With Roger Sollenberger, Political Reporter

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This week’s Big Dig . . . How Republican Election Regulators Are Making ‘Dark Money’ Even Darker for 2024

For years, dark money groups have enjoyed certain advantages that offer donors anonymity—putting the proverbial “dark” in “dark money.” 

But late last month, one small outside group quietly told election law regulators to shove off when watchdogs demanded to see the group’s donors, a move that legal experts say could signal a profound shift in campaign finance disclosure laws and make dark money even darker just in time for the 2024 election.

The Winter’s Tale

The group—a left-leaning climate change advocacy organization called “Protect Our Winters Action Fund”—was standing its ground after a notice from the Federal Election Commission flagged the group’s failure to disclose contributors, as the law requires.

In response, POWAF—a 501(c)(4) nonprofit—simply declined to disclose its donors. For justification, they cited a policy statement the FEC’s three Republican commissioners released in June 2022, signaling they would not enforce “dark money” disclosure rules as courts had previously decided.

That policy statement does not carry the force of law. And legal experts told The Daily Beast that the memo—written in response to two federal court rulings that had interpreted the law the opposite way—undercuts judicial decisions favoring transparency.

Instead, these experts said, GOP commissioners are apparently signaling they will unilaterally refuse to enforce the law as courts have defined it. With all FEC enforcement decisions requiring support from four of the six commissioners, this three-commissioner Republican contingent could block any action.

Return to the Dark Ages

While the mechanisms involved may seem highly technical and obscure, the potential consequences are broad and easy to understand.

In short, transparency advocates say, if outside groups like POWAF take advantage of the GOP commissioners’ posture, those groups could continue to keep their donors secret—even though the courts have ruled otherwise—without risking penalties. The upshot, experts worry, could be a murky operational environment for some of the most powerful and well-funded outside spending groups in the country, during an election cycle that is, once again, shaping up to be the most critical in recent history.

Brendan Fischer, a campaign finance lawyer and deputy executive director of the watchdog group Documented, said that half the commissioners are undercutting the rulings of two federal courts, allowing dark money groups to “continue hiding their donors.”

“A D.C. District Court and the D.C. Circuit have both held that nonprofits which spend money on independent expenditures must disclose their political contributors,” Fischer told The Daily Beast. “But just half of the FEC’s commissioners are aiming to protect dark money and render those decisions meaningless.”

We’re all looking for the guy who did this

What’s more, the crux of the GOP’s interpretation was to put the blame on the very agency that they run.

In brief, a U.S. District Court and a federal appeals court scrapped the old disclosure regulations as too narrow, significantly expanding donor transparency for dark money groups that spend money in elections.

In response, the FEC issued detailed new guidance. But years later, these commissioners said that their agency has still failed to, in their view, provide “definitive guidance.” And because the old regulations were vacated and removed from the books altogether, the GOP interpretation raises the question of whether dark money groups are required to disclose any donations at all.

“It seems very unlikely that the FEC will enforce the law and demand that any politically-active dark money groups disclose their donors,” Fischer said. “According to that 2022 statement, the GOP Commissioners will continue narrowly interpreting disclosure requirements, and only open an investigation under an impossibly narrow set of circumstances.”

Brett Kappel, a campaign finance law specialist at Harmon Curran, said the Republican commissioners were sending a clear message with their statement.

“FEC Republicans—keeping dark money dark since January 2010,” Kappel added, a reference to the year that the conservative Supreme Court’s Citizens United decision opened the door for limitless and anonymous political spending.

It’s all relative

Protect Our Winters didn’t return a comment request, but the three Republican commissioners—Chairman Sean Cooksey, Commissioner Allen Dickerson, and Commissioner Trey Trainor—provided a statement saying they would enforce the law in line with “the applicable statutes” and “relevant” court rulings.

“Any claim that Commissioners have signaled they will not enforce disclosure laws is patently false,” the statement said. “As our 2022 policy statement says, ‘we intend to pursue enforcement in appropriate cases’ under the applicable statutes requiring donor disclosure, consistent with relevant judicial decisions.”

Democratic Vice Chair Ellen Weintraub declined comment.

Big fail

Stuart McPhail, senior litigation counsel for CREW, said the Republican commissioners are heralding “a return to darkness.”

“So what we have now is this nonprofit saying it’s simply following that guidance and not disclosing contributions,” McPhail told The Daily Beast. “But the fact that they’re citing this wrong memo is a bad sign.”

He torched the memo as a “wholly undemocratic” statement that “makes the law for themselves” and “borders on contempt of the court.”

“It breaks the promise of Citizens United—that there will be disclosure, while in reality there’s less and less, even when the courts themselves are requiring more,” McPhail said.

He also pointed out that his organization has grounds to file a new lawsuit.

“There’s a strong argument for abdication of duty here. A police officer can’t say, ‘I’m going to stop enforcing the speed limit,’ but reading between the lines of this policy statement, that is their view,” he said.

This is an excerpt. The full article, with more detail about the case and its implications, can be read here.

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From Roger’s Notebook...

Media friendly. The FEC has reassured Sony Pictures Television that it is not illegal to continue producing and distributing the hit TV show, The Good Doctor.

The advisory opinion was a response to a question posed in November by political lawyers representing Sony, who—apparently out of an abundance of caution—wanted to make sure that the production company wasn’t in danger of violating the ban on corporate in-kind contributions to candidates.

