Investigation By Michigan Campaign Finance Network sheds light on legal loophole that allows unreported donors to flood elections with ‘dark money’
No one, except for maybe a few stealth political operatives, knows who put up the nearly $14 million that was spent on TV ads to influence the 2012 Michigan Supreme Court election.
According to the Michigan Campaign Finance Network’s (MCFN) 2012 “Citizen’s Guide to Michigan Campaign Finance”:
“[C]andidate-focused issue advertising that was not reported to the Bureau of Elections … totaled $13.85 million [during the “2012 Supreme Court campaign”].”
Entitled “Descending into Dark Money,” the MCFN’s investigation was able to identify the “middlemen” in these TV ad transactions, i.e., the groups that handed over the money to the TV stations to get the ads aired, and the monies they paid:
- Michigan Republican Party, $6.7 million
- Michigan Democratic State Central Committee, $6.2 million
- Judicial Crisis Network (Conservative policy group), $1 million
But, as for the donors from whom those groups got the money, their identity is – and will continue to be - unknown.
Under a nonsensical legal loophole, donors can shield their identities from disclosure, despite giving small fortunes to influence an election’s outcome, if their money is used for advertising that is deemed to addresses only election-related “issues” as opposing to advertising that expressly advocates for the election or defeat of a particular candidate.
Noting that the 2012 Michigan Supreme Court election was the “least transparent in history,” the MCFN criticized Michigan’s current “regulations” on campaign financing:
“Undisclosed spending in Supreme Court campaigns thwarts the voter’s right to know who is supporting the candidates … It compromises trust and confidence in the impartiality of the judiciary.”
Accordingly, the following proposed change to Michigan’s campaign finance law tops MCFN’s list (on its website, www.mcfn.org) of the “Fundamental reforms for transparency in Michigan politics”:
“The donors to political committees and nonprofit corporations that pay for candidate-focused ‘issue’ advertisements should be disclosed in time for voters to consider campaign advertisements in light of their sponsors.”
In every sense of the word, the MCFN, its “Dark Money” investigation and its call for reform are right on the money.
Michigan’s Campaign Finance Law
Under Michigan’s Campaign Finance Act (MCFA), any “expenditures” of “money or anything of ascertainable monetary value” – as well as the “contributions” that fund “expenditures” – that are made “for purposes of influencing the nomination or election of a candidate” must be reported to the Secretary of State’s Bureau of Elections. (See MCL 169.204(1); 169.206(1))
The Bureau of Elections collects the data, which includes the names, addresses, phone numbers and occupations of the person’s who provide money “for purposes of influencing” a candidate’s election, and posts it to a searchable database which is available to the public.
Loophole protects ‘secret’ donors
The loophole in the MCFA which protects “secret” donors from being “outted” depends on the purpose of the advertising that the donors’ money is being used to fund and whether the ad passes the “express advocacy” test.
For example, if, in speaking about a particular candidate, an ad uses “magic words” such as “vote for,” “vote against,” “elect” or “defeat,” then the ad is deemed to be “express advocacy.”
As such, the ad’s purpose is to “influenc[e] the … election of a candidate,” which means the MCFA applies and the identities of the persons who put up the money for the ad must be reported to the Bureau of Elections.
On the other hand, if the magic, “express advocacy” words are missing from the advertisement, then the ad will be deemed to be merely “issue advocacy.” In that situation, the MCFA’s reporting requirements would not apply and the identities of the ad’s benefactors would remain secret.
Dangers of the Michigan Campaign Finance Act loophole
As a result of its “Dark Money” investigation, the MCFN aptly observed that the undisclosed spending in Supreme Court elections greatly hinders litigants’ ability to root out and confront judicial conflicts of interest:
“If a person or interest group spends a very large amount to help elect a judge, and the judge who benefited from that support hears a case involving his or her supporter, the supporter’s opponent in litigation is justified in asking the judge to stand aside from the case. But if the support was undisclosed and can’t be found in the public record, the party whose right to an impartial court hearing has been compromised can’t know when such a recusal motion is warranted.”
Significantly, in a 2004 ruling, the Secretary of State’s Bureau of Elections said the following about the so-called “issue” ads that the MCFA loophole permitted:
“This in no way endorses some of the so-called issue ads, which are often more vicious than MCFA-regulated ads. Clearly, many if not most of these issue ads are campaign ads without words of express advocacy. Moreover, because they are not considered expenditures, relevant information, such as who paid for them, is often not disclosed.”
We must change how we elect our judges
I’ve spoken out on this important issue repeatedly. It doesn’t matter if the dark money is coming from Democrats or Republicans. It’s toxic. The record amounts of money pouring into judicial elections in this state is undermining the appearance of impartiality of our judiciary. It is undermining the respect that lawyers and trial judges have for the judges and justices on the Michigan Court of Appeals and Supreme Court.
The dark money pouring into these races is adding kerosene to the fire.