ProPublica shines a light on dark money

In the murky new world of money-and-politics reporting, even small victories are hard won

Over the last two years, political reporters have shined a glaring spotlight on super PACs and their funders. Just ask super PAC mega-donor Harold Simmons; The Wall Street Journal went as far as reporting where he buys his underwear. But journalists haven’t managed to shed nearly as much light on the inner workings of so-called “dark money” nonprofit groups—which, like super PACs, can collect and spend unlimited sums, but aren’t required by law to disclose their donors.

One notable exception is ProPublica. Recently, a team of ProPublica reporters peeled back the curtain a bit on a little-known dark-money outfit that played a role in allowing Republican to retain their grip on the House of Representatives last November. The story of how they managed do so says a lot about both the possibilities and pitfalls reporters face in the post-Citizens United era.

Shortly after the 2012 election, ProPublica staffers Olga Pierce and Justin Elliott set out to answer a vexing question: How did Republicans wind up with a 30-plus-seat advantage in the House when the majority of Americans cast ballots for Democratic candidates? Part of the answer, multiple analysts have argued, is that Democratic voters are often densely packed into urban areas. Another part, of course, is partisan gerrymandering. After far-reaching GOP victories in the 2010 elections, Republican-controlled state legislatures seized on the once-in-a-decade redistricting process to redraw district lines in their party’s favor.

Still, this kind of disparity had only been seen three times in the last century. Suspecting there might be something else at work, Pierce, Elliott, and Theodoric Meyer began combing through redistricting-related lawsuits, nearly 200 of which have been filed since 2010 (for more on specific cases and related reporting resources, check out the excellent site All About Redistricting). They quickly homed in on a little-known North Carolina case, which had dredged up a wealth of information on Republican tactics. “We were shocked when we started looking though the discovery documents,” Elliott recalls. “There was all this incredibly juicy stuff, most of which hadn’t been covered at all locally.”

Eventually, the team pieced together a remarkably detailed picture of the state’s redistricting process. The driving force was an outside group called the Republican State Leadership Committee, which is headed by former George W. Bush counselor Ed Gillespie. In the run up to the 2010 mid-term elections, RSLC launched a front group called Real Jobs NC, which used bare-knuckle tactics to attack Democratic candidates. This helped Republicans seize control of both chambers of the state’s legislature for the first time in a century. RSLC then hired national party operatives to guide the new Republican majority through the redistricting process. As ProPublica reported in December:

Through the spring and summer, legislators in charge of redistricting traveled the state holding public meetings at local colleges, soliciting comment and proposed maps from citizens….But that input had little influence on the districts that were eventually drawn.

Instead, the real maps were being produced behind the scenes by a team that based its operations at Republican Party headquarters on Hillsborough Street in Raleigh. Armed with advanced mapping software, [Republican operative Thomas] Hofeller and others crafted districts that would virtually guarantee big gains for the party.

The results? Although more than half of North Carolinians voted for Democratic candidates, “the state’s congressional delegation flipped from 7-6 Democratic to 9-4 in favor of Republicans.”

The North Carolina suit also shed light on the funding behind this effort—or rather, how obscure the funding can be. In his introductory letter to state lawmakers, RSLC President Chris Jankowski wrote that his organization had retained “a team of seasoned redistricting experts” who were helping redraw district lines in “a number of states” and would do the same for North Carolina. Jankowski added, “The entirety of this effort will be paid for using non-federal dollars through our 501c(4) organization.” In other words, RLSC—which, as a political advocacy organization, is required to disclose its donors— would fund its gerrymandering operation through its dark-money arm, allowing the group to mask the effort’s funders.

After the letter surfaced, Elliott began investigating this RSLC affiliate, known as the State Government Leadership Foundation. In some cases, ProPublica has managed to glean revealing details about dark-money groups by scouring the applications for tax exemption they file with the IRS. These documents—which are often overlooked by journalists—include detailed questionnaires about their budget, leadership, and programs. (For more these forms, known as 1024s, see this post from CJR’s Sasha Chavkin.)

The State Government Leadership Foundation’s application for nonprofit status turned out to be a goldmine. Because the IRS had initially rejected it, the group was forced to file an appeal. It ended up submitting nearly 300 pages of additional documents—including a list of seed-money donors. Those documents are now public records. And, as Elliott reported last week, they show that some of the nation’s biggest corporations, including Exxon, Pfizer, and Time Warner, put “up at least 85 percent of the $1.3 million the foundation raised in the first year and a half of its existence, starting in 2003.”

It’s important to note that these records don’t tell reporters nearly us much as we’d like. We don’t know, for example, whether the same set of donors who backed the group nearly a decade ago also funded the Republican cause in the redistricting battles in North Carolina and elsewhere. We don’t know who made the anonymous $1 million donation to the foundation recorded on its 2011 IRS forms, which are posted on ProPublica’s site—or any of the other donors whose cash gave new life to the foundation after it lay dormant in the late 2000s.

Still, what ProPublica dug up is noteworthy. Campaign finance buffs have long speculated that publicly traded companies would funnel their political donations through dark-money groups to avoid a backlash from customers and shareholders, but there is little proof that they have actually done so. And the bulk of super PAC cash in 2012 came from wealthy individuals, many of whom backed losing candidates—all of which has led many Beltway denizens to opine that the fuss about outside groups was overblown. Elliott calls his recent findings “one tiny, tiny piece of evidence that confirms that speculation that big public companies are—or at least were—actively financing these groups that are engaged in politics, defined broadly.”

His and his colleagues’ reporting also show just how disruptive outside money can be, especially on the state level, where there is less public scrutiny and even modest sums can have a big impact.

Unfortunately, the reporting techniques that yielded these insights won’t work wonders every time. The North Carolina case provided unusually rich detail about the role of outside groups and dark money in the redistricting process. And Elliott says it’s “incredibly rare” to get so much information about a dark-money group from the IRS. The donor records were available in this case only because of the group’s lawyer had volunteered them as part of the protracted appeal over the foundation’s nonprofit status.

In the end, this episode says as much about the obstacles reporters face when covering the murky new world of money and politics as it does about corporate cash or gerrymandering. “A lot of people argue that the new congressional maps in North Carolina and other places hurt voters in the aggregate and are a distortion of democracy,” Elliott said. “I think people should know how exactly that happened….But there’s only so much we can tell them. It’s one those Rumsfeldian ‘we don’t what we don’t know’ situations.”

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Mariah Blake writes for the United States Project, CJR's politics and policy desk. She is based in Washington, DC, and her work has appeared in The Atlantic, The New Republic, Foreign Policy, Salon, The Washington Monthly, and CJR, among other publications. Tags: ,