Dark Money Hits $100 Million With Help from Single-Candidate Groups

Spending by groups that don’t disclose their donors in the 2014 midterm elections has crested $100 million, a figure that is well ahead of what was spent on congressional races at this point in any other cycle. And the most is yet to come.

How much more? Probably at least another $100 million, if past experience is a guide. In the last seven cycles, going back to 2000, more than 54 percent of the eventual total dark money spending, on average, occurred in the final weeks before the election. In only one cycle, 2008, had more than half of it been spent by Oct. 8. In all other cycles, anywhere from 50 to 72 percent of dark money outlays came after that date. (All figures are based on spending that the groups reported to the FEC.)

And despite the slowdown of 2014 spending relative to the 2012 cycle, the current cycle outpaces all previous ones when spending on the presidential contest is factored out. By this point in 2012, only $73 million had been spent in congressional races by groups that don’t disclose their donors — mostly 501(c)4 “social welfare” organizations and 501(c)(6) trade associations under the tax code. In 2010 that total was just under $65 million.

And this is a dark money landmark year for another reason: the birth of the single-candidate 501(c) organization.

Last summer, a 501(c)(4) called Oklahomans for a Conservative Future dropped nearly $1.3 million in the state’s Republican primary in an effort to support T.W. Shannon’s failed bid against Rep. James Lankford (R-Okla.) to replace retiring GOP Sen. Tom Coburn. The group, founded only months before the primary, has gone dormant since Shannon’s defeat.

In Kentucky, which is hosting one of the most contentious Senate races in the country,  more than one-fourth of the $24.8 million in reported outside spending in the race has been spent by Kentucky Opportunity Coalition, also a 501(c)(4) organization. All of KOC’s nearly $7 million in reported spending has gone towards ads attacking Democratic candidate Allison Grimes, who is seeking to oust Republican Minority Leader Mitch McConnell.

KOC was founded in 2008, according to Kentucky state records, and the IRS granted the group exempt status in February 2009. The group has never filed a Form 990 — an annual submission that lays out some of a 501(c) organization’s activities — with the IRS because it claims never to have raised more than $50,000, thus falling into a category that is exempt from the filing requirement. IRS summary data for 2012, the last year for which data is available, says that KOC neither raised nor spent any money that year. Now, it is outspending every other outside spending group — 501(c), super PAC, PAC or party committee — active in the Kentucky race by more than $2.5 million.

The final stretch

At this point in 2012, the dark money groups that would go on to be the top 10 spenders had spent, on average, about 38 percent of the funds they would ultimately end up reporting to the FEC, and most signs indicate that these groups stand ready to make generous outlays for their final appeals to voters.

And these figures don’t include millions more spent by the groups on “issue ads” that don’t explicitly call on voters to elect or defeat a candidate; such ads don’t have to be reported to the FEC unless they occur 30 days before a primary or 60 days before a general election. Crossroads GPS, for instance, is said to have raised about $75 million this year, a sizable portion of which it has already spent on “issue ads” like this and more of which it plans to spend in the coming weeks. It’s already making good on that promise in Kentucky and Louisiana.

Another conservative 501(c)(4) group, Americans for Prosperity, has spent more than almost any other organization, disclosing or nondisclosing, in this cycle, but very little of it has been reported to the FEC. For months, the group, which has said it plans to spend $125 million in 2014, has been running “issue ads” attacking Democratic Senate candidates in states like North Carolina, Louisiana and Arkansas. Last week it announced that it plans to begin calling directly for the election or defeat of such candidates — making expenses that will have to be reported. Unsurprisingly, those targeted by the group in recent weeks, Sens. Mary Landrieu (La.) and Mark Pryor (Ark.) were the subject of AFP “issue ads” last spring and summer.

Though the spending reported to the FEC by groups that don’t disclose their donors is still dominated by conservative organizations, liberal dark money groups are also spending more than in previous cycles. With $19.4 million in total spending, liberal dark money groups have just edged out the $18.6 million they had spent at this point in 2012, but that total includes some presidential spending. Compared to the last midterms, however, the difference is much more noticeable. As of October 8, 2010, liberal dark money groups had spent just $2.7 million.