiracies fit for a James Bond villain. We hear about dark money in politics, dark money in the elections and dark money supporting a web of organizations dedicated to undermining the American experiment.
Dark money seems to be everywhere -- and it is.
Dark money has become the most important fuel driving the debate on every single public issue. In fact, dark money is being deployed in new and revolutionary ways to affect our elections.
But what exactly is dark money, and how does it hurt or help? Is dark money good or bad?
Let's start with some definitions. Dark money refers to money injected into the process from anonymous sources. Somebody somewhere knows where the money came from, but that information is not public. Usually, the source is a tightly guarded secret.
Dark money is used to fuel television advertisement campaigns and organizations. It is used to buy newspaper advertisements and pay the rent at 501(c)(3) tax-exempt organizations.
Dark money often works like this. A source with deep pockets is interested in an issue. The issue might be green energy, gun rights, Israel, national defense or any of hundreds of other issues affecting the American debate.
The donor-advised fund then might distribute the money to the ultimate recipient -- a charity, a foundation or even a traditional media campaign. That's the most common model for moving "dark money."
But there is even darker dark money. The institutional left has developed models in the last decade that dispenses with any pretense of charitable purpose. They essentially create hyper-funded business structures whose only purpose is to spend money on issues.
When the revenue flows to a 501(c)(3), it is a tax-exempt donation (and tax deductible to the donor), and it usually must be disclosed.
But this darker dark money -- with funding streams wholly outside of the charitable or tax-exempt world -- faces no disclosure obligations. The owners, or members in the case of a limited liability corporation, would be liable for any taxes flowing from net profits.
It's all business. And "business is good."
These dark money business models are different from traditional political spending. Compare dark money to campaign contributions to candidates for federal election.
So is dark money good or bad? The truth is the answer is both, depending on how dark money is used.
Before you get too uncomfortable with all this secrecy surrounding dark money, let's travel back to the founding of the United States and recall why anonymous movements were so important.
Secretly-funded efforts fueled the American Revolution. The founding of this country was supported by an 18th Century version of dark money. Anonymous pamphlets, postings and newspaper columns funded and published without attribution rallied patriots to take up arms against the King of England.
Back when the NAACP fought outright racial segregation in court, a favorite tactic of the segregationist states was to try to find out who the donors were to the NAACP, in order to intimidate the donors. In a case brought by the NAACP against Alabama, this fight about donor secrecy went all the way to the Supreme Court in 1958.
The Supreme Court agreed with the NAACP in one of the most important cases involving issue-oriented philanthropy. The Court ruled that donors could be kept secret because of the real risk they face of harassment. The Court found that dark money, even if the Court did not call it dark money, was as important as it had during the American Revolution. Alabama was blocked from getting the list of NAACP donors.
The Supreme Court has weighed in on other aspects of dark money. The Court has repeatedly ruled that money is effectively speech, and protected by the First Amendment.
So is this good or bad?
Dark money spent through 501(c)(3) and 501(c)(4) organizations comprises the vast majority of issue-oriented spending. It dwarfs hard dollar expenditures by candidates by at least a factor of ten.
Dark money is increasingly important because of the organized harassment campaigns that conservative donors face. When the donations of Betsy DeVos, former Secretary of Education, and Dan Cathy, the owner of Chick-Fil-A, became known, organized harassment campaigns were launched
Dark money is now being used in revolutionary ways surrounding our elections. Here are three new developments:
In March 2022, the 65 Project launched a new dark money-funded campaign to disbar lawyers who work on voter fraud issues or represented President Trump in post-election litigation.
The 2020 election was characterized by a revolutionary new funding stream in which private money flowed into government election offices, and the donors told the government election offices how to run the election.
Characterized as "Zuck Bucks" because the majority of the money came from Facebook founder Mark Zuckerberg, this money made the difference in 2020. Urban election offices in Philadelphia, Detroit, Lansing, Phoenix, Atlanta, Milwaukee and Las Vegas were converted into turnout machines.
Lastly, no discussion of dark money is complete without mentioning ballot-harvesting. Because of the unprecedented rush to mail-in voting in 2020, dark money flowed into structures designed to go out and collect ballots at voters' homes.
There are very smart and savvy individuals designing new and revolutionary ways to affect our elections. In the last two years, they have designed and implemented revolutionary new structures that affect voting on the ground, convert government election offices to turnout machines, and scare away anyone who tries to stop it.