Ending Secret ‘Dark Money’ Political Donations in New Jersey

By Nick Corasaniti

THE NEW YORK TIMES

June 11, 2019

Gov. Philip D. Murphy, a Democrat, is expected to sign a bill that will force  nonprofit advocacy groups to disclose their highest-spending donors. 

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Television viewers across New Jersey have been seeing a lot of Gov. Philip D. Murphy, standing tall against a deep blue sky in an ad campaign promoting his plan to raise taxes on the wealthy.

But while Mr. Murphy, a Democrat, may star in the ads, the money to pay for them came from a deep-pocketed group unknown to most constituents: New Direction New Jersey.

The nonprofit group is part of a constellation of advocacy groupsacross the country that can raise and spend unlimited amounts of money without revealing their donors, a so-called dark money system that watchdog groups say has an unhealthy influence on elections and political debate.

Now New Jersey is joining a growing number of cities and states, including New York City and California, taking aim at these groups and forcing them to publicly disclose the name of their donors.

The New Jersey Legislature, which is controlled by Democrats, passed a bill on Monday that Mr. Murphy was expected to sign requiring nonprofit groups seeking to influence elections or legislation to report donors who contribute $10,000 or more.

“At a time of increased misinformation and distrust it is more important than ever that the public is provided the information they need to make informed decisions on the policies that impact their lives,’’ said Troy Singleton, a Democratic state senator and chief architect of the bill.

The movement for greater transparency comes as nonprofit issue-oriented groups, such as the National Rifle Association and the League of Conservation Voters, pour more money into elections and lobbying.

About 25 percent of the nearly $4 billion in independent spending on federal elections since 2000 has come from dark-money groups, according to the Center for Responsive Politics.

The total amount spent on state races, however, is essentially unknowable, because of the byzantine matrix of campaign finance laws in each state that set different disclosure requirements.

In New Jersey, dark-money groups have been steadily on the rise: In the 2017 elections for governor and for legislative seats, $41 million of the $74 million spent by the top 25 highest-spending outside groups came from dark-money groups, according to an analysis by the state’s Election Law Enforcement Commission.

“These dark-money groups with benign sounding names have been operating in the shadows, spending large sums of money from undisclosed sources to influence the legislative, regulatory and election processes,” Mr. Singleton said.

In New York, Gov. Andrew M. Cuomo, a Democrat, recently signed a law to close a loophole in campaign finance laws that had allowed companies to create limited-liability companies with much higher donation thresholds.

Voters in New York City approved a ballot proposal last year meant to weaken the influence of big donors by lowering contribution limits for candidates who participate in the campaign finance system.

“It’s important that laws like New Jersey’s new bill introduce some transparency into the funding sources behind these corporate entities that are making expenditures in state elections,’’ said Austin Graham, a legal counsel at the Campaign Legal Center, a nonpartisan ethics watchdog in Washington.

The New Jersey bill would also require groups to report expenditures of more than $3,000 and would raise the contribution limit to state and county party committees in an effort to shift donors into a more transparent and regulated system.

Though lauded by campaign finance watchdogs, New Jersey’s bill, like campaign finance disclosure laws in other states, has been criticized by conservative and liberal activists as being overly broad.

The American Civil Liberties Union of New Jersey, which supports “carefully drawn disclosure rules” at a national level, has been a vocal opponent of the bill and sent a letter to state senators reiterating its concerns.

The A.C.L.U. and others argue that forcing groups that run ads trying to influence legislation — the kind that exhort voters to “call your senator if you support this bill” — to disclose the sources of their funding could scare off donors, particularly for groups involved in polarizing debates like abortion and gun control.

“It’s trying to make issue advocacy organizations seem like campaigns, which we’re not,” said Amol Sinha, the executive director of the A.C.L.U. of New Jersey.

The New Jersey chapter of Americans for Prosperity, a conservative political network, released a statement last monthexpressing similar concerns.

“We support the rights of all New Jerseyans to engage in the causes they believe in, and this legislation would make it harder,” said Erica Jedynak, the group's state director, in the statement. “This is a sad day for civic advocacy and charitable giving across the political spectrum.”

Mr. Murphy had also expressed concerns that the bill was too expansive and is anticipating revisions to be made or separate legislation to be passed by the end of this month, according to a statement from his office.

Finance watchdog groups said including issue advocacy groups like New Direction New Jersey was crucial to the legislation’s effectiveness.

“To be able to know who is funding that is to be able to know who may have significant influence with the governor,” said Mr. Graham. “Being able to know the big funders behind that group is important for the public.”

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