States and Cities Took on Secret Election Spending in 2017

Congress has spent much of the year imagining more ways to hide the true funders of already murkily financed political advertising, even though the vast majority of their constituents — across the political spectrum — oppose dark money. That’s left the fight for transparency up to states and cities. And officials across the country have stepped up. Taken together, their efforts have formed a remarkable campaign to increase accountability from coast to coast.

In late November, a bipartisan group of Idaho lawmakers drafted a bill that would require spenders in local and state races to reveal more layers of funding and make public disclosures more frequently. If passed into law, the measure would require election advertisers to name their five biggest funders. If a funder were itself an organization that received contributions, that funder would have to disclose its top ten donors if it gave more than $1,000 in the crucial 15 days before an election. This multilayered disclosure would help reduce “gray money” — money that is routed through tiers of groups to conceal its true origin and dodge oversight.

One Republican legislator lamented that, without reform, mailboxes and radio broadcasts in Idaho would be “brimming with ads paid for by a single deep-pocketed donor,” displacing the kind of politics where candidates engage voters directly.

Like Idaho, more and more states and cities are moving to crack down on secret spending in elections — which has surged in the wake of Citizens United and related court decisions — while federal regulators remain mired in dysfunction. Without transparency, voters lack the information to fully evaluate political messages, and special interests can influence crucial electoral battles without public accountability. The stakes can be particularly high in state and local politics, because candidate elections and ballot referenda often determine policy outcomes with specific economic consequences.

This year, for instance, a pharmaceutical trade association poured nearly $60 million into a successful ad campaign in Ohio to defeat a ballot measure to cap drug prices. The group sent its money through a network of dark money groups, so that voters could not see who really stood to benefit from the messaging.

In September, California significantly boosted its already-tough transparency laws by passing the California DISCLOSE Act. Among other features, the law requires purchasers of more than $50,000 in print, television, radio, or online advertising to name their top sponsors in the ads themselves. To combat gray money, political action committees must reveal their original funders, not just the latest contributors in chains of many.

At the same time, the Denver City Council unanimously approved a new disclosure measure in the wake of costly past elections for mayor, City Council, and other city offices. The law mandates that independent spenders file public reports within two days of spending more than $1,000 on a campaign, disclosing anyone who gave more than $25 to the effort.

In New Mexico, Secretary of State Maggie Toulouse Oliver pushed through stronger campaign finance disclosure rules that took effect in October. Perhaps most consequential, nonprofits, super PACs, and other organizations that spend significant amounts on political ads will now, using dedicated accounts for this spending, have to disclose anyone who contributed more than $200.

Some state action to counter dark money has taken the form of enforcement. The Massachusetts Office of Campaign and Political Finance (OCPF) imposed its steepest-ever penalty in September — $425,000 — against a nonprofit that had failed to register as a PAC and thus avoided disclosure requirements, even though it engaged in political activity to influence votes on a ballot question concerning charter schools. That battle drew the largest barrage of campaign spending for a ballot question in state history. In requiring the nonprofit to register as a PAC and reveal its donors, the OCPF judged the group by its actions rather than by its technical label.

More plans to combat secret spending are brewing in other states. In Washington, the state House of Representatives passed a proposed law in March to treat nonprofit groups that spend in elections as a type of political committee subject to the same transparency requirements. Lawmakers next year are expected to resume consideration of this proposal along with a related measure in the state Senate that has bipartisan support. The Spokane City Council recently passed a bill mirroring these efforts at the local level.

In Arizona, some advocates are proposing a state constitutional amendment to require the disclosure of the “original source” of funds given to any group spending $10,000 or more to influence an election. Independent spenders themselves would have to trace the money given to them, uncover intermediary layers, and register the names and addresses of anyone giving more than $5,100.

If 2017 is any indication of what’s to come, 2018 promises to be a tougher year for deceptive political advertising in the states. This past year has shown us that though the federal government has been stagnant on reform, states can and should take the lead.