The Rise of Dark Money and the Koch Party

It’s time for 21st-century campaign finance reform: No limits, instant disclosure.

David Koch and co. don't want their name tied to the Keystone XL Pipeline.
National Journal
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Ron Fournier
Jan. 27, 2015, 5:57 a.m.

This week may be re­membered as the birth of the Koch Party. A usurp­er of the GOP and a rival to Demo­crats, the net­work of con­ser­vat­ive ad­vocacy groups backed by Charles and Dav­id Koch pledged Monday to spend $889 mil­lion on the 2016 elec­tion.

Fin­an­cially, the tax-ex­empt Koch co­ali­tion could be as big as either of the two ma­jor parties, spend­ing more than the com­bined 2004 cam­paign budgets of Pres­id­ent George W. Bush and Demo­crat­ic chal­lenger John Kerry. Koch op­er­at­ives will poll, track, and tar­get voters—mir­ror­ing the activ­it­ies of a tra­di­tion­al polit­ic­al party.

Ex­cept for one thing: dark money.

The Demo­crat­ic and Re­pub­lic­an parties are re­quired by law to dis­close their donors. Not so for out­side groups. While the Koch al­li­ance dis­closed some of its con­trib­ut­ors last year, most of its money comes from an­onym­ous sources. Secrecy breeds dis­trust, if not cor­rup­tion, as voters are left to guess what politi­cians do to re­pay their donors.

The na­tion is ex­per­i­en­cing a crisis of con­fid­ence in its polit­ic­al and gov­ern­ment in­sti­tu­tions, a dec­ades-long de­pres­sion with seeds in Wa­ter­gate, where a cor­rupt and para­noid pres­id­ent fin­anced his schemes with dark money. Then came a gen­er­a­tion of loop­holes bored in­to post-Wa­ter­gate re­forms, in­clud­ing the 2002 Mc­Cain-Fein­gold le­gis­la­tion, and the fi­nal blow: In 2010, the Su­preme Court ruled that cam­paign spend­ing lim­its vi­ol­ated the First Amend­ment.

Now we have the worst of all worlds: Gobs of money showered over Demo­crat­ic and Re­pub­lic­an can­did­ates with pre­cious little trans­par­ency. The 2016 pres­id­en­tial cam­paign will give rise to the next grim it­er­a­tion of dark money: “The ar­rival of can­did­ate-spe­cif­ic non­profits, per­son­al­ized vehicles for a politi­cian’s sup­port­ers to raise and spend un­lim­ited cash—com­pletely clandes­tinely,” writes my col­league Shane Gold­mach­er.

It is poised to yield a cam­paign sea­son more dom­in­ated by secret money than any elec­tion since Wa­ter­gate, ac­cord­ing to more than two dozen cam­paign strategists, elec­tion law­yers, donors, and wor­ried watch­dogs.

What’s the solu­tion? Spend­ing lim­its are off the table; like it or not, the Su­preme Court is un­likely to re­verse it­self any­time soon. That leaves trans­par­ency as the is­sue to tackle. Mind­ful of po­ten­tial First Amend­ment prob­lems, Con­gress should re­vis­it a policy Re­pub­lic­ans offered in de­fi­ance of Mc­Cain-Fein­gold: Un­lim­ited dona­tions coupled with im­me­di­ate trans­par­ency.

What could be a more mod­ern, tech-fueled re­form than re­quir­ing polit­ic­al can­did­ates and groups to sim­ul­tan­eously de­pos­it and dis­close? Open-gov­ern­ment groups could de­vel­op apps en­abling voters to track dona­tions to cer­tain mem­bers of Con­gress or from spe­cif­ic in­terest groups, with cus­tom­ized alerts sent to their mo­bile devices.

We can’t stop a sen­at­or from be­ing in the pock­et of Big To­bacco or Big Labor, be­hold­en to a Koch or a Sor­os. But we could see it—in­stantly. The fierce ur­gency of ac­count­ab­il­ity. Chuck Todd, host of NBC’s Meet the Press, read the first ver­sion of this column and sug­ges­ted an amend­ment to the de­pos­it-and-dis­close concept to en­cour­age big donors to self-lim­it their spend­ing.

If his­tory is a guide, noth­ing like this will hap­pen un­til there is a ma­jor scan­dal like Wa­ter­gate or a ma­jor em­bar­rass­ment, like what happened to Theodore Roosevelt in 1904.

It was a time not un­like ours—wrench­ing eco­nom­ic change, new tech­no­lo­gies, out­dated so­cial in­sti­tu­tions, and a col­lapse of con­fid­ence in polit­ics and gov­ern­ment. Roosevelt tapped voter un­ease by es­tab­lish­ing him­self as a trust-buster, rail­ing against the in­flu­ence of gi­ant cor­por­a­tions. After a suc­cess­ful start, Roosevelt raised $2.2 mil­lion ($52 mil­lion in today’s dol­lars) for his 1904 reelec­tion, mainly from cor­por­ate lead­ers who feared his wrath.

Demo­crat­ic chal­lenger Alton Park­er ac­cused the cor­por­a­tions of at­tempt­ing to buy the pres­id­ent. Roosevelt called the charge “a wicked false­hood,” breezed to reelec­tion, and em­braced cam­paign fin­ance re­form as a way to re­pair his repu­ta­tion.

In 1907, Con­gress banned cor­por­ate con­tri­bu­tions—and that was the law of the land un­til 2010, when the Su­preme Court asked polit­ic­al lead­ers to think anew. Rather than re­spond to the chal­lenge and cre­ate a new set of rules that fit the times, Demo­crats de­mon­ize the rul­ing and con­ser­vat­ives ex­ploit it.

These so-called lead­ers claim they want open and hon­est gov­ern­ment, but don’t be­lieve their in­no­cent plea. It’s a wicked false­hood.


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