At least $2.6 million from secret donors – known as dark money – has made its way to the four Orange County races key to the battle for control of Congress, according to a Voice of OC review of federal data. And more is expected between now and Election Day on Nov. 6.
The money found so far has been funneled through at least 14 nonprofits and political action committees, most of which are based out of state. Their names include American Action Network, Center for Voter Information, and American Future Fund.
The money has been spent on ads supporting or opposing each of the eight candidates seeking the contested OC seats in the U.S. House of Representatives.
Voters have no way of seeing who provided the $2.6 million-plus in dark money supporting and opposing these candidates. And much of it traveled through multiple groups before it was spent on TV and internet ads, making it more difficult to trace.
“[We’re] seeing these outside groups really affecting the democratic process,” said Victoria Farrar-Myers, a Southern Methodist University professor who studies campaign finance and previously worked for Republican Rep. Chris Shays of Connecticut.
“The American people don’t know who these folks are. They’re pouring millions and millions of dollars” into elections and affecting outcomes, she said.
The four Orange County seats – California’s 39th, 45th, 48th and 49th districts – are attracting some of the largest campaign spending in this year’s high-stakes election.
Out of the 435 U.S. House seats up for election, OC districts rank third, fourth and sixth nationally in spending this cycle, according to the latest data this week from the Center for Responsive Politics (link).
The OC seats all are held by Republican incumbents, and Democrats are trying to “flip” them as part of their effort to take control of Congress.
Dark Money on Both Sides of the Aisle
Dark money has supported or opposed each of the remaining candidates in the competitive OC seats this year, in ways that help both Republicans and Democrats. It includes $513,000 supporting Republicans Diane Harkey and Young Kim through the nonprofit American Future Fund; $59,000 opposing Kim and fellow Republican Rep. Dana Rohrabacher through the Center for Voter Information; and $163,000 opposing Rohrabacher and Harkey by the partially-dark LCV Victory Fund.
Voice of OC contacted the eight OC candidates’ campaigns to ask their positions on dark money and whether they support or oppose it. Among the eight campaigns, five did not provide statements and two, Gil Cisneros and Harley Rouda, sent statements saying they refuse to take “special interest” money while not stating a position on dark money overall, which typically is spent without going through candidates’ campaigns.
The campaign of Katie Porter, who is running against Rep. Mimi Walters in south county’s 45th District, was the only one to state her overall position on dark money, pointing to her campaign platform calling for disclosure of secret election donors.
While part of the OC Congressional money has been dark, campaign disclosures show the sources of much of the $50 million-plus spent on these races. In many cases even the disclosed money is difficult to track – both for Democrats and Republicans – with the money traveling through multiple committees and mixing with other money before funding election ads.
Among the major donors whose money has ended up in the OC races are several billionaires who live outside California. They include Sheldon Adelson and Charles Koch on the Republican side, and George Soros and Michael Bloomberg on the Democrat side.
The role of dark money in American elections has jumped significantly in recent years, rising from $1.8 million in the 2004 election cycle to $92 million in the 2016 cycle, according to Open Secrets (link).
Last week, the U.S. Supreme Court weighed in (link), declining to block a lower court decision that requires disclosure of certain dark money spending by nonprofit groups. The order applies only to direct spending by nonprofit groups on political ads that say to vote for or against a candidate, which is only part of the way dark money makes its way into elections.
The ruling does not affect “issue ads,” which can paint specific candidates in a positive or negative light, but don’t explicitly say to vote for or against them.
And in many cases, including Orange County, a large portion of the dark money is not directly spent by nonprofit groups on ads, but rather flows from a dark money nonprofit through one or more political action committees, known as PACs, before it is used to pay for ads.
In this year’s Congressional races, there is “a lot of outside spending, a lot of dark money spending, but sometimes it’s not as easy to see that because it gets laundered through the super PACs,” said Mike Franz, co-director of the Wesleyan Media Project at Wesleyan University, which tracks political ad spending across the country.
