Opinion Pulling Up The Curtain On Dark Money

Eric Schneiderman is the attorney general of New York.

In the 1970s, public outrage over government contractors buying influence with a president led to groundbreaking reforms of the U.S. campaign finance system. That same sense of outrage should compel action today against the “dark money” tainting our elections. With a simple executive order today, President Barack Obama could end the secret payments from federal contractors seeking to sway our elections once and for all. Given the scale of the federal contracting universe, a move like that by Obama would go a long way, quickly, toward addressing one of the biggest modern threats to clean and fair elections.

When the Watergate scandal broke, Americans were appalled by the corrupt pay-to-play culture of Washington — where secret, outsized campaign contributions meant special treatment and preferred access to government decision-makers. Millions of dollars in illegal corporate contributions, at times explicitly tied to official acts, funded President Richard M. Nixon’s 1972 reelection campaign. The result was more than a dozen convictions of corporate executives, including the chairman of defense contractor Northrop Corp., who had personally arranged for $150,000 in illegal payments.


Reform followed quickly and, in 1974, Congress devised the modern federal campaign finance system. This included establishing an agency to police federal campaigns, limiting the size of campaign contributions and requiring public disclosure of all contributions. For the first time, the secret, transactional relationships in Washington were subject to meaningful public scrutiny.

The campaign finance system was far from perfect. But with improvements over time, including the 2002 McCain-Feingold legislation, prosecutors, watchdog groups, the media and ordinary citizens had the ability to see whether financial entanglements were driving government decisions. That is, until the system was upended by a series of Supreme Court rulings, most notably Citizens United v. FEC, which struck down limits on third-party spending on behalf of campaigns and candidates.

Outside spending on campaigns soared, with a significant share going to dark-money groups — industry associations and politically active nonprofits that can accept contributions of any size from virtually any source, including government contractors, without disclosing the identity of their contributors. Although independent from the candidate, these shadowy groups otherwise function as additional arms of the campaign — running ads, blanketing voters with direct mail and deploying workers to elect or defeat political candidates. And while the public is in the dark, it has become clear that candidates buoyed by dark money often know full well who footed the bill.

The Center for Responsive Politics estimates that dark money accounted for more than $600 million in spending in the last three federal elections. We know that industrial giants, military suppliers and other major government contractors spend disproportionately on lobbying and political action committees — for good reason. From 2000 to 2013, the top 10 federal contractors together netted $1.5 trillion from the federal government. But while PAC contributions, lobbying fees and federal contracts are public record, dark money is not.

Winning the affection of public officials was just as important in the 1970s, yet there is a crucial difference: To back a candidate today, government contractors don’t need to break the law. They can quietly write a seven-figure check to a dark-money group to achieve the same result — without leaving fingerprints or answering questions.

The opposition to the emergence of secret slush funds for attack ads is growing. While the federal government has yet to take action, several states have begun to push back. In 2013, my office issued new rules requiring dark-money groups participating in New York state elections to publicly disclose their contributors. Those rules led to a new disclosure regime for independent campaign expenditures administered by the state board of elections. Other states have also followed suit, including California, which enacted robust disclosure laws for local elections in 2014, and Montana, which did the same earlier this year.

Of course, state efforts cannot address the role of dark money in federal elections. Obama predicted in his 2010 State of the Union address that the Citizens United decision would “open the floodgates for special interests” and allow them “to spend without limit in our elections.” He was right.

Fortunately, the president has the power to tackle this problem in federal elections with the stroke of a pen. He can blunt the potential for dark money to corrupt the federal contracting process by signing an executive order requiring government contractors and their subsidiaries to publicly disclose all dark-money spending. This simple step would end a particularly disturbing aspect of the dark-money problem — all within the legal parameters set by Citizens United.

Just as we did four decades ago, it’s time to turn outrage at the pay-to-play culture of Washington into meaningful reform. The true outrage would be if Washington waits for another scandal before taking action.