A Rare Win in the Fight Against Dark Money
16 Nov 2022 ( The New Yorker )
Last week’s midterm elections showed that the country remains deeply divided along partisan lines, but there was one exception that has been largely overlooked. Voters from both parties in all fifteen counties of the polarized state of Arizona came together and overwhelmingly approved a ballot measure that will require large anonymous “dark money” political donors to reveal their identities.
Proposition 211, known as the Voters’ Right to Know Act, requires that any donor giving more than five thousand dollars to a nonprofit that uses the money on political advertising and spends more than fifty thousand dollars on a state campaign or ballot proposition must publicly disclose their name. In order to insure transparency, the new rule applies even if the contribution was routed through a front group attempting to screen the identity of the original donor. “Voters have a right to know who is behind ‘Americans for Peanut Butter,’ or whatever else,” Terry Goddard, Arizona’s former attorney general, who spearheaded the ballot measure, told me in a phone interview. “Everyone knows [shell organizations are] just a cover and they resent it. But without this, there’s no way to get the truth.”
The measure is designed to expose the funders of the dark-money front groups that have proliferated since the Supreme Court’s Citizens United decision, in 2010. Since then, there has been an explosion of anonymized campaign spending by a tiny but extraordinarily wealthy group of donors, including in this year’s races.
As Sheila Krumholz, the executive director of the nonpartisan group Open Secrets, recently told the Times, “We’ve broken records with our broken records.” Her organization estimated that total spending in the 2021 and 2022 midterm races would reach $16.7 billion, easily surpassing the previous midterm record of fourteen billion dollars, set in 2018. More than fifteen per cent of the total spent on federal races, according to the Times, has been contributed by billionaires, of whom there are fewer than eight hundred nationwide. Because contributions are often transferred from one shell group to another before reaching the group that actually spends the money, the original donors often remain untraceable. The system has proved to be a bonanza for self-serving, and critics say corrupt, private interests.
As was shown in a leaked recording of a conference call between conservative dark-money groups about which I wrote last year, top political operatives know that voters in both parties resent the manipulation of elections by secretive billionaires. In order to preserve the anonymity of their wealthy backers, they have tried to kill reform efforts behind closed doors in Congress rather than risk public votes on the issue, such as the Arizona referendum. A variety of related reform measures have been put in place to shed light on dark-money donors in Alaska, Montana, and Maine.
Unsurprisingly, the Arizona measure was opposed by some of the wealthiest and most powerful dark-money groups in the country. Leading the opposition was an organization known as the Arizona Free Enterprise Club, which, according to past financial disclosure records, has been a recipient of funds from the billionaire Koch family’s dark-money group, Americans for Prosperity.
Despite the deep-pocketed opposition, the Arizona measure sailed through so handily—winning more than seventy-per-cent support—that the Associated Press declared it a victory even as the votes were still being counted in the state’s agonizingly drawn-out Senate and governor’s races. While the measure’s lopsided success this year made it look surprisingly easy to pass, the victory was actually the culmination of a nearly decade-long struggle largely led by Goddard, who refused to give up. The measure was, in fact, his fourth attempt at a petition drive. Reached by phone in his office in Phoenix, where he previously served as mayor, Goddard, who is seventy-five, and has the unassuming manner of an aging Jimmy Stewart, acknowledged, “It’s been a long road.”
His long crusade began in 2014, when Goddard, an Arizona Democrat, ran for secretary of state on a platform demanding more disclosure of campaign spending. Ironically, he was defeated, in part, by a flood of dark money spent against him and several other candidates that year. Documents show that in a race that year the state’s largest electric company funded dark-money groups that paid for attack ads that helped defeat consumer-oriented candidates for seats on a state commission that oversees public utilities. Soon after, Arizona consumers were saddled with significant rate hikes. “They got their return on investment, all right,” Goddard told me. “The attacks were vicious and highly inflammatory, and if the funders had had to put their names on those ads, they would never have run,” he added. “But because it was dark money, they could disown them, and do it with impunity.”
In an effort to flush out dark money, in 2016 Goddard launched the first of his petition efforts. But, Goddard said, his principal backer that year lost interest after realizing that the initiative would curtail unlimited spending by anonymous donors, including himself. “It was a learning experience, you could say,” he recalled, dryly. His next effort, in 2018, resulted in the state Supreme Court finding deficiencies in his petition drive’s signatures, and in 2020, a subsequent drive was stymied by the covid-19 pandemic.
This year, though, the drive generated critical momentum. One breakthrough was the support of high-profile Republicans, some of whom have also grown leery of the amount of undisclosed spending flooding the state. The measure perhaps surprisingly drew support from one of Goddard’s former campaign opponents: Fife Symington, a Republican who served as Arizona’s governor from 1991 until 1997. Goddard told me that, “I’m a relatively liberal Democrat, but my former opponent, to whom I hadn’t spoken for something like thirty years, endorsed it.” In arguing for the measure, Symington likened attacks from dark-money groups to “being in a boxing match with an opponent you can’t see.”
Goddard also credited the Campaign Legal Center, a Washington, D.C.-based nonpartisan watchdog group founded by Trevor Potter, a former Republican chair of the Federal Election Commission, with providing him with “expert legal assist” this time. Whether the measure will survive legal challenge, however, remains to be seen. “I do expect legal challenges,” David Kolker, a senior counsel at C.L.C. who worked closely with Goddard on drafting the ballot initiative, told me. “The enemies of disclosure aren’t shy.” (In the interest of transparency, a relative works at the C.L.C. on unrelated issues.)
Just before Election Day, Scot Mussi, the president of the Arizona Free Enterprise Club, which is itself a conservative dark-money group, gave an interview to The Center Square, a publication sponsored by yet another conservative dark-money group, in which he argued that Proposition 211 represented an unconstitutional infringement of free speech. “One of the bedrock principles our country was founded upon was the right to free speech, which includes being able to support causes and issues they believe in without fear of harassment and intimidation,” he asserted.
Mussi claimed that the Voters’ Right to Know Act threatened speech because it would force donors to run the risk of being targeted by “cancel culture.” He charged, without evidence, that “They want the names of private citizens so that they can dox, harass and cancel them in their communities.”
Goddard, who had never heard the term “dox” before, dismissed the criticism as off-base. He noted that the Arizona measure is narrowly tailored, and gives donors notification and opt-out provisions, enabling them to specify that they don’t want their contributions to a nonprofit group to be spent on political advertising. This gives donors the option of supporting causes, while avoiding having their identities disclosed.
Further, Goddard noted, Arizona’s campaign-disclosure law already requires those who donated fifty dollars or more to a candidate to reveal their name, address, and workplace. The new measure simply restores the status quo that was in place before dark-money groups sprang up in 2010, encasing campaign donors in layers of secrecy. Moreover, Goddard notes, there is no constitutional right to secret campaign spending.
No less of a conservative than the Supreme Court Justice Antonin Scalia made this point in a case about the disclosure of petition signatures, in 2010. In it, Scalia argued that “Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed. For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously . . . hidden from public scrutiny and protected from the accountability of criticism. This does not resemble the Home of the Brave.”
Still, Goddard expects a protracted battle ahead. After his ballot measure finally passed, he told the Arizona Republic that the fight is far from over. Speaking of dark-money groups with seemingly unlimited resources he said, “These guys never say die.”
SEE THE ORIGINAL ARTICLE