“There is sometimes money coming from super PACs which are ostensibly not dark money groups, but are receiving most of their money from dark money groups,” he said.
Much of the dark money discovered so far in the OC races flowed through American Action Network, a nonprofit that supports Republican congressional candidates across the country. It gave at least $25.4 million this cycle to the main Republican super PAC group supporting congressional candidates, the Congressional Leadership Fund (CLF), where it’s constituted about a quarter of the $101 million the super PAC raised.
CLF then spent at least $2.5 million opposing Democratic candidates in the OC races, and gave $1.3 million to the American Future Fund Political Action, which spent $1 million supporting Republican candidates in Orange County.
One of the larger groups on the left is the LCV Victory Fund, a PAC run by the League of Conservation Voters (link) whose funding this election cycle is at least 20 percent dark money. Last week, it spent $60,000 on digital ads opposing two Republican candidates in the OC races, Dana Rohrabacher and Diane Harkey.
And the Center for Voting Information, a D.C.-based group that describes itself as progressive, spent abut $71,000 on mailers opposing Republican candidates for the OC congressional races before the primary.
More Dark Money Expected Before the Election
The dark money spending reported so far has centered on the June primary election, when voters were narrowing a large field of candidates down to the top two vote-getters in each seat who would advance to a runoff.
And a significant amount of the dark money in OC was spent in the month before the election. If that strategy continues, voters will see a wave of additional dark money ad spending in October and early November.
“This election is still going to be impacted by dark money,” said Farrar-Meyers, the SMU professor.
While dark money has raised concerns among people who support election transparency, others warn that requiring political donors to be disclosed suppresses the First Amendment right (link) of people with unpopular views to participate in elections.
Porter, the only OC candidate to reply with a position on dark money, says in her campaign platform that voters “have a right to know which special interests groups are spending millions to influence their vote.”
“The lack of disclosure and transparency under our current campaign finance laws has created a system that prevents voters from knowing who is spending money to influence their vote,” her platform states, adding she supports the DISCLOSE Act, which requires disclosure of donors to organizations that spend $10,000 or more on political ads.
Judges Express Concern, Require Some Disclosure
The recent Supreme Court decision could affect dark money fundraising, since some donors might not give to the groups out of concern their names would become public, said Farrar-Meyers. But much of the dark money has already been raised, she added, so the court decision will likely have minimal impact this election.
A lack of disclosure about sources of money flowing into Congressional races makes it more difficult to enforce federal laws against foreign corporations and individuals spending money in American elections, according to court rulings.
U.S. District Judge Beryl A. Howell, in the decision (link) the Supreme Court last week refused to block, concluded by saying a federal regulation that facilitated dark money “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.”
She referenced a 2010 decision by the Washington, D.C. federal appeals court, which found that requiring disclosure of “who is speaking about a candidate and who is funding that speech…deters and helps expose violations of other campaign finance restrictions, such as those barring contributions from foreign corporations or individuals.”
One example of foreign money that’s known to have found its way into U.S. elections was a Chinese-owned investment company that donated $1.3 million to a U.S. super PAC in 2015 (link). If the money had first flowed through a nonprofit dark money group, the firm’s identity could have remained hidden.
“We don’t know with some of these dark money entities – has foreign money flowed into them?” said Farrar-Myers.
“The best disinfection to corruption is light,” she added, paraphrasing former U.S. Supreme Court Justice Louis Brandeis. “The best way to shed light on it,” Farrar-Myers added, is to require groups to disclose where their money comes from.
Voice of OC asked U.S. House Speaker Paul Ryan’s chief spokeswoman if Congress is planning on doing anything about non-disclosure of campaign money sources, and if Ryan is concerned if the non-disclosure opens the door for foreign money to influence U.S. elections.
The spokeswoman, AshLee Strong, referred comment to Ryan’s political campaign spokesman, who said he likely wouldn’t have answers. Strong didn’t return follow-up emails.