The catalyst was the candidacy of Hill Harper, an actor and author running in the Democratic primary to replace outgoing Michigan Senator Debbie Stabenow. Harper, a primetime TV veteran, has held a lead role on the show since 2017. Sony’s lawyers essentially wanted to know whether the FEC would view the production and distribution of the show as paid advertisements endorsing Harper’s candidacy.

The FEC said no, that would not violate the rules. In support, the commissioners cited a number of facts supporting Sony’s case that it would just be business as usual, and well covered by the “media exemption” for in-kind contributions.

While that might seem to be an obvious conclusion, there’s one notable element—the silence of Republican Commissioner Sean Cooksey on the issue.

Cooksey has previously taken advantage of media exemption disputes to argue that one prong of the exemption test—requiring media entities to serve a “legitimate press function”—should be scrapped altogether.

That prong, Cooksey said, provides a “class of ‘institutional press’ a ‘constitutional privilege beyond that of other speakers.’” Instead, he reasoned, all media enjoys First Amendment protections, “whether done by individuals or corporations, regularly or sporadically.” That broad stroke would potentially create an opening for illegitimate political organizations and operatives to style themselves as journalists—the very “advocacy journalism” that Republicans love to deplore.

This case was apparently so cut and dried, however, that Cooksey didn’t seize the moment.

Scamalot. Independent presidential candidate and conspiracy theorist Robert F. Kennedy Jr. came under federal scrutiny this week for campaign payments to his daughter-in-law that potentially violate the ban on personal use of campaign funds.

In a notice to RFKJ’s campaign this week, first reported by CNBC’s Brian Schwarz, an FEC analyst observed that “your report discloses salary payments to members of the candidate’s family that possibly constitute personal use of the committee's campaign funds.” Salary to a candidate’s family qualifies as personal use, the notice said, “unless the family member is providing bona fide services to the campaign.” If a family member does provide bona fide services, the letter said, payments in excess of fair market value would also violate the law.

The letter doesn’t identify the family member in question, but campaign expense reports show that it could only be Kennedy’s campaign manager—daughter-in-law Amaryllis Fox Kennedy, who was named campaign chief in October, replacing ex-Rep. Dennis Kucinich (D-OH).

But despite “lacking any obvious experience in political campaigns,” Amaryllis Kennedy—a former CIA officer, television host, and Marianne Williamson stan who met the anti-vaccine zealot’s son at Burning Man and later married him on Cape Cod—has received at least $70,000 in campaign funds, all for “administrative” services, CNBC reported. That data, however, only covers payments through the end of September—the month before her father-in-law gave her the major promotion.

Get with the program. On Jan. 7, the FEC notified Republican House candidate Mayra Flores, a former member of the House, that she appears to have violated the ban on personal use by paying herself a salary outside of the federal guidelines.

The problem, however, is that this notice came weeks after the FEC approved a final rule revising the law governing candidate salaries, which among other things changed the timeframe for the ban. Candidates were previously allowed to collect a limited campaign salary, but only after the ballot filing deadline in their state; the revision changed that to whenever they file at the federal level.

Flores—who was recently accused of stealing other people’s photos of their Mexican cooking and passing them off as her own—filed her federal candidacy in July. Over the next three months, her campaign paid her $15,000 in three equal salary installments.

The FEC notice, however, cites the Texas state filing deadline of Dec. 11. “Salary payments made before this date constitutes a personal use of campaign funds,” the letter said.

On one hand, the FEC may be able to make the case that Flores technically did violate the rules as written at the time of the payments. However, the notice was sent after the commission adopted the new rules, which will empower ordinary would-be candidates and were nationally reported to significant acclaim. The commission may very well view the Flores case in practical terms as anachronistic and not an enforcement priority.

Zombie PAC. Leadership PACs are so under-regulated that there’s essentially nothing stopping them from spending money and wielding influence—not even death.

In 2022, Rep. Jackie Walorski (R-IN) was killed in a tragic car wreck, alongside her 28-year-old campaign manager and a county GOP chair. As of last month, however, Walorski’s leadership PAC was still making maximum $5,000 contributions to her surviving political allies.

This week, the PAC, “Jump Into Action For Conservatives To Keep Our Ideas Elevated” (JACKIE PAC), filed a year-end report disclosing max donations to two committees—the campaign for Rep. Kevin Hern (R-OK), and the House Conservatives Fund, the leadership PAC belonging to fellow Indiana conservative Rep. Jim Banks.

That brings the LPAC’s contributions since Walorski’s death up to eight, according to FEC data, for a total $40,000 in support from beyond the grave.

More From The Beast’s Politics Desk

An exclusive report from Sam Brodey draws on public records revealing that North Carolina GOP gubernatorial front-runner Mark Robinson, the state’s current lieutenant governor, has met privately with one of the highest-profile election deniers in the country—Ginni Thomas, conservative activist and wife of Supreme Court Justice Clarence Thomas. Read all the details in Sam’s reporting here.

Believe it or not, there was a time when a Donald Trump “constitutional crisis” was a hypothetical. That’s obviously no longer the case today, as Trump has created multiple bona fide constitutional crises that are now all converging at the same time. The question is what will a conservative Supreme Court do? Jose Pagliery laid it all out for you this week.

Oversight Chairman James Comer has attacked Hunter Biden’s business dealings for their opacity. But I reviewed dozens of real estate, tax, and business records showing that Comer’s own shell company is far from transparent, holding fewer properties than he claims, getting shut down twice by the state of Kentucky, and seeming to serve as a corporate shelter for revenue and assets that Comer has never reported. The receipts, as they say, can be found here.

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