GOP midterm losses might have been even worse without hundreds of millions in dark money

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Outside groups — often funded by undisclosed sources — supporting Republican House and Senate candidates significantly outspent groups supporting Democrats in close races.

Contrary to Republican leaders' promises of a massive "red wave" in the November 2022 midterms, the party only gained a handful of seats in the House of Representatives and lost a Senate seat and two governorships. But a new analysis by End Citizens United, a group that works to elect Democrats who will reform the campaign finance and electoral systems, determined that without a massive influx of outside spending fueled by dark money, Republicans could have lost even more races.

The group determined that pro-GOP super PACs spent $810 million in the 2022 elections, which is nearly double the amount that pro-Democratic ones did, which was $421 million. About 75% of that outside spending was opaque, meaning it was received without full disclosure of where the money came from.

"This election showed that the corrupting influence of dark money is still growing and allowing wealthy corporations and billionaires to stack the deck in their favor, while the rest of us pay the price," Arik Wolk, a spokesperson for End Citizens United told the American Independent Foundation. "Extremist Republican candidates ran weak, shell campaigns because they knew they were able to rely on millions in dark money, making their races competitive."

By passing the Bipartisan Campaign Reform Act of 2002, commonly known as McCain-Feingold, Congress previously sought to limit the influence of wealthy donors on America’s elections. But the Supreme Court, with a Republican-appointed majority, ruled 5-4 in the 2010 Citizens United v. Federal Election Commission case that political groups could spend as much money as they wanted to support political candidates and ballot referenda, as long as they did so without directly coordinating with political candidates and their campaigns.

Writing for the majority, Justice Anthony Kennedy argued that as long as voters can take into account who pays for the ads, unlimited spending will not cause corruption. "Disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way," he claimed. "This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages."

Thanks to a loophole in federal law, however, many of these outside groups do not have to disclose which individuals or corporations are bankrolling their ad campaigns. This allows tax-exempt 501(c)(4) organizations, like American Action Network and Americans for Prosperity, to spend millions on political ads without ever publicly disclosing where the money comes from.

The largest outside spender in the 2022 elections was the Senate Leadership Fund, a super PAC linked to Senate Minority Leader Mitch McConnell. Though the group is legally "independent," the Kentucky Republican has acknowledged he is involved with its efforts. While the fund is legally required to disclose the large donors behind its $245 million in expenditures, its largest donor was itself a dark money group called One Nation, which did not disclose its donors, making it impossible to know the true source of those funds.

In September, Republicans successfully filibustered the Democracy Is Strengthened by Casting Light On Spending in Elections (DISCLOSE) Act, which would have closed that loophole and required transparency for dark money groups who run political ads.

End Citizens United noted in its analysis that in many close races, Democratic candidates raised more money than their Republican opponents, but lost after outside groups poured millions of dollars into the ads to defeat them.

It cited the Senate Leadership Fund’s $38 million investment and $32 million from other pro-GOP groups into the Senate race in North Carolina, which fueled Sen.-elect Ted Budd’s (R-NC) victory over Democratic former state Supreme Court Chief Justice Cheri Beasley by about 3.2%. Together, they gave Budd a $47 million spending advantage in the race.

The story was similar in the Wisconsin Senate race, where incumbent Republican Sen. Ron Johnson defeated Democratic Lt. Gov. Mandela Barnes by just 1% — after the Senate Leadership Fund spent $26 million and other GOP groups invested another $50 million. Pro-Johnson spending ultimately exceeded pro-Barnes expenditures by $26 million.

Massive outside spending for Republicans in other contested races helped bring narrow wins for Arizona Rep.-elect Juan Ciscomani, California Rep. Michelle Steel, Iowa Rep.-elect Zach Hunn, New Jersey Rep.-elect Tom Kean Jr., New York Rep.-elect Michael Lawler, and Oregon Rep.-elect Lori Chavez-DeRemer. Each Republican won by less than 5% and received at least a $3 million outside spending advantage, an American Independent Foundation analysis found.

Many wealthy GOP donors contribute to dark money groups precisely because they fear voters will hold those donations against the recipients. In 2012, the late Republican casino billionaire megadonor Sheldon Adelson told the Las Vegas Sun that he planned to do the bulk of his future giving secretly through 501(c)(4) committees because it "is not helpful to the person" he funds when the media describes his donations as coming from a "casino mogul."

Former casino mogul Steve Wynn asked how best to fund Republicans through dark-money groups in a Republican National Committee conference call obtained by Politico in August. He observed that many GOP donors "are self-conscious for reasons that are personal to them, business people and folks like that," and they did not want their spending made public.

Last month, after his cryptocurrency business collapsed, Republicans called on Democrats to divest the donations they received from FTX founder Sam Bankman-Fried. As they did so, Bankman-Fried claimed that he had given "about the same amount" to Republicans.

"All my Republican donations were dark," he said in an interview with crypto citizen journalist Tiffany Fong, adding that he did so to avoid scrutiny by the "liberal" media.

"The huge amounts of dark money spent this cycle allowed for more extremist candidates, and will continue to do so in future elections," Wolk said. "That’s why we need to pass the DISCLOSE Act to end dark money and fix our broken system."

Published with permission of The American Independent Foundation.