Editorial

Shine more light on political 'dark money'

State Attorney General Eric Schneiderman. (Sept. 19, 2012)

State Attorney General Eric Schneiderman. (Sept. 19, 2012) (Credit: Charles Eckert)

"Dark money" is slang for cash used to influence elections without its source being disclosed. There's been a tsunami of it crashing around in federal, state and local elections since a 2010 Supreme Court ruling freed corporations and independent groups to spend without limits on electioneering activities. One result was an infusion of about $400 million in dark money to influence campaigns in 2012.

This is unlikely to change in federal elections unless Congress enacts new disclosure rules, which it has shamefully failed to do. But election funding in New York can be different. Much of the undercover cash would be exposed to the light, in this state at least, under sound new regulations that New York Attorney General Eric T. Schneiderman wants to implement. He has held public hearings on the new rules in Manhattan and Albany, and will hold another Feb. 27 in Mineola.

The heightened transparency would be good for the body politic.


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Ideally, the IRS would revoke the tax-exempt status of groups whose primary activity is electioneering. In addition, the Federal Communications Commission should enforce its requirement that sponsors of political ads identify the people footing the bill. Unfortunately neither has stepped up. And too many elected officials have a vested interest in preserving the anonymity of their own party's "dark money" supporters.

Here's how Schneiderman is moving to fill the void.

Nonprofit, "social welfare" organizations that are actually deep-pocket purveyors of attack ads would be required to disclose their spending, and in some cases the names of their contributors.

The groups to be regulated are tax exempt and chartered under section 501(c)(4) of the federal tax code. Examples are the conservative Crossroads GPS, founded by Karl Rove, a former senior adviser to President George W. Bush, and the liberal Priorities USA, founded by two former aides to President Barack Obama. In this state, the best known example is the Committee to Save New York, which has spent about $12 million, largely in support of Gov. Andrew M. Cuomo's budget and tax agenda.

If such groups do business in New York, they'll be required to report the percentage of their expenditures that go to electioneering, such as attack ads, rather than to social welfare activities. IRS rules allow some political activity, but the groups are supposed to be primarily engaged in promoting social welfare.

Groups that spend more than $10,000 in connection with state and local elections would be required to file itemized reports of how that money was spent and to identity their contributors' names, addresses and employers in annual reports to the state attorney general's charities bureau. The information would be available to the public online. It should be posted as close to real time as possible.

The public will have until March 6 to comment, after which Schneiderman expects to formally adopt the rule.

Unbridled free speech is fundamental to democracy. But voters need to know who's doing the talking.

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