Dark money tactics used in West Virginia's primary could spread as midterm season heats up

A pair of mysterious pop-up super PACs, one with Republican roots and another tied to Democrats, spent more than $3 m...

Posted: May 28, 2018 7:46 PM
Updated: May 28, 2018 7:46 PM

A pair of mysterious pop-up super PACs, one with Republican roots and another tied to Democrats, spent more than $3 million in hopes of swaying West Virginia's GOP Senate primary while keeping their donor lists hidden from voters until after the election.

The groups arrived on the scene with blurry names, like "Mountain Families PAC," but blunt intentions: to quietly use truckloads of outside money to feather their political beds ahead of the November general election. By the time their donors were revealed a few days ago, the primary felt like a distant memory.

To do this, the PACs used legal tactics that were nonetheless designed to defy the spirit of current campaign finance law, campaign finance experts say.

The play, which experts warn could set a roadmap for other groups seeking to avoid politically damaging disclosures, is actually pretty simple. Both the Mountain Families PAC and the "Duty & Country PAC" switched their FEC reporting schedules in the run-up to the vote, allowing them to delay making public the sources of their millions until after the primary, rendering the new information useless to voters who had cast their ballot nearly two weeks earlier.

"With these kind of campaign finance shenanigans, once the dam breaks, you can expect to see a flood of similar conduct," said Brendan Fischer of the nonpartisan, nonprofit Campaign Legal Center. "Once one political operative figures out how to get around the law, you see others following suit."

The onslaught

In West Virginia, Mountain Families PAC began airing ads targeting the former coal baron Don Blankenship with less than a month to go before the May 8 primary. One of the spots, titled "Sludge," hammered Blankenship over his conviction for conspiring to violate mine safety standards in connection with the deadly Big Branch mine explosion in 2010.

"Who will clean up Washington? Not convicted criminal Don Blankenship," a narrator intones, ticking through Blankenship's ugly record. "Isn't there enough toxic sludge in Washington?"

The group dropped more than $1.3 million on the contest in total, all of it aimed at Blankenship, who was running a slash-and-burn campaign targeting the establishment and using racist language aimed at Senate Majority Leader Mitch McConnell's family in his race against state Rep. Evan Jenkins and the eventual winner, state Attorney General Patrick Morrisey.

For voters intent on finding out where that money had originated, there were precious few clues. Only an Arlington, Virginia, mailing address, and the listing of a veteran GOP operative as the group's treasurer suggested links to the same national Republicans Blankenship was targeting. More concrete information about its origins, direction and, crucially, the funding, remained hidden.

How they did it

The process began on March 29, when the group formed and, according to FEC documents, elected to file quarterly reports. The first would be due just a couple days later, on March 31. With no donations in that short stretch, Mountain Families PAC had nothing to disclose. But there was another hurdle. Quarterly filers also have to submit a pre-primary report, making public fundraising and spending information 12 days before the vote.

But just after the quarterly reporting period ended on March 31, Mountain Families PAC in a bid to sidestep that requirement made a timely switch to monthly reporting. By law, this exempted them from filing a pre-primary report and pushed their next disclosure, their first monthly report, back to May 20, nearly two weeks after Morrisey had claimed the nomination and Blankenship, who had been showing signs of momentum, finished a distant third.

The Duty & Country PAC, which was also set up to avoid disclosing its donors until after the election, revealed the sources of its $1.8 million in ads targeting Jenkins and Morrisey -- both perceived as more formidable general election challengers to Democratic incumbent Sen. Joe Manchin -- at the same time.

Only then was it revealed that the Mountain Families PAC, which had spent so heavily to derail Blankenship, has been funded entirely by the Senate Leadership Fund, a DC-based super PAC with links to Mitch McConnell and Senate Republican leadership. SLF itself is funded largely by Republican megadonors like Bernard Marcus, the Home Depot co-founder, and Paul Singer, the hedge fund manager, and also corporate donors such as Chevron and Nextera.

Among the sources hidden until then were a roster of donors including CEOs and hedge fund managers based in New York and Massachusetts, Chicago Bulls and White Sox owner Jerry Reinsdorf, the Greater New York Hospital Association, along with transfers from the Democratic fundraising giant ActBlue.

The FEC is paralyzed as election season heats up

Adam Bozzi, the communications director for End Citizens United, a nonprofit aimed at electing candidates dedicated to opposing to the 2010 court rulings that paved the way for super PACs and other dark money groups and pushing new, stricter campaign finance legislation, described the situation in West Virginia as "a symptom of the broken campaign finance system" that in which both parties operate.

"There is a rush of unlimited money coming in, undisclosed money coming in, and a bunch of gaping holes that allow a lack of disclosure," Bozzi said. "What we're seeing is overall an increase in people and groups navigating the system in a way that they can hide money."

The West Virginia tactics are reminiscent of a gambit pulled by Democrats in last year's Alabama special Senate election. In that race, a Democratic super PAC called Highway 31 was able to avoid revealing its donors until after the results were in by claiming to have done all their spending on credit. They disclosed their donations -- ostensibly made to pay off that debt -- after the election.

"They claimed up until the final report before Election Day that they hadn't raised a single dollar," the CLC's Fischer, calling it "a creative legal argument."

How that artistry would stand up under to the scrutiny of the FEC remains an open question, mostly because the commission, which is supposed to interpret and enforce election law, is in its current form often effectively absent from the scene.

"On any controversial campaign finance issue, the FEC repeatedly deadlocks," said the CLC's Fischer. "It splits 3 to 3, or now that it's down to four commissioners, it splits 2 to 2, which means that they don't take action. They don't take action to craft new rules in light of a changing legal landscape and new court decisions and they don't take action to enforce those rules against candidates and super PACs that violate them."

Bozzi, from ECU, believes the only solution is stricter legislation as part of a package of wholesale reform. He cited the Restoring Integrity to America's Elections Act, which would revamp the FEC and enable it to better monitor and regulate existing campaign finance laws, as one possible fix. Another, called the Federal Election Administration Act, would eliminate the FEC and replace it with an agency that has broader authority to monitor and regulate existing law.

The outlook for any real reform, though, is bleak.

"Right now, Congress is not only not worrying about (these) problems, but looking for ways to allow less disclosure," he said.

In the meantime, experts are expecting more of the same as the midterm season ramps up and government watchdogs, voters and reporters tracking money in politics are stretched increasingly thin. If not for the intense focus on those races, Fischer said, the public might have never known whose cash was paying for the ads.

"It's going to be a challenge, especially with these staggered primaries over the next few months," he said," to stay on top of all it -- hard for voters, the public, the press to ensure that voters have the full information, to which they are legally entitled."

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