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Analysis

The Rise of Shadow Parties

A Brennan Center analysis shows both Republicans and Democrats have found a new way to set up super PACs and rake in dark money, further weakening our campaign finance system.

October 22, 2018

Since the Supreme Court’s 2010 Citizens United ruling ushered in a new era of big money in polit­ics, congres­sional party finances have dramat­ic­ally shif­ted. The parties now increas­ingly rely on loosely regu­lated shadow parties with close ties to congres­sional party lead­ers and compar­at­ively less on offi­cial party commit­tees. 

And a new Bren­nan Center analysis shows that so far in the 2018 cycle, the trend is intensi­fy­ing.  

Here’s why this matters:

  • Shadow parties use super PACs to raise unlim­ited contri­bu­tions. In fact, their revenue comes over­whelm­ingly from massive contri­bu­tions larger than the median Amer­ican house­hold’s income. By contrast, contri­bu­tions to offi­cial party commit­tees are limited, and the commit­tees tend to raise around a third of their money from small donors of $200 or less.
  • In addi­tion, the source of much of the shadow parties’ revenue is hidden from the public. Three of the Hill parties (the excep­tion is House Demo­crats) make use of dark money groups that hide their donors and are run by the same people as their sister super PAC. Our estim­ate of dark money raised by shadow parties in the 2018 cycle is already more than twice the amount they raised for the last midterms. Offi­cial party commit­tees can’t raise dark money. 
  • Shadow parties aren’t really inde­pend­ent. They are run by party lead­ers’ trus­ted former aides or hand-picked oper­at­ives. In many cases, party lead­ers person­ally make fundrais­ing appeals for their affil­i­ated shadow parties.

In other words, a system that relies more on shadow parties and less on offi­cial party commit­tees further increases the already outsize influ­ence of big money in elec­tions and makes it harder for Amer­ic­ans to see who’s bank­rolling polit­ical campaigns. 

The follow­ing graphs show that so far in 2018, three of the four Hill commit­tees are on track to see their fundrais­ing rivaled or over­shad­owed by their outside-group affil­i­ates. (The excep­tion is the House Demo­crats, who continue to rely on massive fundrais­ing by the offi­cial commit­tee.) Senate Repub­lic­ans’ shadow party groups already outraised the offi­cial commit­tee last cycle. So far in 2018, both Repub­lic­ans and Demo­crats in the Senate have seen the offi­cial party outraised by the shadow party groups. 

The follow­ing chart shows that money from megadonors of $100,000 or more makes up the over­whelm­ing share — almost 90 percent — of shadow party super PACs’ fundrais­ing. In fact, most of these groups’ money comes in amounts that would be illegal to give directly to a Hill commit­tee. Donors are limited to giving $474,600 in the 2017–18 elec­tion cycle to a congres­sional party commit­tee, yet across the four affil­i­ated super PACs, donors exceed­ing that limit provided 73 percent of the money contrib­uted. In addi­tion, party commit­tees are prohib­ited from accept­ing contri­bu­tions from corpor­a­tions and unions. But the shadow party groups take millions from these special interests. 

The follow­ing graph shows that the parties are bene­fit­ing from tens of millions of dollars raised from donors unknown to the public. These amounts are diffi­cult to estim­ate; the only source of inform­a­tion for the current cycle is the groups’ own state­ments (for past cycles, groups’ tax returns provide more inform­a­tion). Our estim­ate of the amount of dark money raised by shadow parties this cycle is likely too low; it’s based on groups’ announce­ments and press reports from recent months. Never­the­less, this cycle’s party-affiil­ated dark money total is already more than twice that of the last midterm elec­tion cycle. 