What Disclosed Money Shows
Separately from the dark money, federal filings show employees of Walt Disney Co., which owns and operates Disneyland in Orange County, contributed $94,000 to the Democratic Congressional Campaign Committee, which has spent more on the OC congressional races than any other outside group.
The campaign disclosures also show most of the $63,000 in Atlas PAC ads supporting Rohrabacher in May came from George O’Neill Jr. of Florida, an heir to the Rockefeller fortune who advocates for stronger U.S.-Russian relations.
A July federal criminal indictment against accused Russian spy Maria Butina said O’Neill, referred to as “U.S. Person 2,” hosted dinners with Butina and American political figures. Rohrabacher attended one of those dinners with Butina and O’Neill in January 2017, according to news reports (link).
Law enforcement officials have not questioned Rohrabacher about the dinner, a spokesman for the congressman said in July (link).
Rohrabacher’s campaign didn’t return phone messages seeking comment on the donations. Efforts to reach O’Neill at phone numbers listed under his name and city were unsuccessful.
Tricky to Trace Money Through Democrats’ Biggest PAC
The largest vehicle for money supporting Democrat candidates is difficult to track.
ActBlue gathers online donations – ranging from a few dollars each to $100,000 – from donors across the country and then transfers the money directly to candidates and Democratic Party campaign accounts.
It’s the largest fundraising committee for federal elections this cycle (link) – collecting and transferring more than $810 million so far to candidates and political committees that seek to influence voters. That includes millions of dollars forwarded to the OC congressional races, including the committees controlled by the candidate.
But it’s difficult to tell which candidates particular donors to ActBlue are supporting.
ActBlue’s largest donations are millions of dollars to national-level Democratic committees like the DCCC, Priorities USA Action and House Majority PAC – which in turn spend on local Congressional races, including OC’s contested seats.
And while the online FEC data shows many of those transfers as an “Earmarked Contribution,” it does not show which candidates (link) the money supporting through the intermediary committees.
ActBlue’s disclosure reports are massive – July monthly report, for example, had over 2 million individual donations within about 4,500 pages – and the FEC’s website gives error messages when viewers try to load the filings (link).
The Voice of OC review of dark money in the OC election examined federal campaign finance data published online by the Federal Elections Commission (FEC), which has data showing tens of millions of separate donations to groups whose money ended up in the OC Congressional races.
Additional dark money, which is not disclosed to the FEC, has been spent on TV ads in the OC races, though that spending is more difficult to track.
Vacant Seats at Federal Enforcement Body
Enforcement of federal campaign money laws has been all the more difficult this year because two of the six commission seats at the FEC have been left vacant, said Franz of the Wesleyan Media Project.
“This is huge,” because whenever the FEC wants to take any action it needs four votes, Franz said.
Two of the current commissioners are Republicans, one is a Democrat, and one is an independent who essentially is a Democrat, Franz said.
They tend to split 2-2 on enforcement issues or legal opinions, he said.
“They’re the most polarized commissioners that we’ve ever had in the entire 40-year history of the commission,” Franz said, adding it’s “very unlikely” there would be a 4-0 ruling on something as controversial as dark money.
The November election outcome hinges largely on who turns out to vote in the Nov. 6 primary, election experts said. And while outside groups are playing a major role, other factors also affect the outcome.
“Money doesn’t always equal win,” said Farrar-Myers. “A lot of attention being put on the large sums of money…but ultimately elections are won and lost” on turnout, she added.
“It’s turnout, turnout, turnout, turnout, turnout. That was true with the first election, and it will be true going forward. It’s about who gets the right people out [on] the day.”
Voice of OC will continue to track campaign money in the contested Orange County congressional races. Know of additional dark money in the OC congressional races, or interesting donations or spending? You can reach out to reporter Nick Gerda at firstname.lastname@example.org.