A federal judge in Washington issued a ruling Friday rejecting a regulation that has allowed large donors of politically active nonprofits to remain anonymous.

The ruling will create a path for new requirements that would require nonprofits to disclose donors who give more than $200 toward impacting federal elections. The IRS allows nonprofits and social welfare organizations to spend money on elections so long as it’s not their “primary purpose.” Since they are not required to make their donors public, such politically active nonprofits are often referred to as “dark money” groups.

U.S. District Court Judge Beryl Howell found that a Federal Election Commission (FEC) regulation used by nonprofit organizations that engage in political activity to shroud donors in secrecy was invalid. The judge said the rule failed to uphold the standard which Congress intended when it required the disclosure of politically related spending.

“The challenged regulation facilitates such financial ‘routing,’ blatantly undercuts the congressional goal of fully disclosing the sources of money flowing into federal political campaigns, and thereby suppresses the benefits intended to accrue from disclosure … ,” Howell, an Obama appointee, wrote in her decision. The ruling is expected to be appealed by the FEC and Crossroads Grassroots Policy Strategies, the defendants in the case.

The ruling only applies to what the FEC terms “independent expenditures” — that is, communications that explicitly call on voters to support or oppose certain candidates. While independent expenditures make up a significant portion of “dark money” spent in elections — more than $733 million since 2010, when the Supreme Court’s Citizens United decision came down — it is not the only way dark money gets into elections. These groups spend heavily on stealthy political ads framed as “issue ads,” and this decision will not affect their ability to buy such ads in the future.

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Citizens for Responsibility and Ethics in Washington (CREW), a watchdog group in Washington brought the lawsuit against Karl Rove’s Crossroads GPS after GPS did not disclose the donors who contributed to the $6 million the group spent trying to defeat incumbent Sen. Sherrod Brown (D-Ohio) in 2012. CREW first lodged a complaint with the FEC, which dismissed it, before filing suit.

“This ruling looks like a major game changer,” Noah Bookbinder, CREW’s executive director, said in a statement. “Based on this ruling, the public should know a whole lot more about who is giving money for the purpose of influencing an election, and it will be much harder for donors to anonymously contribute to groups that advertise in elections.”

Barring an appeal, the FEC has 30 days to reconsider its original decision to dismiss the complaint against Crossroads GPS and 45 days to issue interim regulations that comport with Howell’s findings.

Researcher Robert Maguire contributed to this story.



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