“The Democratic Dilemma on Dark Money”

A deep dive on this issue from Rachel Cohen for the American Prospect:

Democrats passed the DISCLOSE Act through the House in June 2010, but fell one vote short of breaking a Republican filibuster in the Senate. Democrats were united in their outrage, and even President Obama condemned the GOP, unequivocally stating: “A vote to oppose these reforms is nothing less than a vote to allow corporate and special-interest takeovers of our elections.”…

But more quietly, leaders in the progressive fundraising world will admit that transparency is just not a serious priority anymore. With imminent threats to democracy, including Republicans clinging to false theories about a stolen 2020 election and the possibility that election officials will simply reject the will of the voters in the future, liberal donors say there are just higher-order matters to focus on. “They’re understandably scared shitless about Trump getting another term, and [they] act accordingly,” said Gara LaMarche, the former president of the Democracy Alliance, a network of progressive mega-donors….

A bevy of low-profile and well-heeled “venture philanthropy” funds, like the Sixteen Thirty Fund, New Venture Fund, and Tides Advocacy, have also distributed hundreds of millions of dollars to liberal organizations over the last few years. It wasn’t until a year after the 2018 midterms that a pair of journalists learned that the Sixteen Thirty Fund alone had contributed $141 million in dark money to left-leaning groups that cycle, including one (anonymous) $52 million donation. These funds identify as “fiscal sponsors” and boast of their ability to deploy collective resources strategically and quickly….

Beginning in 2017, tens of millions of dollars were poured into a generic-sounding social welfare group called Generation Now, which funded TV ads, mailers, and flyers in Ohio to pass a bill that would subsidize an energy company’s power plants. It was only after an FBI wiretap and federal indictment of state lawmakers for bribery and corruption that the public learned the ads had been funded by affiliates of the energy company itself. Or take Patients for Affordable Drugs, which sounds grassroots, but is really a highly controlled lobbying entity backed by millions from the Laura and John Arnold Foundation.

Elyssa Feder, co-founder of Rising Organizers, a community organizing training program, notes that power dynamics between organizational leaders and donors will always be skewed. “If people’s jobs are on the line and a major donor says my $50,000 check is predicated on you funding a new project—even if that new project isn’t the best use of your time and resources—it’s hard to say no to that when that donation would be able to pay someone’s salary,” she said.

These advocacy groups, and their donors in turn, exert real influence on the priorities of politicians, leading them too often in less populist directions. This isn’t new, and the Democratic Party in particular has been making itself more easily swayed by the whims of the wealthy ever since the early 1980s, when Rep. Tony Coelho took over the Democratic Congressional Campaign Committee and established new direct lines of communication between corporate donors and members of Congress. He billed himself as a pragmatist, one simply playing by the rules of the game, and he’d later go on to fight for legislative loopholes on behalf of the wealthy donors he cultivated. The Washington Post would call him “the most influential young congressman of his generation.” Prospect editor Bob Kuttner referred to him in The New Republic in 1985 as “the Democrats’ Dr. Faustus.”…

“This stuff is so opaque and no one is holding anyone accountable,” said one staffer whose employer works with the venture philanthropy funds. “The organizational landscape of civic and political organizations is just totally being transformed as inequality grows and rich people get uber rich and we are finding more creative ways to distribute their money.”

The staffer, who works in progressive movement building, says the landscape is becoming “extremely donor-centric” in a way that no longer even resembles the industrial-titan philanthropic milieu they once knew. “We’re entering this new era of capitalism dominated by finance, tech, and insurance. The money is different,” they said. “We’ve linked our fates here to new powers within capitalism, and [how] that money is moved, aggregated, pooled, and filters down is really different than even several years ago, and it scares me a little bit.”

AS PROGRESSIVE GROUPS GROW more dependent on rich donors who’d like to keep their contributions private, liberals find themselves contorting into awkward positions to justify the status quo, insisting groups that are clearly affiliated with the Democratic Party are not, in fact, partisan. Political nonprofits tend to insist they’re independent and simply “issue oriented”—a framing that’s practically dubious but legally necessary to keep their nonprofit status.

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