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‘Dark money’ groups pour tens of millions of dollars into N.J. elections. Lawmakers want to know their donors.

Critics of the proposal, including the ACLU, say it goes too far and would infringe on free speech rights.

Dark money in New Jersey
Dark money in New JerseyRead moreJon Snyder

Money floods New Jersey when it’s election season.

With power to be had in Trenton, candidates, political parties, and advocacy groups spend large amounts to win votes and influence policy agendas.

And where a lot of that money comes from is a mystery.

Some advocacy groups do not have to identify their donors. It’s known as “dark money,” and has amounted to tens of millions of dollars in recent election years, with these groups outspending traditional political parties and their affiliates.

That could change soon. A version of a bill that would shed some light on large donors has passed Senate and Assembly committees, and Gov. Phil Murphy supports the idea in principle.

“It allows us to truly, truly understand who is trying to influence the decision makers and influence voters,” said State Sen. Troy Singleton (D., Burlington), the bill’s primary sponsor.

But critics, including the ACLU of New Jersey, say it would be a threat to free speech because it would apply not only to election-related activities but also to the ACLU and other advocacy groups on policymaking. Potential donors might be dissuaded from giving to causes they support if they will be publicly identified.

“In a time like today, when things are as polarized as they are, and organizations like the ACLU, like LGBT rights groups, like abortion rights groups, or on either side of those debates, are so controversial, we want to make sure they can do their work without fear,” said state ACLU head Amol Sinha.

What dark money is

Traditionally, groups that seek to influence elections — campaigns, political parties, PACs — are subject to strict regulations.

At federal and state levels, they regularly file statements detailing contributions and money they’ve spent.

But some independent organizations — including 501(c)4 “social welfare” nonprofits, and 501(c)6 nonprofits such as chambers of commerce — don’t have to because they’re not primarily engaged in political work.

When these groups run negative political advertising, viewers have no idea who is behind the message, said Abby K. Wood, a professor of law, political science, and public policy at the University of Southern California.

Dark money also raises the possibility of pay-to-play donations and other unseemly attempts at influencing politics, said Jeffrey M. Brindle, executive director of the Election Law Enforcement Commission, the state’s campaign finance regulatory body.

Dark money in New Jersey

Independent spending increased from $39.1 million in the 2013 state legislative and gubernatorial elections to $49.7 million in 2017, well outpacing the growth in spending by state and county political parties, which increased from $28.2 million to $33.9 million.

In recent years, Brindle said, dark money is “dwarfing the spending by political parties, which has actually declined at the same time these groups have increased their spending and their clout in the elections.”

A 2018 report from ELEC found the top 25 special interest groups spent $74 million in 2017, of which $41.5 million came from independent spending.

What the bill does

The bill would require that quarterly campaign finance reports be filed by 527, 501(c)4, and 501(c)6 groups that spend more than $3,000 in one year on trying to influence elections, ballot questions, legislation, or government regulations.

They would identify expenses of more than $3,000 and donations exceeding $10,000. Donors giving more than $10,000 would be identified by name, address, occupation, and employer.

The bill also would explicitly include internet and digital advertisements and would bar foreign entities from creating independent expenditure committees.

It’s unclear how many donors would be identified under the $10,000 limit.

“The types of donors who are likely to give in excess of $10,000, if they don’t want to have their name and address included in a report, usually they’re sophisticated enough to still find a way to make the donation but it won’t be attributable to them,” said Austin Graham, a Campaign Legal Center expert focusing on state and local campaign finance and electoral systems.

Singleton said the $10,000 bar was meant to lessen the burden of the new law on some smaller groups that try to influence policy and not elections.

Electioneering vs. advocacy: The free-speech challenge

Campaign finance laws requiring disclosure of electioneering groups have been a trend in recent years, Graham said, but usually focus on electoral campaigns.

Requiring disclosure from groups trying to affect legislation is less common.

“From a public-interest standpoint, all this stuff is important because it does serve to give information to the voters and the public at large about the sources behind this political messaging,” Graham said, “whether it’s related to candidates or it’s related to legislation or regulations.”

The ACLU’s Sinha agreed more transparency is needed in election-related activities but said the bill goes too far beyond that.

“We’re talking about people who will ultimately be governing us. We should know where their motivations are and we should know where their funding comes from,” he said. “When it comes to issue-advocacy organizations that have nothing to do with elections for the most part, that are working on issues based on their mission statements, I think the same logic doesn’t necessarily apply.”

The ACLU has donors, Sinha said, who “would face controversy with their employers or their families or some other way if it was out there that they gave to the ACLU.”

Wood, the USC professor, said research is mixed on what effect disclosure has on speech.

“The chilling is not obvious and, in my research, seems to be negligible at best,” she said. “That cost is so small that almost any benefit of disclosure’s going to outweigh it.”

New Jersey may soon find out for itself.

Although Murphy’s office declined, as a matter of policy, to comment on the legislation itself, a spokesperson said the governor supports donor disclosure for 501(c)4 groups. Sweeney, the Senate president, backs the proposal.

The Senate version of the bill passed, 31-0, last month, and it was approved last week by the Assembly Appropriations Committee, though with amendments that will require another full Senate vote in addition to an Assembly vote.