Outside money or so-called “dark money” in politics isn’t easy to track. Even the terms are confusing. Here’s a quick guide:
Q: What is “outside money”?
A: This is money spent on campaigns by groups or individuals and made independently of the candidates or their campaigns and not coordinated with them. The sources can be the traditional party organizations, super PACs or the so-called “dark money” groups.
Q. Why is it called dark money?
A. Because the source of the money is allowed to remain hidden – or in the dark – because of loopholes in federal disclosure laws.
Q: What is a PAC?
A: Political action committees, or PACs, amass political contributions from individuals. Most are sponsored by corporations, trade groups, labor unions and professional groups. PACs can contribute up to $5,000 per election to federal candidates. Primary and general elections count separately.
Q: What is a super PAC?
A: A special kind of committee created after the Supreme Court’s 2010 Citizens United case and other court decisions. Super PACs can raise and spend money to support or oppose candidates but must do it independently of a candidate’s campaign. They are not subject to the federal limits on fundraising and spending that regular PACs have. Super PACs can take money from companies, nonprofits, unions and individuals, while regular PACs can only take it from individuals or other PACs. Super PACs must also disclose their donors to the Federal Election Commission, where the public can see the records – unless the group donating to a super PAC is a nonprofit that doesn’t disclose its donors.
Q: What groups don’t disclose donors and why?
A: Under federal tax law, they are known as 501(c)(4) groups. Named after a section of law, these tax-exempt, nonprofit, issue advocacy groups can participate in politics as long as that isn’t their primary purpose. They’re referred to as “social welfare” groups under the IRS code because that’s what they’re supposed to be devoted to. Americans for Prosperity, a conservative economic policy group, is one example. So are the National Rifle Association and the Sierra Club.
Q: What was the significance of Citizens United?
A: The January 2010 Supreme Court ruling in the case of Citizens United v. Federal Election Commission overturned a ban on corporate and union involvement in federal elections. Now these and other organizations can spend unlimited amounts of money to fund political advertisements. The money can be used for what’s known as independent expenditures, meaning they are not direct contributions to the candidates’ campaigns.
Source: Center for Responsive Politics in Washington, a nonpartisan and nonprofit research group that tracks money in U.S. politics