‘Dark Money’ Gets Protection in Congressional Spending Bill, Yet Again

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Congress is again rushing to pass a spending bill before the government runs out of money. And once again, Congress has used a must-pass bill as a vehicle for last-minute riders that protect secret political spending from public scrutiny.
But despite the anti-transparency rules in the omnibus spending bill released Wednesday night, good government activists say some of the worst campaign finance measures proposed in House and Senate versions didn’t make it into the final legislation .
“We dodged a bullet,” Stephen Spaulding of Common Cause, a left-leaning government watchdog group, told Newsweek .
One of the campaign finance riders in the House version that was dropped during negotiations between the two chambers would have repealed part of the Johnson Amendment, which bars tax-exempt churches from engaging in political activity. Experts said another rider, originally included in the Senate version of the bill, would have allowed candidates and their parties to use the same advertising and public relations vendors. Current campaign finance rules prevent that.
But three riders remain in the final bill, and prevent government agencies, including the Internal Revenue Service (IRS) and Securities and Exchange Commission (SEC) from implementing policies that would shine light on the anonymity of some types of political contributions dubbed “dark money.” These bans have been included in several iterations of spending bills dating back to 2014, but have never been codified into law through standalone legislation. The final bill is expected to pass both chambers of Congress before a Friday deadline.
Some experts question why the party that controls the legislative and executive branch is using spending bill riders, instead of legislation or agency rulemaking, to advance their goals.
“Part of the reason they do it this way is these policies are so unpopular,” Lisa Gilbert, vice president of legislative affairs at Public Citizen, a consumer rights advocacy group founded by Ralph Nader, told Newsweek . “There’s no question Republicans want fewer finance limits and Democrats want more.”
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Unlike bills, riders do not require names of individual lawmakers attached to them, meaning voters can’t hold the elected officials that champion them accountable. A Washington Post-University of Maryland poll from late last year showed 65 percent of Americans blame money in politics for dysfunction of the U.S. political system.
One of the riders prevents the SEC from making a rule that would require publicly traded companies to disclose their political spending to shareholders. The Obama administration had signaled support for such a disclosure rule, but it was never implemented after Obama’s SEC chairwoman Mary Jo White refused to advance it.
A second measure prevents the government from creating any rule that would require federal contractors to disclose their political spending. Proponents of the measure have argued that allowing federal contractors to spend “dark money” prevents discrimination against companies by bureaucrats who don’t agree with the company’s political activities. Critics argue disclosure would ensure that companies wouldn’t receive federal contracts in exchange for political donations.
Another provision, first implemented in a 2014 spending bill, prevents the IRS from issuing guidance or changing rules related to how the agency decides whether a non-profit group spending money on politics is a “social welfare” 501(c)(4) group under the U.S. tax code. 501(c)(4) groups are not required to disclose their donors and are allowed to engage in political activities so long as politics is not its “primary activity,” a murky standard that the IRS tried to clarify before it was prevented from doing so by spending bill riders.
In recent years these 501(c)(4) groups have increasingly been known as “dark money” groups that spend all or most of their money on political campaigns with few consequences. This is due in large part to the riders in spending bills, which were a response to the 2013 uproar over how the IRS tried to handle a sudden increase in these types of groups. President Obama called the IRS’s actions “ inexcusable ” and the acting IRS director resigned.
Together, these riders protect the disclosure of anonymous political spending, which is usually funneled through not only 501(c)(4) groups but trade associations, which often receive money from large corporations whose anonymity is protected by the SEC and federal contracting riders.
Anonymous political spending accounted for just $5 million dollars in the 2006 election cycle before reaching a high of $312 million in the 2012 cycle, according to the Center for Responsive Politics . Dark money spending in the current cycle is outpacing the 2014 cycle, the last non-presidential campaign cycle, but behind the 2016 cycle.

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