Another Attempt to Shine a Light on Hidden Money

November 11, 2018; St. Louis Record

The 2018 midterm elections are not over in some parts of the United States as votes continue to come in and recounts—and possibly even runoffs—are being prepared. Certainly, the fallout of these elections will be felt for some time. One concern being raised in Missouri is about the use of hidden money (often referred to as “dark money”) in the gubernatorial campaign and how closely the candidate worked with the organization supplying the funds for campaign ads.

As reported by Carrie Bradon in the St. Louis Record, local attorney Elad Gross has filed a lawsuit against the former governor, Eric Greitens, and a 501c4 organization called A New Missouri, which has a mission to support a conservative agenda in the state. Initially, Gross’s investigation looked into whether 501c4 organizations had the right to publicize an individual’s contact information, as A New Missouri apparently had in ads against certain candidates. This later transformed into an exploration about the former governor having had some hand in coordinating the organization’s fundraising practices.

After several attempts, Gross has still not been given the access he seeks to records and information. The governor’s office is requiring payment for making copies, and requests to the nonprofit have been returned or gone unanswered. The lawsuit he filed against the organization was dismissed a short while ago as without basis, and with Gross lacking standing to file the suit. (Gross’s suit referenced a 1994 state law mandating that an organization’s beneficiaries have access to the organization’s records. Gross argued that A New Missouri seeks to benefit all residents of the state, so he is a beneficiary and should have access. The judge ruled that he is not eligible as he is not a member of the organization—which has no members—and he was not part of any group that had provided a substantial portion of the organization’s funding. Gross says he plans to file an appeal.)

That lawsuit concerned requests for documents that would reveal the names of donors to A New Missouri, so it ties to the issue of “dark money,” which NPQ has covered a fair bit. Earlier this fall, for example, Carole Levine wrote about some cracks appearing in the walls of donor secrecy. There are ups and downs in the attempt to hold 501c4 nonprofits accountable, she reported, and this may be another case of a “down” moment.

It does seem difficult if not impossible to determine who donates to the 501c4s that have such a loud voice in politics these days, as was explained in a 2016 report by the Brennan Center at NYU Law. Websites like Issue One, which has posted a list of donors to the top 15 groups, may represent cracks in the facade. On the other hand, the Trump administration and the Treasury Department may have repaired that wall not long ago, announcing a change in the reporting requirements of many 501c organizations, including 501c4s and 501c6s. In the past, names of donors had to be listed on an organization’s filings with the IRS but were kept hidden from the general public. Now, they do not even have to be listed. One suggestion is that this makes it much easier for groups to accept funds from foreign donors seeking to have an influence on US elections.

So, the ups and down continue on the roller coaster ride, and the lightbulb pendulum keeps swinging from illumination to darkness. Of course, if the Johnson Amendment is repealed, this all gets even more confusing, so it’s imperative that we remain vigilant and aware of what is being decided.—Rob Meiksins