POLITICS

Unprecedented amount of 'dark money' fuels midterm races

Midterm campaign spending has seen a record amount of 'dark money' from groups that don't disclose donors

In Kentucky's U.S. Senate race, crowded with attack ads from both sides, one group has spent millions praising Senate Minority Leader Mitch McConnell as a friend of the state's coal industry and flaying his Democratic challenger for cashing checks from "anti-coal" environmentalists.

Whether the coal industry is helping to pay for those ads remains a mystery. They come from the Kentucky Opportunity Coalition, a nonprofit advocacy group that does not report its donors.

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FOR THE RECORD:

Dark money: In the Oct. 19 Section A, an article about the rise of "dark money" campaign contributors said that a 2010 Supreme Court decision cleared the way for a certain class of nonprofits, such as AARP and volunteer fire departments, to plunge into big-money politicking. The article should have noted that not all nonprofits, including AARP, did so.
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The group has spent $14 million, a spokesman said, making it one of the larger players nationwide in this year's free-for-all of outside spending in the midterm election. All of the group's money has gone to ads that either praise McConnell or attack Democratic candidate Alison Lundergan Grimes as "a liberal who's wrong for Kentucky — just like Obama."

The coalition's work is part of an unprecedented amount of midterm spending by so-called dark money groups, a class of nonprofits that do not coordinate with candidates and don't disclose their donors.

Such organizations are responsible for more than half of all spending by outside groups in the most competitive Senate races in this election, according to one report from the Brennan Center for Justice, a nonpartisan policy group.

These nonprofits have been around for a long time and include such organizations as unions, volunteer fire departments and the AARP. The Supreme Court's Citizens United decision in 2010, which allowed unlimited political spending by corporations, cleared the way for their plunge into big-money politicking.

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FOR THE RECORD

June 20, 11:44 a.m. An earlier version of this article stated that a 2010 Supreme Court decision cleared the way for a class of nonprofits to plunge into big-money politicking. The article should have made clear that not all such nonprofits did so.

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Helping to drive the surge in this election are new groups including the coalition, run by former McConnell staffers, that are focused on helping just one candidate.

With overall spending in midterm campaigns poised to top $1 billion, campaign reform advocates say it's a troubling preview of the lack of transparency voters can expect in the presidential election in 2016.

"It's a big question mark — is this the future of political spending?" said Ian Vandewalker of the Brennan Center. "Is that going to become the new normal, this kind of money focused on one candidate, and we don't know where it's coming from?"

Such groups aren't supposed to make politics their primary activity, but the rules are vague and rarely enforced.

The Internal Revenue Service, which regulates nonprofits, set off a controversy when it used politically charged terms to select some of these groups for extra scrutiny last year. The agency promises to draw clearer rules but not until after the election.

The Federal Election Commission, which enforces election laws, is usually deadlocked along partisan lines.

"If there's anything more dysfunctional than the IRS, it's the FEC," said Tara Malloy, senior counsel for the Campaign Legal Center, which advocates for disclosure in political spending. "It's becoming more and more apparent that the FEC and the IRS are not going to take any action, so even the most risk-averse groups are willing to put a toe in the water right now."

The groups were big players in 2012, spending more than $300 million. They have spent more than $100 million in this cycle, more than in any other midterm election, according to the Center for Responsive Politics. And that figure is probably far less than the actual total, since much of their spending never shows up on disclosure reports.

"We've opened the floodgates to allow this," said Laurie A. Rhodebeck, a political science professor at the University of Louisville. "It's detrimental to voters because if they don't know who's behind the money, they can't judge whether to trust the ad or not."

Most of that undisclosed money is still spent on behalf of Republicans, but Democrats also benefit.

The League of Conservation Voters has spent about $7.5 million on Senate races to "protect the pro-environment firewall in the U.S. Senate," said spokesman Jeff Gohringer. He declined to discuss who is funding the ads, however.

"Folks just want to be part of taking action on the climate crisis," he said.

Much more Democratic money is flowing to "super PACs," another class of outside groups that also can take unlimited money, but which disclose their donors. The Senate Majority PAC, led by Majority Leader Harry Reid (D-Nev.), has spent more than $35 million.

A dark-money heavyweight among conservatives is Crossroads GPS, the nonprofit founded by Republican operative Karl Rove; the organization has spent heavily in Senate races, including a late surge of about $15 million in October.

There are ties among Rove's network, McConnell and the outside spending groups in Kentucky.

Steven Law, Crossroads president and a former McConnell campaign manager, is on the board of a super PAC affiliated with the Kentucky Opportunity Coalition. Scott Jennings, an advisor to both Kentucky groups, served as political director for McConnell's 2002 campaign and worked under Rove in the George W. Bush White House. And the Crossroads treasurer also serves as treasurer for the Kentucky organizations.

The Kentucky Opportunity Coalition was formed in 2008 but did little until last year, when it launched ads applauding McConnell for fighting the Affordable Care Act. The group can't legally coordinate with the McConnell campaign, but both are mostly following the same simple playbook: bashing Grimes by linking her to President Obama.

The attacks forced Grimes on the defensive. In an ad of her own, a shotgun-wielding Grimes blasts skeet targets, looks into the camera and declares, "I'm not Barack Obama."

Al Cross, a longtime political reporter and the director of the Institute for Rural Journalism and Community Issues at the University of Kentucky, believes Grimes' chance of winning is dwindling, and he says part of the reason is "the dark money ads that have really flooded the TV screens."

As for where the money is coming from, no one is saying.

"You're welcome to speculate," Jennings said. "I think various donors give to various organizations for all sorts of reasons."

Paul Lindsay, spokesman for Crossroads GPS and American Crossroads, a related super PAC, also wouldn't say whether those groups supported the Kentucky coalition. "We have the ability to coordinate with other outside groups, and certainly support the efforts" on behalf of McConnell, he said.

The stakes in Kentucky are high. If control of the Senate flips to Republicans, McConnell is likely to become majority leader.

Many of the coalition's ads have focused on the Kentucky coal industry, portraying it as besieged by new clean air standards proposed by the Environmental Protection Agency.

Most of the industry's contributions are going to McConnell, said the president of the Kentucky Coal Assn., Bill Bissett, but he has no idea whether it is behind the coalition's ads.

"No one's saying, 'Hey, Bill, I'm getting ready to give a bunch of money to the Kentucky Opportunity Coalition,'" said Bissett. "It would be odd for me to hear that specifically."

A spokeswoman for the McConnell campaign declined to comment on outside groups.

McConnell remains an advocate for the idea that donors should be able to spend unlimited amounts of money on politics while keeping their names secret.

In a speech in June to a meeting of donors assembled by the Koch brothers, the billionaire backers of conservative political causes, McConnell promised to fight efforts to force more disclosure of contributions, calling the current state of campaign spending the "most free and open system we've had in modern times."

Cross said McConnell was confident that voters care little about the source of money in elections.

"He's said this often, and has told me this at least once, that no election in America has ever been won on the issue of campaign finance," he said.

joseph.tanfani@latimes.com

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