January 29, 2013

Dark Money Groups Have Ulterior Motives for Opposing Hagel

By CREW Staff

Chuck HagelThis weekend, the New York Times reported on efforts by dark money groups aggressively working to defeat President Obama’s nomination of former Sen. Chuck Hagel (R-NE) to be secretary of defense.  Not surprisingly, however, some of these groups aren’t telling the public all their reasons for opposing the nomination.

The Times highlighted the role of the American Future Fund (AFF), an Iowa-based group that spent nearly $26 million benefitting Republican candidates during the 2012 election cycle.  “Postelection we have new battle lines being drawn with the president; he kicks it off with these nominations and it made sense for us,” said Nick Ryan, the founder of AFF, of the group’s decision to fight the Hagel nomination.

What Mr. Ryan didn’t say:  AFF was formed under section 501(c)(4) of the tax code, a status for tax-exempt social welfare groups that allows them to keep the names of donors secret.  The primary purpose of such groups, however, cannot be influencing elections.  So, AFF and other dark money groups need to spend money on programs to offset the millions of dollars they poured into the 2012 elections.  Ads opposing Sen. Hagel’s confirmation help because they don’t count as political spending.

In addition, many of these groups are funded and dominated by a small number of large donors whose names never become public.  For instance, in 2011, AFF reported receiving nearly $2.6 million in contributions from 11 donors, with more than $1 million of it coming from a single donor.  It is clear donors see the large checks they write to these groups as a way to influence policy from the shadows.

The Times reported Sheldon Adelson, one of the biggest donors to super PACs and 501(c)(4) groups supporting Republicans during the 2012 election cycle, is directly contacting Republican senators and urging them to oppose Sen. Hagel’s confirmation.    Given that Mr. Adelson spent more than $100 million on elections, it seems likely incumbents will take his call.  As election law expert Richard L. Hasen pointed out last year, the real danger of unlimited money in politics is that it may “skew the legislative process” in favor of large contributors — such as Mr. Adelson.   Members of Congress know that if they say no to megadonors, they’ll face an onslaught of negative campaign ads the next time they’re on the ballot.  Correspondingly, assisting Mr. Adelson and his ilk could result in money spent on ads against their opponents.

The campaign against Sen. Hagel’s nomination is just one more reason why Congress must address the Supreme Court’s disastrous Citizens United decision.  Until dark money groups are forced to disclose their donors, the public has no way to know who is influencing members’ votes — or why.

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