The rise of 'dark money' in politics | Arkansas Blog

Friday, May 3, 2013

The rise of 'dark money' in politics

Posted By on Fri, May 3, 2013 at 11:48 AM

Money, like water, always finds an outlet. Rulings like Citizens United have aided the flow of unaccountable money into political races, but there are other outlets. One is the rise of largely unaccountable 501c4 nonprofit organizations, that enjoy favored tax status even as they are able to spend some money in direct political activities (unlike rules that apply to 501c3 organizations.)

State officials are starting to take notice. Talking Points Memo writes here about a conference call that included people from 10 states about the growing influence of independent spending by such groups. Arkansas has felt the money, too, but didn't apparently have a representative in this talk.

Ironically enough, a new stab at "ethics" in Arkansas is seen by at least one political operator I know as likely to be counterproductive thanks to the 501c4s. He refers to the legislatively proposed constitutional amendment that allows for legislative pay raises, an easing of term limits, legalized junkets and legislative banquets and also a small change in an ethics rule or two.

One new ethics rule would ban direct corporate contributions to political candidates. Corporations still could contribute to PACs of all sorts. Isn't this limitation good? Well, a little bit good. Corporate spending on legislative races is relatively small, though $2,000 can be a lot of money for a state House candidate. It's far more important in statewide races. Think of multi-million-dollar races for governor and sometimes offices like attorney general.

If the corporate money is cut off, it will go somewhere. My friend bets, if the ethics amendment passes, it will supercharge movement of corporate money to the shadowy 501c4 organizations. I actually don't think we're going to have to wait long for such a catalyst to see this money play an even uglier role in state politics. If it doesn't show up in bundles for state Supreme Court races in the future, count me surprised.

What to do? Some states have moved to at least require reporting of politically related expenditures by independent groups. Others are pressing for federal investigations to see whether these "social welfare" groups are stretching tax law beyond its limit in political spending.

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