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NEW INVESTIGATION: Secret Spending Pollutes State and Local Elections

Elections that were once citizen-driven are now flooded with unprecedented millions from secret sources. Compared to the federal level, these funders are subject to less scrutiny and have far more ability to shape results.

June 27, 2016

New York, NY – Secret money surged from 24 percent of all outside election spending in 2006 to 71 percent in 2014, in six states where data is available, according to a major investigative analysis released by the Brennan Center for Justice at NYU School of Law.

The report, Secret Spending in the States, is the most comprehensive empirical look yet at how secret money has transformed state and local elections — where interests with a direct stake in a race can buy the outcome for relatively small amounts of money.

The jump in secret spending is largely due to a new phenomenon we’ve dubbed “Gray Money.” This spending by political committees must legally be disclosed, but the money is routed through multiple layers of PACs to obscure its origin.

Importantly, where the study was able to identify the source of secret funds at the state and local levels, they did not only come from ideologues, like the Koch brothers. Instead, the money frequently flowed from special interests with a direct economic interest in elections: Mining companies secretly targeting a legislator who opposed permits, for example, or food companies battling a ballot measure to add labeling requirements.

“Across the country, hundreds of special interests are pouring secret money into electing officials who will regulate their industries, judges who will decide their cases, and ballot initiatives that will impact their bottom line,” said Chisun Lee, senior counsel at the Brennan Center and lead author of the study. “Elections that were once citizen-driven are now flooded with unprecedented millions from secret sources. Compared to the federal level, these funders are subject to less scrutiny and have far more ability to shape and swing results in what are often low-information elections.”

Secret Spending in the States combines empirical findings from six geographically and demographically diverse states — Alaska, Arizona, California, Colorado, Maine, and Massachusetts, representing approximately 20 percent of the nation’s population — with interviews with dozens of candidates, regulators, and citizens.

Drawing on an extensive database of local news accounts, campaign finance and tax records, court cases, and social science research, it documents how the Citizens United decision — which opened the door to unlimited outside spending — coupled with the IRS’ failure to enforce existing disclosure laws, has allowed secret political spending to infect state and local elections, even more than in federal contests.

Other key findings:

  • Lower costs make it easier for dark money groups to dominate state and local elections.

– For many of the contests, dark money groups could outspend candidates with amounts in the low $100,000’s or even $10,000’s — a degree of dominance that could cost tens of millions at the federal level.

  • Strong disclosure laws and enforcement can make a real difference.

– California’s strong disclosure regime and relatively low dark money numbers, in spite of the highest outside spending amounts by far, show that effective laws and enforcement can keep secretive spending low.

– Other states, such as Arizona, continue to gut regulations and see relatively massive amounts of dark money.

  • That so few states even keep adequate track of outside spending underscores the extent of the transparency problem.

– Only 12 states’ records were available in sufficiently verifiable and usable form and included a realistic sweep of election ads (not just ads that plainly said “vote for” or “vote against” a candidate). Of these, just nine held statewide elections in 2006, 2010, and 2014, permitting a meaningful look at trends before and after Citizens United in 2010.

Finally, the report identifies patterns in past dark money spending to offer clues as to the kinds of contests we are likely to see such spending in state and local elections this year.

Read the full report, Secret Spending in the States.

Read more about the Brennan Center’s work on money in politics.