Federal Judge Issues Game-Changing Ruling on Dark Money

An ethics watchdog has claimed a “major court victory” after a federal judge issued a ruling invalidating a Federal Election Commission (FEC) regulation that allowed contributors to so-called dark money organizations avoid disclosure.

“This ruling looks like a major game changer,” said Noah Bookbinder, executive director of Citizens for Responsibility and Ethics in Washington (CREW). “Based on this ruling, the public should know a whole lot more about who is giving money for the purpose of influencing an election, and it will be much harder for donors to anonymously contribute to groups that advertise in elections.”

BREAKING: We just won a major victory against dark money that could change the political landscape and bring much more transparency to our elections https://t.co/wWwar2zRZb

— Citizens for Ethics (@CREWcrew) August 4, 2018

CREW was a plaintiff in the case, and had challenged in 2012 Karl Rove’s Crossroads GPS — a “not-political committee” — over its failure to disclose who donated $6 million in the Ohio Senate race, a sum CREW argued was subject to federal reporting requirements.

US District Court Judge Beryl A. Howell found that Crossroads GPS’s defense didn’t hold water, writing Friday that the three-decade old FEC regulation at question fell short “of the broad disclosure that Congress intended.”

The challenged regulation, she concluded, can facilitate groups’ “routing” of contributions to candidates or the groups’ affiliated super PACS, and

blatantly undercuts the congressional goal of fully disclosing the sources of money flowing into federal political campaigns, and thereby suppresses the benefits intended to accrue from disclosure, including informing the electorate, deterring corruption, and enforcing bans on foreign contributions being used to buy access and influence to American political officials.

Her decision, CREW explains, means that “dark money groups that spend at least $250 in independent expenditures — a key type of political ad — must report every contributor who gave at least $200 in the past year as well as those who give to finance independent expenditures generally.”

In a Twitter thread outlining the importance of ruling, Center for Responsive Politics’ Robert Maguire says it “could fundamentally change the role dark money plays in elections (if it has a role at all).”

This. Is. Huge.

It’s hard to exaggerate how big of a deal this @CREWcrew victory is. If it stands, it could fundamentally change the role dark money plays in elections (if it has a role at all). https://t.co/OKftf17I7f

— Robert Maguire (@RobertMaguire_) August 4, 2018

Dark money groups will still benefit from certain loopholes that, honestly, might never be closed, like the “issue ad” one we mentioned yesterday https://t.co/X6m6ogyDGg

— Robert Maguire (@RobertMaguire_) August 4, 2018

BUT, that is not at all to downplay the importance of the decision.

Consider that dark money groups have spent more than $733 MILLION (!) on independent expenditures — the type of spending the case was concerned with — since Citizens United.

A huge portion of their activity.

— Robert Maguire (@RobertMaguire_) August 4, 2018

Bookbinder agreed, saying it “could dramatically change the American political landscape and result in significantly more transparency.”

“Major donors are now on notice that if they contribute to politically active 501(c)(4) organizations, their contributions will have to be disclosed,” he said, “and if they are not, CREW will pursue enforcement cases with the FEC and, if necessary, in court.”