Light on the horizon aimed at dark money: SCOTUS requires non-profits disclose donors

In the midst of the wall-to-wall media hysteria surrounding the confirmation of Judge Brett Kavanaugh to the Supreme Court and the employment status of Deputy Attorney General Rod Rosenstein, a court battle around Federal Election Committee (FEC) regulations that could shine a light on some of the dark money in politics went relatively unnoticed.

The battle revolves around a 2012 administrative complaint brought by Citizens for Responsibility and Ethics in Washington (CREW) against Karl Rove’s Crossroads GPS after news outlets reported on comments Rove made at an event for American Crossroads, a super PAC tied to Crossroads GPS.

According to reports, Rove, a Republican political operative and adviser to Crossroads GPS, told the audience at the event that an out-of-state donor was pledging $3 million in a “matching challenge” to contribute to the group’s efforts supporting Ohio State Treasurer Josh Mandel in his unsuccessful bid against Democrat Sherrod Brown in the 2012 election for a U.S. Senate seat in Ohio.

The group raised an additional $1.3 million as a result of the matching challenge and spent $6.3 million in the race against Brown.

CREW claimed Crossroads GPS skirted campaign finance laws by not disclosing the name of Rove’s anonymous donor or of people who contributed to the matching challenge.

The FEC denied CREW’s administrative complaint and CREW sued the commission in 2016, claiming it was ignoring Congress’ mandate with the regulation that allowed Crossroads GPS to keep its donors secret.

The complaint challenged a 38-year-old FEC regulation that requires disclosure only when a donor designates his or her money for a specific independent expenditure, but does not require donors’ identities be made public under other conditions, including when they seek to support or oppose an individual candidate.

On Aug. 3, U.S. District Court Judge Beryl Howell essentially sided with CREW, giving the FEC 45 days to come up with new regulations that would require more disclosure of donors to groups like Crossroads.

In her order, Howell wrote:

“The challenged regulation . . . blatantly undercuts the congressional goal of fully disclosing the sources of money flowing into federal political campaigns, and thereby suppresses the benefits intended to accrue from disclosure, including informing the electorate, deterring corruption, and enforcing bans on foreign contributions being used to buy access and influence to American political officials.”

Crossroads sought an emergency injunction two days prior to the deadline of Sept. 17, which was denied by the D.C. circuit; however, Chief Justice John Roberts intervened with an emergency stay.

On Sept. 18, the full Supreme Court overturned Robert’s stay, meaning that Crossroads GPS and other 501(c)4 groups will now be required to disclose donors contributing more than $200 to organizations’ independent expenditure efforts aimed at influencing federal elections.

FEC commissioner Ellen Weintraub, a Democrat, tweeted her reaction:

“This is a great day for transparency and democracy,” CREW Executive Director Noah Bookbinder said. “Three courts, including the Supreme Court, have now rejected Crossroads’ arguments for a stay, meaning we’re about to know a lot more about who is funding our elections.”

Crossroads said in a court filing the Supreme Court ruling could result in “chilling core First Amendment speech and association.”


[Politico] [Reuters] [Roll Call] [Washington Post]