Shadow Party Profiles

Shadow party groups spend exclus­ively on candid­ates from their party running for one or the other cham­ber of Congress. They are run by former top aides to the party leader or the offi­cial party commit­tee, or were chosen to run the group by the party leader. Party lead­ers typic­ally help them fundraise. They can share consult­ants or other stra­tegic vendors with the offi­cial party or mimic the offi­cial party’s strategy based on publicly avail­able inform­a­tion. Despite all this choreo­graph­ing, shadow party groups main­tain just enough formal inde­pend­ence to allow them to legally raise unlim­ited and often secret money.

Below, we profile the four super PACs and three dark money groups that oper­ate as big-money arms of the congres­sional parties.

House Demo­crats

  • House Major­ity PAC (super PAC)

Minor­ity Leader Nancy Pelosi has long helped raise funds for the House Major­ity PAC. Virtu­ally every staff member’s biography on the super PAC’s website lists prior work at the Demo­cratic Congres­sional Campaign Commit­tee. The group’s pres­id­ent is Alix­an­dria Lapp, who used to be in charge of inde­pend­ent expendit­ures at the DCCC. 

There is no dark money group affil­i­ated with House Demo­crats’ lead­er­ship.

House Repub­lic­ans

  • Congres­sional Lead­er­ship Fund (super PAC)

The Congres­sional Lead­er­ship Fund’s found­ing pres­id­ent was Brian Walsh, who was previ­ously the polit­ical director for the National Repub­lican Congres­sional Commit­tee. At the end of 2016, Corry Bliss took over the super PAC, reportedly at the insist­ence of Speaker Paul Ryan. The group’s treas­urer, Caleb Crosby, is a former offi­cial with the National Repub­lican Congres­sional Commit­tee. Speaker Ryan and House Major­ity Leader Kevin McCarthy have head­lined fundraisers worth tens of millions for the group. Ryan was at an event where casino magnate Shel­don Adel­son pledged $30 million to the Congres­sional Lead­er­ship Fund, and when the speaker decided not to seek re-elec­tion, Bliss thanked him for the “nearly $50 million” raised by the super PAC.

  • Amer­ican Action Network (dark money group)

Amer­ican Action Network and the Congres­sional Lead­er­ship Fund are both run by Corry Bliss, and the groups share board members. AAN has spent exclus­ively in favor of House GOP candid­ates since 2012, and in the current elec­tion cycle alone it has given its sister super PAC over $20 million in dark money. 

Senate Demo­crats

  • SMP (formerly Senate Major­ity PAC) (super PAC)

SMP’s pres­id­ent is J.B. Poer­sch, former exec­ut­ive director of the Demo­cratic Senat­orial Campaign Commit­tee. The group employs former staff of Minor­ity Leader Chuck Schu­mer. When Harry Reid was minor­ity leader, SMP was run by former top Reid staffers. But when Schu­mer took the reins as minor­ity leader in 2016, his former staff took over SMP. Reid reportedly raised money for SMP when he was minor­ity leader. The super PAC has craf­ted ads based on mater­ial posted on Demo­cratic Senate candid­ates’ websites.

  • Major­ity Forward (dark money group)

Major­ity Forward is run by the same people as SMP, includ­ing its pres­id­ent J.B. Poer­sch, and the groups share office space. The two groups have the same spokes­per­son, who has described them as “allied organ­iz­a­tions.”

Senate Repub­lic­ans

  • Senate Lead­er­ship Fund (super PAC)

The Senate Lead­er­ship Fund is headed by Steven Law, a former top aide to Senate Major­ity Leader Mitch McCon­nell. McCon­nell has reportedly encour­aged top GOP donors to give to the super PAC. 

  • One Nation (dark money group)

One Nation and the Senate Lead­er­ship Fund are registered to the same address and both headed by Steven Law. Both groups also used to employ Ian Prior, a former secret­ary of the National Repub­lican Congres­sional Commit­tee. Major­ity Leader McCon­nell has reportedly direc­ted Repub­lican senat­ors to “steer big donors to One Nation.”

Some charts have been edited since public­a­tion to more effect­ively allow for compar­is­ons between charts.

(Image: BCJ/Shut­ter­stock.com)