New York City’s campaign finance laws don’t allow corporations to give money directly to people running for city office, but that hasn’t been a hurdle for some companies trying to influence public policy.
They have poured cash into two nonprofit groups affiliated with the city’s Democratic mayor, Bill de Blasio, which have used the money to produce glossy advertisements promoting his agenda, produced by the same political consultants who worked on his election campaign.
Similar nonprofits are proliferating across the country, many of which are backed by “dark money” given by undisclosed donors. Those supporting de Blasio do eventually disclose their donors, but good government groups — one of which last week called for New York City officials to investigate the arrangement — still worry that such organizations contribute to a culture of influence peddling and evade the intent of laws seeking to limit the influence of special interests on elections
Dark money has been a major factor in federal elections for years, but more and more mayors and governors are turning to them to help promote their agendas and, in some cases, navigate crises.
In recent months, mayors such as Eric Garcetti in Los Angeles and Mike Duggan in Detroit, as well as governors such as New Jersey’s Chris Christie and Alabama’s Robert Bentley, have had their agendas bolstered by nonprofits they helped create.
Michigan Governor Rick Snyder last month tapped his nonprofit, Moving Michigan Forward, to hire a team of public relations specialists to aid his administration as it struggles with the Flint water contamination crisis.
The move drew sharp criticism from opponents who believe Snyder, a Republican, has mishandled the emergency.
“He shouldn’t be hiring PR firms to help with this crisis,” the state’s Democratic Party Chairman Brandon Dillon told reporters then. “It’s not about his image, it’s about the health of the city of the people of Michigan.”
These nonprofit groups raise money from private sources, are exempt from any spending restrictions and are not required to disclose contributors. They are used from one side of the national political spectrum (President Barack Obama’s Organizing for Action) to the other (Republican strategist Karl Rove’s Crossroads GPS).
The tax-exempt 501(c)(4) groups have proliferated since the Supreme Court’s landmark “Citizens United” decision that cleared the way for corporations and labor unions to raise and spend unlimited amounts of money. While super PACs have to disclose their donors, many of those groups’ biggest contributors are 501(c)(4) groups that don’t have to, meaning the identity of the actual contributor remains a mystery. And while candidates are prohibited from dealing directly with super PACs, they can coordinate with the 501(c)(4) groups.
The fear among good government groups is that the nonprofit’s donors may be looking to curry influence with elected officials through their sizable checks.
“It is a blurring of the lines between the shadow governments of these outside groups and the people’s business,” said Susan Lerner, the executive director of watchdog Common Cause New York.
Her group has called for New York City’s Campaign Finance Board and its Conflict of Interest Board to probe whether Mayor Bill de Blasio’s nonprofit groups have violated city law as they push for his agenda, including his sweeping affordable housing plan.
One of those nonprofits, the Campaign for One New York, has received more than $1 million in donations from real estate developers since its launch in 2014. Many of those corporate donors have projects underway in the city and have backed the mayor’s housing plan.
As a mayoral candidate in 2013, de Blasio loudly decried the use of such groups.
Proponents of the groups say they are necessary to not just promote de Blasio’s plans, but to counteract the big money expenditures of his political opponents during high-profile tussles over issues like Uber and charter schools.
And the mayor defended the practice by noting that his groups disclose donors even though they are not required to do so.
“It’s not dark money if it’s disclosed,” de Blasio said last week.
