PD Editorial: Leaving voters in the dark about campaign money

The 2016 presidential election is pointing to some possible limits for big money.

Among them, super PACs supporting Ted Cruz, John Kasich, Jeb Bush, Marco Rubio and Chris Christie raised more than $250 million. Their return on investment: zero.

Donald Trump’s emergence aside, that’s a positive development, suggesting that money alone can’t deliver the presidency.

But politics still is awash in money, and far too much of it can’t be traced to its source.

Super PACs, like candidates themselves, must identify their donors in periodic reports filed with the Federal Election Commission, thus making it possible for journalists, academic researchers and ordinary voters to see who is trying to influence the outcome of U.S. elections.

There’s no such transparency with “dark money.”

And what little oversight that exists is being threatened in Congress and the courts.

Dark money refers to campaign spending by nonprofit groups established under Section 501(c)(4) of the Internal Revenue Code.

Ostensibly formed as social welfare organizations, many of these groups have morphed into big-money campaign committees that, because of their nonprofit status, can promise anonymity to their financial benefactors.

Since 2008, dark money groups have spent more than $590 million on political campaigns, according to the Center for Responsive Politics, a nonpartisan, nonprofit organization that tracks money in U.S. politics and its effects on elections and public policy.

Congress could easily close the loophole in the tax code that allows these groups to keep their donors’ names secret from the voting public.

Instead, a bill working its way through the House would open the loophole even wider.

Although these groups aren’t required to identify their donors in publicly accessible reports to the FEC, they must submit the names to the Internal Revenue Service.

That requirement would be erased under a bill advanced last week by Republicans on the House Ways and Means Committee.

If it becomes law, no one outside of the dark money groups themselves would know who is bankrolling their campaigns.

As campaign reform advocates have pointed out, that could lead to money from foreign governments, foreign corporations and non-citizens being spent on U.S. campaigns.

“While foreign money cannot be legally given or spent in our elections, the only real protection we currently have … is that 501(c)(4) groups must disclose their donors, including foreign donors, to the IRS,” several watchdog groups said in an April 27 letter that evidently failed to sway the Ways and Means Committee. “This requirement means that 501(c)(4) groups know they can be held accountable if they illegally spend foreign money in U.S. elections.”

Meanwhile, a federal judge thwarted the California Department of Justice’s efforts to require a 501(c)(3) group associated with the Koch brothers to submit its donor list, on a confidential basis. U.S. District Judge Manuel Real said requiring disclosure, even confidentially, violated the group’s First Amendment rights.

We’d like to remind Real that Justice Anthony Kennedy, in his ill-advised Citizens United decisions, said prompt disclosure would offset any risks associated with unleashing corporate money and labor union money on political campaigns. Secret money is a bigger risk, potentially undermining public confidence in government.