'This is what's wrong with politics': Dark money reaches South Carolina

Tim Smith | The Greenville News

The mailer was colorful, with bold red headlines and images of a plate and fork, part of a growing national trend of political campaigns shaped by outside interests.

Aimed at state Sen. William Timmons' run for the 4th Congressional District seat being vacated by U.S. Rep. Trey Gowdy, the mailer alleged Timmons has a "history of buying his way to the top" and is hungry for "power, prestige and personal gain."

It was sent by the Fund for a Working Congress, based in Maryland, which lists a website that this week posted a video advertisement in support of state Rep. Dan Hamilton, who is among those running against Timmons for the congressional seat. The website offered no other information or link.

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Timmons said he does not know who is behind the mailing. He called the allegations "ridiculous" and said it was mailed district-wide.

"I've never heard of that group," Timmons said. "I have a problem with dishonest attacks. There's not much I can do about it other than point out that it's not accurate and just kind of put my head down and keep running and hope that the constituents of the 4th Congressional District know me for me and not for what some Washington special interest group is going to say about me one week before the election."

A spokesman for Hamilton's campaign said Hamilton had nothing to do with the mailer or with the ad posted on the organization's website.

"We have no idea who this group is or what they want, but what they did to William Timmons was unfair," said Logan McVey, a Hamilton campaign staff member. "Josh Kimbrell invited his friends from the swamp down to South Carolina, and now apparently they've all come to play. This is what's wrong with politics."

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Kimbrell, another candidate in the 4th District race, said it is disingenuous to accuse him.

"He can't blame me for a hit piece that they condemned against William Timmons," Kimbrell said.

Kimbell said Hamilton's campaign was the first in the election to be endorsed by a big political action committee, the National Association of Realtors, and Kimbrell said that group spent millions of dollars to try to defeat a federal tax reform proposal popular with most residents of the district.

"It's a fairly disingenuous statement of the Hamilton campaign to attack me for special interest funding when they were the absolute first campaign in this election to receive the endorsement of a special interest group," he said.

The Greenville News and Independent Mail have been unable to reach anyone connected to Fund For a Working Congress, including Tyler Moore, who is listed as the group's treasurer in federal election records.

Several donations to the group, federal election records show, are from American Policy Coalition, a group that discloses little about itself and has been linked to other political action committees around the country.

The money tossed around by such groups, used typically to support or oppose candidates through television advertisements or mailers, is called dark money. The term refers to the fact that the groups that spend the money do not have to disclose their donors, so those behind the efforts remain out of public view.

Such groups are "exploding" nationwide, one national expert said, and they have been a repeated visitor to South Carolina campaigns, though they mostly surface in congressional races and have not thus far been a major factor in the state's primary races.

Jordan Libowitz, a spokesman for Citizens Responsible for Ethics in Washington, which tracks dark money groups, said such organizations spend millions of dollars each year to influence elections while their backers remain in the shadows because they don't want the public to know who they are. He said spending by such groups is "exploding" nationally though it may not be felt equally in all races.

He said they generally are active in federal races, not state races.

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Libowitz said the group that recently attacked Timmons is considered a super political action committee, not a dark money group, because they disclose their donors. He said that Fund for a Working Congress, however, has been funded by American Policy Coalition, which is a dark money group.

Citizens Responsible for Ethics in Washington last summer reported that Fund for a Working Congress was one of two organizations funded by American Policy Coalition and paying for attack ads against opponents in a Georgia congressional race.

American Policy Coalition also funded two organizations that became involved with ads in a race pitting South Carolina Rep. Tommy Pope of York against Rep. Ralph Norman, another York County Republican, for the congressional seat vacated by Mick Mulvaney, whom President Donald Trump hired to be his budget director, CREW reported.

According to CREW, one of the organizations paid for ads boosting Pope while the other paid for ads attacking Norman. Norman won the race.

That is not the only experience South Carolina has had with dark money.

Earlier this year, American Futures Fund paid for a television ad boosting Catherine Templeton's GOP gubernatorial run. American Futures Fund, based in Iowa, is a 501(c)(4) organization, referring to the IRS code that allows such groups to be tax-exempt and collect unlimited donations but does not require them to disclose their donors.

In Anderson County earlier this year, residents received mailers from two dark money groups on opposite sides of state Rep. Brian White, chairman of the House Ways and Means Committee, who is running for re-election along with other members of the House.

One group, Citizens Opposed to Arrogant Politicians, mailed flyers comparing White to Benedict Arnold, a skunk and a "self-serving pig."

"Remember," the flier stated, "even if a pig could wear a bow-tie, it's still a pig," a reference to White's wearing bow-ties.

Another group called the South Carolina Conservatives Fund defended White.

"When Brian White says no, special interests lie," the flier stated.

