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For years, dark money groups have enjoyed certain advantages that offer donors anonymity—putting the proverbial “dark” in “dark money.”
But late last month, one small outside group quietly told election law regulators to shove off when watchdogs demanded to see the group’s donors, a move that legal experts say could signal a profound shift in campaign finance disclosure laws, making dark money even darker just in time for the 2024 election.
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The group, a left-leaning climate change advocacy organization called “Protect Our Winters Action Fund,” was standing its ground after a notice from the Federal Election Commission flagged the group’s failure to disclose contributors, as the law requires.
In response, POWAF—a 501(c)(4) nonprofit—simply declined to disclose its donors. And as a justification, the group cited a policy statement from the FEC’s three Republican commissioners released in June 2022, signaling they would not enforce “dark money” disclosure rules as courts had previously decided.
That policy statement does not carry the force of law. And legal experts told The Daily Beast that the commissioners’ memo—written in response to two federal court rulings that had interpreted the law the opposite way—undercuts judicial decisions favoring transparency.
Instead, these experts said, GOP commissioners are apparently signaling they will unilaterally refuse to enforce the law as courts have defined it. With all FEC enforcement decisions requiring support from four of the six commissioners, this three-commissioner Republican contingent could block any action.
While the mechanisms involved may seem highly technical and obscure, the potential consequences are broad and easy to understand.
In short, transparency advocates say, if outside groups like POWAF take advantage of the GOP commissioners’ posture, those groups could continue to keep their donors secret—even though the courts have ruled otherwise—without risking penalties. The upshot, experts worry, could be a murky operational environment for some of the most powerful and well-funded outside spending groups in the country, during an election cycle that is, once again, shaping up to be the most critical in recent history.
Brendan Fischer, a campaign finance lawyer and deputy executive director of the watchdog group Documented, said that half of the commissioners are undercutting the rulings of two federal courts, allowing dark money groups to “continue hiding their donors.”
“A D.C. District Court and the D.C. Circuit have both held that nonprofits which spend money on independent expenditures must disclose their political contributors,” Fischer told The Daily Beast. “But just half of the FEC’s commissioners are aiming to protect dark money and render those decisions meaningless.”
What’s more, the crux of the GOP’s interpretation—that the federal courts hadn’t stipulated a replacement for the regulation they vacated, and that the agency they run has still failed to, in their view, provide “definitive guidance” for reporting and enforcement—raises the question of whether dark money groups are required to disclose any donations at all.
“It seems very unlikely that the FEC will enforce the law and demand that any politically-active dark money groups disclose their donors,” Fischer said. “According to that 2022 statement, the GOP Commissioners will continue narrowly interpreting disclosure requirements, and only open an investigation under an impossibly narrow set of circumstances.”
Brett Kappel, a campaign finance law specialist at Harmon Curran, said the Republican commissioners were sending a clear message with their statement.
“FEC Republicans—keeping dark money dark since January 2010,” Kappel added, a reference to the year that the conservative Supreme Court’s Citizens United decision opened the door for limitless and anonymous political spending.
While Fischer expressed concern about the potential precedent, he also pointed out that this particular group might have a plausible argument that it hadn’t received any reportable political contributions at the time.
Protect Our Winters Action Fund, which advocates for climate change action on behalf of winter sports athletes and outdoor enthusiasts, has never raised more than $666,656 in one year, tax filings show. (In 2014, climate change denier Donald Trump cut a $5,000 check to the group’s 501(c)(3) sister organization, Protect Our Winters, when a snowboarder solicited a donation upon being “fired” from Trump’s “Celebrity Apprentice” game show.)
“Protect Our Winters Action Fund appears to be a well-established nonprofit that spent just a fraction of its revenue on a small amount of independent expenditures,” Fischer noted. “Given the small amount of money at issue, I doubt any of the FEC's commissioners would vote to pursue an enforcement action in a case like this. But this group’s response hints at how lawyers will help dark money groups avoid disclosure in the 2024 cycle.”
Protect Our Winters didn’t return a comment request.
An FEC spokesperson told The Daily Beast that the press office did not have comment, but had forwarded questions to the commissioners.
In a statement, the three Republican commissioners—Chairman Sean Cooksey, Commissioner Allen Dickerson, and Commissioner Trey Trainor—reiterated that they would enforce the law in line with “the applicable statutes” and “relevant” court rulings.
“Any claim that Commissioners have signaled they will not enforce disclosure laws is patently false,” the statement said. “As our 2022 policy statement says, ‘we intend to pursue enforcement in appropriate cases’ under the applicable statutes requiring donor disclosure, consistent with relevant judicial decisions.”
Democratic Vice Chair Ellen Weintraub declined comment.
