Blog — Department of the Treasury

August 25, 2014

Dark Money Groups Work Together to Shield Donors’ Identities in State Elections

By Carrie Levine

Dark MoneyDark money nonprofit groups that have spent millions to influence federal elections are applying their playbooks to state races, spending vast sums to shape the outcome of contests lower on the ballot while transferring money from group to group to shield donors’ identities.

In March, for example, the State Government Leadership Foundation (SGLF), a conservative nonprofit, launched a $500,000 ad campaign targeting Nevada Secretary of State Ross Miller.  The ad charged Mr. Miller, a Democrat, with accepting pricy gifts and flashy trips from special interests.

Secretaries of state usually aren’t household names, though Mr. Miller has a higher profile than some.

He has taken some dark money groups to court in Nevada to force disclosure of donors behind political activity, and he is running for state attorney general.  In the wake of the ad, Mr. Miller called on SGLF to disclose the identities of the donors who paid for it while promising to review “every legal option” to force the group to do so.  SGLF is organized as a nonprofit social welfare organization under section 501(c)(4) of the tax code, which means the group doesn’t have to publicly disclose its donors.

Mr. Miller’s reaction, unsurprisingly, drew some criticism.  After pointing out Mr. Miller’s status as Nevada’s chief elections official, Jonathan Keim, a counsel for the Judicial Crisis Network (JCN), a conservative nonprofit that has spent money to influence elections, wrote, “Miller’s threats make this situation particularly dangerous to free speech.  I’m getting shivers just thinking about the chilling effects.”

What Mr. Keim did not say: JCN has given hundreds of thousands of dollars to SGLF.  In its most recent tax filing, JCN reported contributing a hefty $281,000 between July 2012 and June 2013.  SGLF, which is closely associated with the Republican State Leadership Committee, a political organization dedicated to electing Republicans to state office, told the IRS it received $2.6 million in contributions during calendar year 2012, the most recent year for which information is available.  To be sure, it is impossible to tell from the information available whether JCN’s money specifically paid for the ad against Mr. Miller.  JCN’s contribution, however, does represent a significant sum from a group that has demonstrated a strong interest in state attorney general elections.

So far this election cycle, JCN has directly spent hundreds of thousands of dollars attempting to influence the outcome of Republican primaries for attorney general in Nebraska and Arkansas.  In addition, JCN contributed $250,000 to the Republican Attorneys General Association earlier this year.

The Nevada case illustrates how dark money groups make it as difficult as possible to determine the identities of donors responsible for political ads.  Like SGLF, JCN does not reveal its donors.  JCN reported receiving approximately $5 million from only eight contributors between July 1, 2012 and June 30, 2013.  It has received large contributions in the past from another 501(c)(4) nonprofit, the Wellspring Committee, according to the Center for Responsive Politics.

The layers of anonymous groups mean that even if Mr. Miller were to identify the source of the money behind SGLF’s ads, he’ll likely run into yet another brick wall—and voters still won’t know the special interests behind the out-of-state money deployed to influence their choices.  

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