The ugly saga of alleged corruption, bribery, money laundering and racketeering on the part of Ohio House Speaker Larry Householder and four political operatives in Ohio lays bare a nasty truth in the Buckeye State: Unaccountable dark money has corrupted our politics, so now we must demand the legislature act to require disclosure.
The mechanism by which dark money 501(c)(4) groups operate – such as the reportedly Larry Householder-run Generation Now – came about in 2010, when the U.S. Supreme Court issued its decision in Citizens United v. Federal Election Commission. This decision essentially overturned the bipartisan McCain-Feingold campaign finance law.
In explaining their controversial decision to allow unlimited corporate political expenditures, a majority of justices stressed that disclosure of the sources of the money was key. They wrote that such “transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
But when dark money groups such as Rep. Householder’s engage mostly or exclusively in political activity, that principle is thwarted. Also, corporate political expenditures aren’t supposed to be coordinated with political campaigns – something that happened repeatedly in the HB 6 scheme, the complaint against Householder alleges.
The U.S. Supreme Court’s Citizens United decision opened the door for 501(c)(4) groups to operate as “social welfare” organizations, but multiple failures since have allowed them to thrive while flouting the rule that their funding should be transparent and political activity limited.
The first is on the heads of the Ohio legislature, which has failed to enact legislation demanding disclosure from these organizations as several other states have done. The second is a failure of the IRS, which has all but given up holding these dark money groups accountable.
ProPublica reported in April 2019 that over the past decade, people, companies and unions have dispensed more than $1 billion in dark money, according to the Center for Responsive Politics.
Furthermore, federally, on July 16, 2018, the U.S. Department of the Treasury and the Internal Revenue Service announced that tax-exempt nonprofit groups described under section 501(c) of the nation’s tax code would no longer be required to disclose the names and addresses of their donors on tax documents.
The policy change did not apply to reporting requirements for 501(c)(3) groups, which remained unchanged. But groups covered by the policy change included 501(c)(4) organizations, such as Americans for Prosperity, Organizing for Action, the National Rifle Association, and Planned Parenthood.
Gov. Mike DeWine weakly declares he’s “not a Constitutional scholar” and hems and haws about what could be done constitutionally to address the issue of disclosure. The fact is that a Republican-led U.S. Congress shoved a bunch of provisions into a critical spending package to protect corporations and special interests from disclosing how much money they’re spending to buy influence and power in American elections.
This all also underscores how hollow Gov. DeWine’s talk about his interest in “transparency” rings. Either you’re going to fight dark money, or you’re not, and Gov. DeWine seems wholly disinclined. This only makes the fact that before he became DeWine’s legislative director, Dan McCarthy was a lobbyist for FirstEnergy, that much more disconcerting.
We don’t need weak-kneed defenses of special interests and corporate dark money while regurgitating political platitudes about valuing transparency. We need a willingness to lead the fight for disclosure. Pretty talk won’t do the trick; only action can. If DeWine truly believes in transparency; if the Ohio General Assembly truly wants to atone for this egregious sin against the public trust, let the sunshine in.
Mr. DeWitt is with the Ohio Capital Journal.