The Blog

Marco Rubio's Dark Money

Dark money not only dominates our campaigns; it also transfers political power to unknown actors. No doubt as intended, the increased flow of dark money is even harder to follow. For all we know, some of it comes from Manchuria.
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Republican presidential candidate, U.S. Senator Marco Rubio, R- Fla., addresses the Sunshine Summit in Orlando, Fla., Friday Nov. 13, 2015. (AP Photo/John Raoux)
Republican presidential candidate, U.S. Senator Marco Rubio, R- Fla., addresses the Sunshine Summit in Orlando, Fla., Friday Nov. 13, 2015. (AP Photo/John Raoux)

At the height of the Cold War, jittery Americans snapped up The Manchurian Candidate, a paranoid thriller wherein the Soviets and Chinese attempt to install a puppet president. On the page and screen, the effort failed. But now Citizens United has opened up a far more plausible scenario: the secret use of foreign money to help elect an American president.

In freeing unlimited "soft money" to inundate our campaigns, the Supreme Court offered up the palliative of disclosing its sources. "Disclosure," Justice Kennedy assured us, "enables the electorate to make informed decisions and give proper weight to different messages and speech." Set aside the dreamy vision of millions of harried citizens rising as one to investigate the funders behind the newest wave of attack ads. In reality, bashful donors quickly exploited a pre-existing escape hatch which Kennedy somehow overlooked: "social welfare organizations" which, under the Internal Revenue Code, can conceal who funds them.

The original notion behind such groups was not to bankroll candidates, but to enlighten the public through a flow of advocacy and ideas; the intended beneficiaries of secrecy were typified by southern donors to the NAACP during the violent civil rights era. But Citizens United triggered a massive perversion of this idea -- an explosion of groups applying for such protected status in order to funnel"dark money" into political campaigns. This abuse of the law transformed the political landscape: suddenly millions of dollars from undisclosed sources poured into ubiquitous "issue ads," aimed at electing or demolishing candidates for federal office -- from the president on down.

These political Trojan horses are distinct from the vehicles for unlimited donations to the legally -- defined "political organizations"contemplated by Citizens United: Super PACs -- which, while also leveraging millions to influence candidates and elections, at least are required to disclose their sources of funding. Instead -- and virtually overnight -- dark money from secret donors provided most of the funding for federal campaigns: $173 million in the congressional election of 2014; more than $308 million in the presidential cycle of 2012. This presidential election will be drowning in it -- already there is 10 times as much undisclosed spending as there was at the same point four years ago. As the underfunded IRS and impotent Federal Election Committee ignored the glaring misuse of "social welfare" groups to evade the law, a bemused Justice Kennedy allowed that "disclosure isn't working the way it should." To say the least, this modest and belated insight understates the problem.

In truth, dark money not only dominates our campaigns; it also transfers political power to unknown actors. The exponential growth of secret money deployed to influence elections is exemplified by the $164 million spent by a Koch brothers front group -- the gauzily-named Center To Protect Patient Rights -- which, as one would guess, is not deeply concerned with the welfare of patients. A particularly disturbing phenomenon is sphinx-like front groups for undisclosed donors that pop up in one campaign cycle, only to vanish in the next. An example is another Koch-inspired group, the American Future Fund, which spent almost $60 million in 2012, and virtually nothing two years later. No doubt as intended, this increasingly common practice makes the flow of dark money even harder to follow.

For all we know, some of it comes from Manchuria.

The use of foreign money to fund American candidates remains nominally illegal. But there is nothing to stop foreign individuals, corporations or even governments from using dark money groups to do just that. Indeed, the groups themselves may not know where their money comes from -- all it takes is for foreign donors to launder cash through American shell corporations.

Conversely, an American determined to make his candidate president can channel a torrent of foreign money through bogus "social welfare" groups. A lobbyist for foreign interests can support compliant candidates with money from abroad. With no check on dark money, the only limits on foreign sources are their resources and ambition. Thus a foreign entity could use unlimited dark money in an effort to change our policies by electing the president of its choice. And there would be no way for us to identify this Manchurian Candidate.

Naturally, most Americans don't like this one bit. Polls show that an overwhelming majority of Republicans, Democrats and independents strongly favor full disclosure of all sources of campaign funding. But not the Republicans in Congress. Their concern is for the donor class who funds the party so overwhelmingly -- known and unknown alike.

Since Citizens United, Democrats in Congress have repeatedly introduced the DISCLOSE Act in an effort to stamp out dark money. Its express purpose is to require disclosure of dark money donors; to prevent US companies with 20% or more foreign ownership from influencing elections; and, specifically, "to prohibit foreign influence in federal elections." Seems reasonable -- indeed, when opposing limits on campaign contributions, the GOP offered "full disclosure" of donors as an alternative.

