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Dark money

Dark money

Dark Money refers to political spending meant to influence the decision of a voter, where the donor is not disclosed and the source of the money is unknown. Depending on the circumstances, Dark Money can refer to funds spent by a political nonprofit or a super PAC.

"Dark money" refers to spending meant to influence political outcomes where the source of the money is not disclosed. Here's how dark money makes its way into elections:

With this kind of spending, donors must be disclosed, contribution limits apply and organizations are allowed to coordinate their efforts to help elect a candidate. This is not dark money. These groups include candidate committees, political parties and traditional Political Action Committees (PAC).

Outside spending -- sometimes referred to as independent or non-coordinated spending -- refers to political spending made by organizations and individuals other than the candidate campaigns themselves. All outside groups that aren't political parties -- except for a few traditional PACs that make independent expenditures -- are allowed to accept unlimited sums of money from individuals, corporations or unions. With these donations, groups may engage in a number of direct political activities, including buying advertising that advocates for or against a candidate, going door to door, or running phone banks. However, these organizations are not allowed to coordinate their spending with political candidates or parties. While some outside groups -- like super PACs -- are required to disclose their donors, others are not. These nondisclosing organizations are referred to as dark money groups.

Whenever money is spent in a political election with the purpose of influencing the decision of a voter and the source of the money is not disclosed, it is dark money. Common types of organizations that can spend in elections while shielding the sources of their money are outlined in greater detail below.

Nonprofit, tax-exempt groups organized under section 501(c) of the Internal Revenue Code may engage in varying amounts of political activity. Because they are not technically political organizations, they are generally not required to disclose their donors to the public. These groups, like super PACs, cannot coordinate spending with political parties or candidates, and therefore are allowed to raise unlimited sums of money from individuals, organizations and corporations.

Super PACs can collect unlimited contributions and spend unlimited funds. But, they cannot contribute directly to candidates or political parties and must not "coordinate" their expenditures with candidates or parties. Super PACs' independent expenditures now account for the largest share of independent political funding. In the 2020 election, it is estimated that Super PACs spent 63% of the $2.6 billion of independent expenditures made by political parties, social welfare organizations and Super PACs.

Timeline

2020
In the 2020 elections, PACs made approximately 5% of total election expenditures of $14 billion.

In the 2020 election, it is estimated that Super PACs spent 63% of the $2.6 billion of independent expenditures made by political parties, social welfare organizations and Super PACs.

2020 election to cost $14 billion, blowing away spending records.

January 2020
The IRS' own "watchdog," the Treasury Inspector General for Tax Administration, issued an audit report in January 2020 asserting that the IRS has failed to identify 9,774 nonprofits that are politically active, have failed to register as required as "social welfare" organizations and should be assessed millions of dollars in penalties and fees.

Further Resources

Title
Author
Link
Type
Date

Dark Money

Jane Mayer

Book

2017

Dark Money | POV | PBS

POV

Web

References

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