'Dark money' helped pave Joe Biden's path to the White House

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WASHINGTON (BLOOMBERG) – US President Joe Biden benefited from a record-breaking amount of donations from anonymous donors to outside groups backing him, meaning the public will never have a full accounting of who helped him win the White House.

Biden’s winning campaign was backed by US$145 million (S$192 million) in so-called dark money donations, a type of fundraising Democrats have decried for years. Those fundraising streams augmented Biden’s US$1.5 billion haul, in itself a record for a challenger to an incumbent president.

That amount of dark money dwarfs the US$28.4 million spent on behalf of his rival, former President Donald Trump. And it tops the previous record of US$113 million in anonymous donations backing Republican presidential nominee Mitt Romney in 2012.

Democrats have said they want to ban dark money as uniquely corrupting, since it allows supporters to quietly back a candidate without scrutiny. Yet in their effort to defeat Trump in 2020, they embraced it.

For example, Priorities USA Action Fund, the super political action committee that Biden designated as his preferred vehicle for outside spending, used US$26 million in funds originally donated to its nonprofit arm, called Priorities USA, to back Biden. The donors of that money do not have to be disclosed.

Guy Cecil, the chairman of Priorities USA, was unapologetic. “We weren’t going to unilaterally disarm against Trump and the right- wing forces that enabled him,” he said in a statement. Campaign finance laws, in theory, are supposed to limit the influence big money has over politicians. But the system has gaping loopholes, which groups backing Biden and other candidates, have exploited.

“He benefited from it,” said Larry Noble, a former general counsel at the Federal Election Commission. A Biden spokesman didn’t respond to attempts to seek comment. His campaign called for banning some types of nonprofits from spending money to influence elections and requiring that any organisation spending more than US$10,000 to influence elections to register with the FEC and disclose its donors.

Deep pockets

Biden raised more than US$1 billion for his campaign, which can accept donations of up to US$2,800 per election from individuals. That included US$318.6 million from donors who gave less than US$200 each. The rest of the money Biden raised came from donors with pockets deep enough to give as much as US$825,000, with that money being divided among the Democratic National Committee and 47 state parties.

Dark money is not the biggest source of cash to campaigns. Wealthy donors can write eight-figure cheques to super-PACs, Noble pointed out. Joint fundraising committees that raise money for campaigns and parties can bring in chunks of US$830,500.

In September, Michael Bloomberg said he would spend US$100 million to help Biden in Florida, allowing Democrats to divert money to other must-win states. Biden lost Florida but flipped five states that Trump won in 2016.

Donors who want to avoid disclosure can give to political nonprofits, like Defending Democracy Together, which spent US$15.6 million backing Biden, and aren’t required to disclose their contributors to the FEC. Donors can also give money to a nonprofit that in turn gives the money to a super-PAC, like Priorities USA did.

Candidates and their campaigns can’t coordinate spending with such groups under federal law. And that lack of disclosure worries reform groups. Big donors – individuals or corporations – who contributed anonymously will have the same access to decision makers as those whose names were disclosed, but without public awareness of who they are or what influence they might wield.

“The whole point of dark money is to avoid public disclosure while getting private credit,” said Meredith McGehee, executive director of Issue One, which advocates for reducing the influence of money on politics. “It’s only dark money to the public.” Battleground Attack Ads Overall, Democrats in this election cycle benefited from US$326 million in dark money, according to the Centre for Responsive Politics. That was more than twice the US$148 million that supported Republican groups.

Some of the Democratic groups that relied on dark money in whole or in part spent heavily on early ads attacking Trump in critical battleground states like Michigan, Pennsylvania and Wisconsin. The groups started spending while Biden’s relatively cash-poor campaign was struggling to raise money for the primaries. Future Forward PAC, a super-PAC that spent US$104 million backing Biden, got US$46.9 million from Facebook co-founder Dustin Moskovitz, US$3 million from Twilio chief executive officer Jeff Lawson and US$2.6 million from Aeric Schmidt of Alphabet Inc, the parent company of Google.

But its biggest source of funds was its sister nonprofit, Future Forward USA Action, which contributed US$61 million. The names of those who put up the US$61 million don’t have to be disclosed. The Sixteen Thirty Fund, a nonprofit that sponsors progressive advocacy, donated a total of US$55 million in the 2020 election cycle to Democratic super-PACs, including Priorities USA Action Fund and Future Forward PAC, FEC records show. That total was much more than the US$3 million it gave in 2018.

Amy Kurtz, executive director of the Sixteen Thirty Fund, said the surge of money to the group, which doesn’t disclose the names of its donors, included people who previously gave to Republicans or had not been engaged in politics. The flood of dark money to Democrats and progressive groups has complicated their effort to reform the system. Senator Sheldon Whitehouse, a Rhode Island Democrat, has blamed dark money for persuading Republicans to block legislation to address climate change and assuring judges who share their views are appointed to the courts.

“Dark money is toxic to democracy – period,” Whitehouse said in a statement. “The fact that progressive groups have learnt to fight back using similar tactics is no excuse for continuing the plague of dark money in America.” Kurtz says her group would prefer rules that eliminated dark money. “We have lobbied in favour of reform to the current campaign finance system,” she said, referring to HR 1, an election reform measure Democrats have proposed that includes more rigorous disclosure of donors to political nonprofits, “but we remain equally committed to following the current laws to level the playing field for progressives.”

Even Cecil, who runs the super-PAC supporting Biden, said the group supports reform. “We still look forward to the day when unlimited money and super-PACs are a thing of the past,” he said.

Bastion Balance Seoul.