But the GOP's fondness for disclosure evanesced after Citizens United. Mitch McConnell decried DISCLOSE as "harassment and intimidation," "un-American," and "an attempt to identify and punish political enemies." And when the IRS clumsily investigated whether the surge in "social welfare" groups violated the law by picking those with suspicious sounding names, Republicans in Congress accused them of deliberate bias against entities with conservative labels, choking off the inquiry and extracting an apology. In effect, the GOP is protecting wealthy funders of dark money groups from public disclosure -- whether these secret donors be foreign or domestic. One doubts that, in the great majority of cases, these donors wish to be similarly concealed from the candidates they support, or that the candidates don't wind up knowing who to thank in private.

Justice Scalia makes short work of the idea that these privileged people need protection from disclosure: "[R]unning a democracy takes a certain amount of civic courage. And the First Amendment does not protect you from criticism or even nasty phone calls when you exercise your political rights..." But despite majority support in the Senate, on a near-annual basis, Republican senators killed DISCLOSE through filibusters. And so dark money, like mushrooms, continues mushrooming in the dark.

As "social welfare" groups swell, presidential candidates become ever more addicted to dark money for the advertising and messaging which propels their campaigns. Some candidates are so dependent on dark money that they could not survive without it. So which of the current crop, one might ask, is, in theory, most vulnerable to stumbling into the unwitting role of Manchurian Candidate?

As always when it comes to soft money, Marco Rubio is a decent bet. And, as often, at any given moment there is a chasm between what Rubio says and does.

Confronted in New Hampshire by a voter concerned with the money overwhelming our campaigns, Rubio conveniently forgot his votes against the DISCLOSE Act. Sounding a note of concern, he assured his interlocutor that: "Full disclosure and sunlight into all these expenditures is critical to getting to the root of this problem. As long as you know who's behind the money and how much they're giving and where they're spending it, that's the sunlight that we need." But not, it turns out, if too much sunlight would darken Rubio's prospects.

More than half of his campaign financing -- over $16 million -- is dark money channeled through Conservative Solutions Project (CSP), a "social welfare group" with a name virtually identical to Rubio's Super PAC, Conservative Solutions PAC. Given that Rubio already has a Super PAC for unlimited but disclosed donations, the only reason for CSP's existence is to scoop up secret money. CSP has paid for every pro-Rubio TV ad in the early primary states -- Iowa, New Hampshire and South Carolina, at a cost of more than $5 million -- as well as radio ads. CSP financed research into demographics and issue preferences in those same states, conducted by a firm which is also on Rubio's political payroll. The website for this vehicle of public enlightenment features Rubio's picture and Rubio speaking on video. And CSP bankrolled ads in which Rubio denounced the Iran nuclear deal -- after all, a CSP spokesman explained, "Rubio is one of the most persuasive voices in opposition to the deal."

Press accounts do not record if this gentleman had the grace to crack a smile. But CSP was set up by the same GOP operative who started Rubio's PAC, and the two entities share some of the same employees -- including the spokesman. Hard, then, to square this dubious deployment of dark money with another bromide Rubio offered in New Hampshire: "[A]s long as people know who is giving... and why... people can make judgments on why you're doing what you're doing."

In fact, what Rubio is doing may be more than driving a truckload of cash through a very large and shadowy loophole -- there is a factually compelling argument that he's violating the law. In this area, HuffPost has published a trove of smart and detailed articles well worth reading. But the central point is this: by law, groups like CSP must be primarily engaged in social welfare activity for the common good, and are barred from coordinating with or supporting a candidate's campaign.

By the most elastic standard CSP, is so blatantly tied to Rubio as to fall well outside the legal parameters for social welfare groups. A particularly telling piece of evidence is the language of contracts between CSP and the television stations broadcasting its ads, characterizing these commercials as "supporting Marco Rubio" in the presidential primaries. Thus three campaign reform groups have filed complaints with the IRS and Department of Justice charging that CSP is illegally operating to benefit Rubio's campaign.

Perhaps, in Rubio's mind, these legal niceties count for little. But when Donald Trump describes Rubio as Sheldon Adelson's "perfect little puppet," he neglects to ask who else may hold the strings. Rubio won't tell us -- assuming that, in all cases, he even knows.

Thanks to the GOP, Congress won't compel an answer. Nor, as of now, has the IRS, whose budget is at the mercy of those same legislators. The partial fix remaining -- an executive order requiring federal contractors to disclose their campaign spending -- will not curb groups like CSP, or address the potential corruption of our elections by foreign donors.

Perhaps, someday, a different Court or Congress will address Justice Kennedy's corrosive blunder. But until then, the only curb on the power of secret donors -- from here or abroad -- resides in the conscience of candidates like Marco Rubio.

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