Texas is Shining the Light on the Dark Money in State Politics
November 20, 2014
By Vanessa Rogala
The Lone Star State has decided to shine some of its Texas sun on the dark money used in elections. “Dark money” is a phrase commonly used to describe donations made by undisclosed donors. For the last several years, dark money been a growing concern in federal and state elections. According to the Center for Responsive Politics, spending by political organizations that do not disclose their donors increased from approximately $5.2 million in 2006 to over $300 million in the 2012 election. Some credit this rapid increase in dark money to the United States Supreme Court’s decision in Citizens United v. Federal Election Commission, which held that the federal government could not limit organizations from spending money to influence the outcome of elections. And, in an 8 to 1 decision, the Supreme Court also held that Congress can compel disclosure of that money spent on influencing elections, stating, “prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.” The Supreme Court’s push for disclosure, however, launched the creation of super PACs and the growing use of disclosure loopholes. Given how quickly dark money has become an influential factor in elections, many states, including Texas, are attempting to address dark money within their borders.
On October 29, 2014, the Texas Ethics Commission voted unanimously to adopt a new rule that requires political committees to disclose their dark money contributions. Title 15 Section 251.001 of the Texas Election Code defines a group as a “political committee” if that group of persons “has a principal purpose accepting political contributions or making political expenditures.” According to the new rule, a group has the principal purpose of accepting political contributions “if the proportion of the political contributions to the total contributions to the group is more than 25 percent within a calendar year.” Whether the donor intends to make a political contribution is determined by the donor’s reasonable expectation as to how the contribution will be used, and the group’s public statements, goals, filings, and activities. Further, a group has a principal purpose of making political expenditures if that group spends more than 25 percent of its budget on political activity during that calendar year.
According to Texas Ethics Commissioner Chase Untermeyer, the new rule “turns” on the phrase “political purpose.” It is the commission’s job to determine how many “principal purposes” a group could have. Commissioner Untermeyer states that “[b]y setting the floor at more than 25 percent of spending, we in effect said that a group may have three principal purposes, and that if politics is one of those, the group must register and report as a political committee.” Critics of the new rule maintain that there could be only one “principal purpose” of anything and that, by saying a political committee could have multiple “principle purposes,” the commission is violating the committee’s free speech. However, the Commissioner thinks this reasoning requires “a major leap of logic and not a little demagoguery.”
Controversial semantics aside, this is not even the first time that Texas has tried to flip the switch on the dark money in Texas politics. The new rule is similar to a bill that Former Texas Governor Rick Perry vetoed in May 2013.The Republican Senator from Amarillo, Texas, Kel Seliger, authored the dark money legislation–Senate Bill 346. Like the Texas Ethics Commission’s new rule, the bill would have required political organizations, such as non-profit organizations that fell under 501(c)(4) of the tax code, to disclose their donors. However, the bill also contained a very controversial provision that exempted labor unions from the reporting requirements. Governor Perry vetoed the bill stating that the bill would have a chilling effect on donors’ constitutional rights.
Considering how quickly Senate Bill 346 was put to rest, it looks like the Texas Ethics Commission’s new “dark money” rule will have an uphill battle ahead. Indeed, within only a few days of the Commission’s unanimous decision, the Lake Travis Citizens Council filed a federal lawsuit claiming the rule was “not narrowly tailored to serving a compelling state interest.” It will be interesting to see whether this new rule will succeed this time around or find itself hiding in the dark with Senate Bill 346 and all those undisclosed contributions.
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