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CEO DATELINE – Federal judge rules against ‘dark money’ contributions

Aug. 7, 2018
By Walt Williams

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A federal judge has ruled against a Federal Election Commission regulation that allowed many nonprofit groups to avoid publicly disclosing donors who gave money to influence federal elections, the political watchdog organization Center for Responsive Politics reported Monday.

The recent ruling by U.S. District Court Judge Beryl Howell could potentially result in some nonprofits being required to disclose donors who give more than $200 to impact federal elections, according to CRP. The Internal Revenue Service allows 501(c)(4) “social welfare” groups and some other nonprofits to spend money on politics as long as influencing elections is not the primary purpose of the organization. Such entities are often referred as “dark money” groups because they can hide their donors.

However, Howell said an FEC regulation allowing such groups to withhold donor information “blatantly undercuts the congressional goal of fully disclosing the sources of money flowing into federal political campaigns.”

The ruling only applies to what the FEC defines as independent expenditures, which are ads and other forms of communications that explicitly endorse or oppose federal candidates. So-called “issue ads” that do not urge voters to endorse or reject candidates would not be affected.

The lawsuit was brought by the watchdog group Citizens for Responsibility and Ethics in Washington against the nonprofit Crossroads GPS after the latter refused to disclose who donated $6 million to defeat U.S. Sen. Sherrod Brown (D-Ohio) in 2012. CREW filed a complaint with FEC, but the agency dismissed it.

FEC can appeal the ruling. If not, the agency has 30 days to reconsider its original decision to dismiss the complaint and 45 days to issue interim regulations that comply with Howell’s findings.