A widely used loophole for funneling secret “dark money” into political ads closed quietly last weekend, as a federal judge concluded it thwarted Congress’ intent to have broad disclosure of political money. Chief Judge Beryl Howell, of the U.S. District Court for the District of Columbia, threw out a regulation adopted by the Federal Election Commission in 1980. The rule said that “non-political” groups, such as 501(c) nonprofit organizations, could ignore a disclosure law if donors’ contributions were earmarked for specific advertisements — an exception that wasn’t in the law passed by Congress. Howell’s decision was issued Friday evening.
She listed ways in which the regulation undercut the transparency principles of campaign finance law: “including informing the electorate, deterring corruption, and enforcing bans on foreign contributions being used to buy access and influence to American political officials.”
At Citizens for Responsibility and Ethics in Washington, the plaintiff in the lawsuit, Executive Director Noah Bookbinder, said, “This case closes one of the loopholes that has allowed the system to get out of control, and gets you back a little bit closer to a system of much more significant public information about who’s influencing politics.”
Practically speaking, Howell turned off a conduit through which some $180 million flowed in the 2016 campaign. The use of 501(c)(4) social welfare organizations has proliferated in recent elections, especially since 2010, when the Supreme Court’s Citizens United ruling relaxed the limits on corporate, union and wealthy individual donors.