Neither group left any political fingerprints. They have no website and have not registered with the State Elections Commission.

In 2016, a South Carolina affiliate of the national group Americans For Prosperity, an anti-tax group affiliated with the Koch brothers, mounted a campaign against a proposed gas tax increase, including robocalls in the districts of some senators.

Then-Sen. Larry Martin, a Pickens Republican and chairman of the Senate Judiciary Committee, told the Senate he was sitting at home during dinner one night when he received a survey call informing him about "Senator Martin's efforts" to push an "Obama-style" gas tax increase of more than 70 percent.

Then the caller asked what he would tell Martin.

"I said, 'I don't have to tell him anything. You're talking to him,'" Martin told the Senate. "There was a long pause. The lady said, 'Are you Senator Martin? I said, 'Yeah, look at the little card of who you are talking to.' She said, 'You're not pushing the gas tax?' I said, 'No!' I said, 'Do you want to correct your script?' And she hung up."

The story brought laughter to the Senate floor but also touched a nerve among senators who were aware of widespread robocalls about the roads bill in the state then that some said were filled with misrepresentations about who was favoring a gas tax increase and by how much.

That year, while the gas tax increase didn't pass, Martin said he was targeted for defeat. He was ousted in a primary.

He was not the only senator who claimed to be attacked by outside dark money groups.

One of those who said he was targeted, Senate President Pro Tempore Hugh Leatherman, proposed a bill last year that would have required such groups to disclose their donors. That brought a cry from groups that said donors would face retaliation.

One dark money group, Concerned Veterans For America, an affiliate of Americans For Prosperity, argued that forcing disclosure would be unconstitutional.

The measure stalled in committee.

A House measure by Rep. Mandy Powers Norrell and Rep. Gary Clary of Pickens to regulate dark money did not make it to the House floor.

Clary, a retired circuit judge, said when he first ran for office in 2014, a dark money group sent a mailer criticizing his opponent and people thought he was behind it. Clary won but said he believes the mailer took votes from him.

"We can talk about the First Amendment all we want to, but in something as important as our Democracy, we have got to get to the bottom of this and let people know who is funding and fueling these third-party campaigns," he said.

USA Today in November 2016 reported that billionaire Charles Koch’s sprawling political network took in $139 million the previous year and spread much of that money to more than a dozen aligned groups and corporations to help push the industrialist’s free-market agenda in Washington and around the country.

Americans For Prosperity, the largest grassroots arm in the organization, received $23.25 million in 2015, according to the federal tax return of Freedom Partners Chamber of Commerce, the umbrella organization for Koch groups. Another Koch group, Concerned Veterans for America, received $14 million, USA Today reported.

Charles and David Koch are among the most known names in dark money, according to Dark Money Watch, a project of Map Light, which tracks political spending. Americans For Prosperity spent $14 million on federal races in the 2016 cycle, fourth on the list of top dark money spenders, according to Dark Money Watch.

In 2008, dark money groups spent $102.4 million, according to Dark Money Watch. In 2012, such groups spent $308.7 million. During the last three election cycles, according to Dark Money Watch, 30 percent or more of the outside spending on federal elections came from dark money groups.

Marguerite Willis of Florence, a Democrat running for governor, wants to regulate dark money.

"There should be better disclosure of the groups and individuals who are using 501(c)(4) or similar organizations to influence the direction of campaigns and legislation," she said. "We need to expose the dark money entering into our system of politics."

Why hasn't more dark money entered this year's races?

Chip Felkel, a Greenville GOP political consultant, said he thinks those behind such efforts have "more pressing issues."

Bruce Ransom, a Clemson University political science professor, said he believes the groups may not be sure which candidates to back and attack.

"Maybe they, too, are trying to sort things out," he said.

Danielle Vinson, a Furman University political science professor, said there might not seem enough of a difference between many of the GOP candidates to spur many local dark money ads. She said outside groups would not view Democrats as having much chance for success so they would focus on Republicans.

"I think that means they would be perfectly happy with any one of the bunch," she said. "So why spend your money? We don't have the kind of tea party thing versus the establishment here that you see nationally."

Center For Responsive Politics' OpenSecrets.org, which tracks campaign money, reported last summer that politically active nonprofits, its term for dark money groups, had spent $7.4 million by then, compared to just $2 million by that time in 2014.

Combining that spending with that of Super PACs funded by dark money, OpenSecrets reported that dark money at that point totaled $8.5 million for the 2018 midterm congressional races.

"This continues the trend of large, early expenditures funded by secret donors," the organization's report states.

Timmons said he doesn't think attack ads funded by secret money are fair. If he publicly criticizes a candidate in an ad, Timmons said, he must disclose in the ad that it was paid for by himself or his campaign, unlike members of dark money groups who can hide their identities.

"I think people should know what campaign or who is pushing something," he said.