Dark Money Loophole: Who Really Influences Elections?

dark money loophole explained by StopAd

Plainly, if we want our politics to be transparent, we should achieve transparency in election spending first. As our recent president elections have showed, the system is broken.

Under the regulations that are in place today, anyone with deep pockets can influence the results of elections by sponsoring political campaigns with money of questionable origin, and do so anonymously.

Here’s the inconvenient truth. It makes no sense to talk about the end of corruption as long as there is a loophole in the law allowing politicians to bypass disclosure rules when raising money.

They call it the “dark money loophole,” and by “dark” they usually mean “dirty.”

What Is the Dark Money Loophole?

Simply put, the dark money loophole is a legal loophole that allows money untraceable to any person or interest to pour into political races and influence the results in a way that benefits essentially anonymous “sponsors.”

If you need a real-life example to see how destructive the outcomes can be, think back to the most recent presidential elections. Now we know there were at least 470 fake accounts on Facebook, which produced around 3,000 political ads that helped Trump win the election 2016. What we also know now is that those ads were sponsored by Russia.

Here’s how it happened.

There were some figures in Russia interested in a very particular result for the 2016 US presidential elections. They hired a St. Petersburg-based “troll farm” to influence American voters. These professional “trolls” produced around 3,000 political ads of a manipulative nature to target Americans on sensitive issues like gun rights, illegal immigration, and other topics that normally affect how people cast ballots. Since political ads distributed across social media do not fall under strict disclosure rules like political ads on TV do, it was fairly easy for Russia to do what it did.

Without this dark money loophole in internet ads, without proper disclosure rules in place, this would never happen. And the situation raises a number of questions. Would these ads have ever made it to Facebook newsfeeds and would so many people have fallen for them if they knew who  had been the sponsor? Would the results of elections be the same? Who knows, maybe we’d have someone else running the country today.

It’s worth mentioning that the presidential election is not the only political event where dark money plays its dirty role. A list of recent cases includes last year’s political races in Illinois, a recent attempt of Democrats to win back Congress to name just a few.

The Dark Money Loophole Explained

The problem first appeared in 2007, when the Supreme Court decided to loosen limits on political sponsorship by non-profit organizations.

Given that nonprofits are not obliged to reveal their financial details, they make a perfect vehicle for fat wallets who want to influence politics from the shadows. Wealthy interests donate to nonprofits, which then sponsor a particular candidate without the need to disclose the origins of money they donate. Nonprofits are used for raising huge checks for elections.

It’s only part of the story, though.

The dark money loophole got much bigger when political campaigns invaded the social media landscape. Apparently, there’s no appropriate legislation in place to control funding sources behind political campaign ads on the internet.

Consequently, a political message that would require full disclosure if run on TV does not require the same disclosure if run as an internet ad. This means there are virtually all the options in the world for wealthy interests (read: foreign political evils) and almost no chance for political transparency.

In the last few years, campaign advertising on the web skyrocketed from just 1% of total political spend in 2014 to more than 22% in 2018. Given what we know about the danger of unregulated political ads on the internet, it looks like the future of American politics is at risk. Unless someone closes the loophole for good.

Where Does Dark Money Come From?

The short answer is “from anywhere.” During the most recent presidential elections, dirty money was pouring into political races from Russia.

The source, however, can be any interested individual or group of individuals who wish to affect the outcome of an election. Nonprofits serve as a medium through which dark money enters the election game. As if the idea of untraceable money weren’t terrifying enough, there’s no limit to the amount of money that can be poured in.

Isn’t it insane that nonprofits are allowed to donate unlimited sums of money to political campaigns without the need to disclose the origins of money?

If left open, the dark money loophole will result in political chaos more generally and build-up of corruption more specifically.

The Dark Money Loophole Might Get Bigger . . . and Darker

If you follow the news, you have probably heard about President Trump’s attempts to end the Johnson Amendment–a half-century old law prohibiting churches from endorsing politicians in order to keep their tax exemptions.

Officially, Trump’s idea was to allow churches to take part in politics while also taking tax-deductible donations. In reality, that would mean yet another dark money loophole in the US campaign-finance system. This time, a loophole of Biblical proportions.

So far, none of Trump’s efforts to destroy the Johnson Amendment have resulted in success. If things change one day, however, the amount of money untraceable to any particular source, will start growing exponentially.

Meanwhile, more than 3 in 4 Americans say they want to know who’s paying for political ads on social media and nearly everyone–more than 90%–state that they want to reduce the influence of money in politics.

What do you think?


  • Hippie

    I’m sorry, I can’t stand to read this. Too many grammar and content mistakes. Are you a Russian troll?