-On one side of political donations,
large quantities of money
are publicly reported and easily tracked,
but the other side is undisclosed and unlimited.
This influential campaign money
is commonly referred to as "dark money,"
and, so far, hundreds of millions of dollars
of this type of money have been spent on our elections.
We generally avoid using the phrase "dark money,"
but we'll use it here because it's a popular term
to describe the campaign money
that's nearly impossible to track.
First off, you might ask, "How is it legal for unlimited
and undisclosed amounts of money
to float through our political system,
and how did dark money
even become a thing in the first place?"
It starts with a Supreme Court case and the tax code.
But don't worry.
We don't get too into the details,
so stick with us a little bit.
In 2010, when the Supreme Court ruled on its Citizens
United case, labor unions and corporations,
including nonprofits incorporated
under the section 501(c)(4) of the US tax code,
suddenly became able to spend
unlimited sums of money on politics.
Needless to say, it wasn't long before
we saw a bunch of groups seek this 501(c)(4) tax status,
which is a designation reserved for "social welfare" nonprofits.
Registering under that tax code
basically meant that these groups became classified
as working for the well-being of society,
and some of that work can involve politics.
Politics can't be the group's "primary purpose,"
but there's no real way to quantify "primary purpose,"
so this restriction is really hard to enforce.
Unlike other groups, nonprofits generally
don't have to reveal their donors,
even if they're involved in electoral politics.
So for donors who are looking to influence elections
but don't want to reveal their identity,
for whatever reason, this is an attractive option.
While these groups can't coordinate
directly with the candidate,
their large sums of money have potential
to seriously influence an election.
Another option for donors who wish to stay anonymous
is limited liability corporations, or LLCs,
which have very few reporting requirements in some states.
In my reporting, I often come across these entities
with cryptic names and few clues about who's created them,
who's funded them, and what they're spending their money on.
LLCs can make unlimited donations
to super PACs to influence elections,
and even though super PACs have to reveal their donors,
we can't learn much from a donor named HFNWA LLC or BV2 LLC.
The most well-known example
of the power of undisclosed money
is a network built by conservative billionaires
Charles and David Koch.
Over many years, the Koch brothers built a labyrinth
of politically active nonprofits and LLCs,
most of which went toward voter mobilization
and into ads attacking former president
Barack Obama and Congressional Democrats.
Notably, during the 2012 elections, in 2012,
the 17 groups that made up
the Koch network raised at least $407 million
while masking the sources of those donations.
That money is equivalent to about four times
the amount that Bernie Sanders raised in all of 2019
for his presidential campaign,
which brought in more than a million donors.
There are plenty of undisclosed sources of money
on the left, too.
One of them is Democracy Alliance,
which is a network of wealthy donors.
This election cycle, Democracy Alliance plans
to direct $200 million to Democratic groups.
They don't really talk about this publicly,
but we know this because we reviewed internal documents.
Labor unions and left-leaning advocacy groups
are powerful sources of campaign money on the left
because they have millions of members and supporters
all across the country who pay dues or who donate to them,
and these groups don't have to disclose their donors.
In the past, we've seen both parties
take advantage of dark money groups,
and these groups are already active
in the 2020 elections at all levels --
local, state, presidential, Congressional, Senate --
and we'll most likely see them proliferate even more
because the Internal Revenue Service
has loosened regulations on these groups in recent years.
Politically active nonprofits are increasingly
becoming popular among wealthy donors from both parties
because they want to keep their privacy
and avoid getting attacked by critics
who try to target them politically.
Hopefully this brings dark money groups into light for you.
If you have any other questions about campaign money
and the 2020 elections, just tweet me
and I'll answer them in the next video.