The issue at hand stems from a 2018 court victory that watchdog group Citizens for Responsibility and Ethics in Washington won against the FEC and conservative dark money group Crossroads GPS. CREW’s lawsuit claimed the nonprofit had failed to disclose its donors as required, and that the FEC’s longstanding guidance on the issue was at odds with the law. When the D.C. District court ruled in favor of CREW, the FEC issued new guidance. Crossroads GPS, however, appealed, but the D.C. Circuit upheld the decision.
In brief, the dispute concerned whether 501(c)(4) nonprofits, which already receive donor disclosure exemptions under tax law, should similarly enjoy those exemptions for their political activity. These organizations are not political committees and may not engage primarily in politics, but they can anonymously raise money without limits and use it to exercise an outsized influence on elections. The largest groups—like the conservative One Nation, aligned with Senate Minority Leader Mitch McConnell, or its liberal counterpart, Majority Forward, aligned with Majority Leader Chuck Schumer—funnel hundreds of millions of dollars into elections and can spend tens of millions on ads alone.
The question before the courts concerned the breadth of those disclosure exemptions: whether they should apply to political spending broadly, or only narrowly to contributions earmarked for specific “independent expenditures”—funds that independent groups like super PACs and 501(c)(4) nonprofits spend for or against a specific candidate, usually in the form of TV and radio ads, text messages, direct mail, and the like.
The narrow interpretation, under the old FEC guidance, did not apply to money earmarked for independent expenditures generally, but to specific individual ads. And groups like Crossroads GPS had exploited that loophole to offer donors ways to bypass disclosure.
Both courts, however, sided with the broad interpretation. The judges found that nonprofit groups that participate in elections must disclose donors who give more than $200 in a year “earmarked for political purposes”—not just earmarked for “independent expenditures” specifically.
Transparency advocates applauded the ruling, which revised and significantly expanded disclosure requirements for deep-pocketed but opaque “dark money” groups.
The Republican commissioners, however, diverged from the ruling in their 2022 statement, arguing that the courts had left too much to interpretation, rendering the new requirements “effectively unenforceable.” They also blamed their own agency, complaining that the FEC has not issued “clear guidance” about reporting protocols or provided a “definitive standard” by which to apply the new law.
“Until the Commission provides definitive guidance in the form of a rulemaking, alleged violations of § 30104(c)(1)’s contribution reporting requirements are effectively unenforceable due to the absence of clear direction from the Commission on which donations to non-committee organizations are ‘earmarked for political purposes’ and therefore reportable as ‘contributions,’” the statement said. “In hopeful anticipation of such a rulemaking, however, we are providing this interpretive statement on the appropriate application of CREW.”
Fischer characterized the statement as an invitation for more dark money spending.
“The interpretive statement from half of the FEC’s Commissioners functions as a roadmap for how politically-active dark money groups can continue hiding their big money backers,” he said.
Stuart McPhail, senior litigation counsel for CREW, said the Republican commissioners are heralding “a return to darkness.”
“So what we have now is this nonprofit saying it’s simply following that guidance and not disclosing contributions,” McPhail told The Daily Beast. “But the fact that they’re citing this wrong memo is a bad sign.”
McPhail explained that, under the GOP’s interpretation, a donor could give money to a “dark money” group without a stated purpose, and the group could put those funds towards ads without disclosing the donation.
“But there’s a common sense understanding that contributors would know that’s what the group is doing with their money,” he said.
Fischer said the interpretation could make it “just about impossible” to prove a violation.
“The statement asserts that the FEC will enforce disclosure requirements, but under this strict interpretation of the law, the evidentiary bar needed to trigger an investigation is just about impossible to meet,” he said. “You’d need a recording from a fundraising event where a dark money group is explicitly asking for donations to specifically fund independent expenditures, or an email where a donor writes ‘this check is for express advocacy communications.’ Even in the unlikely scenario that a secret recording or private email somehow became public, these groups and donors are generally sophisticated enough that they’ll use careful language to avoid crossing any lines.”
McPhail torched the Republican commissioners, blasting the memo as a “wholly undemocratic” statement that “makes the law for themselves” and “borders on contempt of the court.”
“This limits the ability of voters to have insight into who is spending to buy favors,” he noted, observing that the interpretation “helps protect donors from bad press” and “allows corporations to further avoid public scrutiny and accountability.”
“It breaks the promise of Citizens United—that there will be disclosure, while in reality there’s less and less, even when the courts themselves are requiring more,” McPhail said.
He also said CREW would have grounds to file a new lawsuit.
“There’s a strong argument for abdication of duty here. A police officer can’t say, ‘I’m going to stop enforcing the speed limit,’ but reading between the lines of this policy statement, that is their view,” he said.
