Summary:
- “Dark money” expenditures by outside groups for political advertising is increasing rapidly
- Republican candidates were the biggest beneficiaries of corporate dark money in 2022, but both parties rely on it
- Many business groups conceal their spending behind shell organizations
We have previously covered direct corporate PAC contributions to North Carolina’s legislative campaigns. But these direct contributions are, as noted in those pieces, hardly the whole story. A much larger (and seamier) side of North Carolina’s campaign finance is what’s known as “dark money.” Today, we turn to the dark side.
“Dark money” generally refers to outside spending aimed at influencing a political campaign, usually with political ads (like on TV or social media) and direct mail. Because the money is not given directly to a candidate themselves, but rather spent on their behalf, there are no spending limits. Legally, these “independent expenditures” (or as they’re often shortened, “IEs”) are prohibited from coordinating with the candidates and campaigns they’re trying to help; but that limitation is frequently evaded, or even ignored altogether.
Dark-money political spending has increased at a rapid pace ever since the Supreme Court’s Citizens United decision, which found that outside groups like corporations, labor unions and non-profits have a First Amendment right to spend uninhibited on elections. This is certainly true here in North Carolina, where “IEs,” led prominently by big business groups, spent lavishly in 2022 to elect their favored candidates.
Let’s dig in.
Top recipients of corporate IE spending
Four State Senate races and one State House race were the top recipients of corporate IE spending in this year’s midterm election. State Senators Lisa Barnes (SD-11), Michael Lee (SD-7) and State Senator-elect Bobby Hanig (SD-3), along with State Representative John Bradford (HD-98), each received about a quarter million or more in advertising and direct mail funded by corporate groups.
Note: readers can refer to this spreadsheet for the full spending detail. For sake of simplicity, we have limited this analysis to recipients of $25,000 of support and more, though there are many more recipients who received less. The spreadsheet contains the full list.
Who's behind the spending
While there are innumerable small IE groups, several prominent business lobbies make up the bulk of the spending.
For the purposes of making independent expenditures, many business groups do not route their spending through their primary organization. Instead, they often set up a separate organization, which exists wholly on paper, through which to make their expenditures. This is done to deliberately obscure who or what is behind the ads and mailers voters see.
- For example, the North Carolina Retail Merchants Association did relatively little political spending through its primary organization PAC this year - "only" $55,000 in mostly small contributions throughout the cycle. But the "Mainstreet Merchants for a Better NC," its IE vehicle, spent $350,000 on ads and mail.
- An even better example is the "North Carolina Property Rights Fund." This is the IE vehicle for the NC Realtors, who also happen to have one of the largest PACs in the state. The "Property Rights Fund" spent nearly $900,000 on ads and mail.
- Other examples include the "Alliance for Hospitality Jobs" (cover name for the Restaurant & Lodging Association), "Partners for Educational Freedom" (charter school lobbyists), "NC Citizens for Patient Safety" (the Society of Anesthesiologists) and "Keep Ag Growing" (the Farm Bureau).
Other organizations don't bother with the shell games, and do their IE spending through their primary organization. This is the case for the NC Chamber of Commerce and the Home Builders Association, both of which are also heavy spenders.
See all the data
The large majority of these groups' spending went to support Republican candidates (as demonstrated in the first graph), though not all.
What about non-corporate groups?
While corporate groups dominate much of the IE spending landscape, they're certainly not alone. Ideological and issue-oriented groups also spend heavily - and there are many of them. Most are relatively small, spending in the low five-figures or less. But the most prominent groups spend significantly more.
Among the leading non-corporate IE groups are Planned Parenthood and the League of Conservation Voters, both of whom give overwhelmingly or exclusively to Democrats, and Americans for Prosperity, the Koch Industries-aligned group which does the same for Republicans.
In this year's elections...
- The League of Conservation Voters spent approximately $616,000 supporting Democratic candidates and opposing Republican ones. Only about two-thirds of that total was directed to legislative candidates, however - $200,000 was directed to the state supreme court races
- Planned Parenthood spent approximately $390,000 across five State Senate races, opposing Republican candidates
- Americans for Prosperity, a group aligned with the Koch family, spent $360,000 supporting Republican candidates.
While Democrats do receive some support from IE groups, it's fair to say that the heaviest spenders are strongly Republican.
In sum, dark money will continue to play a major role in elections at the national, state and even local levels. There is very little that elected officials can do to counteract it, given the constraints stemming from the Citizens United decision. But better understanding the forces at play always helps. You never know who might be paying for that vicious attack mailer in your inbox.
