Civics Essential: How dark money, negative ads & campaign finance impact Ohioans at the ballot box

Sick and tired of all the negative and often misleading campaign ads this fall?

If you’re an Ohio resident, you have a lot of company. In a University of Akron poll of 1,000 Ohioans in 2016, 80 percent of those polled say negative campaigning disturbs them, and 76 percent say it’s hurting our democracy. Worse, nearly three in four respondents say negative campaigning discourages Ohioans from exercising a basic right – voting.

What many voters don’t know is that the increasing number and negativity of campaign ads is tied directly to changes over the last decade in the nation’s and Ohio’s election and campaign finance laws. The growing divisiveness coincides with the influx of attack ads paid for by outside groups funded by billionaires, corporate interests, and unions. Often such groups have generic-sounding names that make them hard to peg politically, such as America First, Americans for Prosperity, Club for Growth, and Change Now PAC.

Ohio at the center of national issue

Ohio has been at the center of the nation’s continuing legal debate over the free speech rights of political donors versus the rights of voters to know who is paying for political ads and whether or not those ads are truthful. As an important “swing state” with hotly contested races between Democrats and Republicans, Ohio has become a magnet for political fundraising and attack ads.

Most attack ads are paid for by “outside spending” groups – that is, non-profit organizations and Political Action Committees (PACs) that by law must raise and spend their money independently (or “outside”) of a particular candidate’s campaign. The donors are usually from “outside” the voter’s state or legislative district as well. Between 2010 and 2016, Ohio saw more outside spending activity than any other state, according to a study by the Wesleyan Media Project.

The U.S. Supreme Court’s “Citizens United vs. Federal Elections Commission” ruling in 2008 opened the floodgates to fundraising and spending on campaign ads. A 5-member court majority reasoned that any amount of spending on political advertising, as long as it is not coordinated with a candidate or candidate’s campaign, is protected free speech under the First Amendment. But the court’s 4-member minority says they feared that too much spending on political advertising by unions or corporations could lead to corruption of elected officials and, therefore, should be regulated by the government, says Kevin Shook, an expert on media law at Frost Brown Todd attorneys in Columbus.

The court’s majority decision struck down many of the restrictions on political fundraising and spending that were put in place by Congress and individual states following the Watergate scandal, when paper bags of cash were secretly exchanged between donors and political operatives during President Richard Nixon’s re-election campaign in 1974.

Since the Citizens United ruling and several related court decisions that followed in 2010, groups can raise unlimited amounts of money from wealthy donors, corporations, unions, and other groups to influence elections. Some types of non-profit organizations can collect millions of dollars in contributions without identifying their donors, a practice known as “Dark Money.”

At the same time, misleading and untruthful attack ads are now safe from state regulation in Ohio, at least until Ohio legislators act to change the laws, thanks to a 2014 U.S. Supreme Court ruling. U.S. Rep. Steve Driehaus, who was running for re-election in Ohio in 2012, filed a complaint with Ohio's election commission that a billboard campaign accusing him of having supported abortion because he voted for Obamacare was blatantly false. Ohio was one of 15 states at the time that banned political ads that were determined to be knowingly false or grossly negligent of the facts.

The Susan B. Anthony List, an anti-abortion group, filed suit against Driehaus’s complaint, arguing that their billboard ads were indeed true and that any state restriction would violate their right to free speech. The U.S. Supreme Court didn’t rule directly on the truth or falsity of the ad, but says that the Ohio Elections Commission was in no better position to determine the truth of political ads than voters. The court also expressed concern that the determination process took too long to be useful to voters and that it shouldn’t impose criminal penalties under the First Amendment.

Shook says the Ohio General Assembly can and should change the law to meet the guidelines set down by the Supreme Court. “I think there is a solution but no one (in the state legislature) has made a move,” he says. “You could speed up the process and establish (the election commission) as a judge taking an advisory position only to the candidates.”

Here come the midterms

The 2018 midterm election has again made Ohio a showcase for political attack ads and outside spending in close races for governor and a handful of congressional districts, including those in the Cincinnati, Dayton, Columbus, and Cleveland areas.

To counteract an expected “Blue Wave” of Democratic victories in the November election, the Congressional Leadership Fund, a conservative super PAC aligned with Paul Ryan, had raised over $100 million by August 27 in an effort to maintain GOP control of the House, according to The Center for Responsive Politics, a non-partisan group that tracks political fundraising and expenditures. The Democrats are responding in kind, and then some, with the Democratic Congressional Campaign Committee having raised more than $200 million by Sept. 24 for its own war chest, according to the center.

What complicates matters even more for voters is that loopholes in campaign finance laws can permit outside groups to raise their money without having to identify their donors – a practice known as Dark Money. The number of outside groups has soared since their right to free speech was affirmed in 2008 by the U.S. Supreme Court’s controversial decision in the Citizens United case, and so have their Dark Money contributions. Since 2008, outside groups that can withhold the identity of their contributors have spent more than $1 billion on political advertising, according to data compiled by the Center for Responsive Politics.

Candidates for office complain that the rise in outside spending is wresting control of campaigns away from the candidates themselves and their local constituents. “You spend two years raising a couple of million dollars and you think you have control over the message of your campaign,” Driehaus says. “And then some outside entity comes in and dumps three, four, or five million for or against you and it’s no longer your campaign. You’re just along for the ride.”

More Dark Money donors may have to be revealed shortly after a recent federal court ruling on a lawsuit involving another Ohio campaign. The suit was filed after the nonprofit organization known as Crossroads GPS spent $6 million in television ads in Ohio to defeat Democratic Senator Sherrod Brown in the 2012 election. When the Federal Elections Committee deadlocked on whether Crossroads should be forced to identify its donors, Citizens for Responsibility and Ethics in Washington (CREW), a campaign-finance-reform group, filed suit against the FEC and Crossroads, arguing they were violating federal election laws.

Last month, a federal judge in Washington ruled in favor of CREW, giving the FEC 45 days to issue a new regulation that would require donor disclosure for contributions over $200. The U.S. Supreme Court affirmed the ruling by refusing to consider an appeal.

A matter of free speech?

Advocates for disclosure hailed the ruling but were cautious in estimating its impact. The court decision “does not solve all the current disclosure problems, but this is a victory for transparency,” Rick Hasen, a professor of law and political science at the University of California-Irvine, wrote on his Election Law Blog.

Knowing who’s paying for a political ad is crucial to informing voters and keeping government free of corruption, says Catherine Turcer, executive director of Common Cause Ohio, a nonpartisan group that advocates for greater government accountability.

“If there’s good disclosure, voters can consider the source of the information and their point of view. What do these (donors) want from the candidate?” she says. “It’s also a way to get at government corruption. Is there some kind of quid-pro-quo going on here” between the candidate and a donor seeking favors?

Turcer also noted that disclosure gives reporters the information they need to ask tough questions of candidates and elected officials about donations that may affect their policies.

Advocates for free speech, on the other hand, fear the disclosure ruling will put a damper on political donations and provide voters with fewer ads and less information. The Institute for Free Speech expressed concern on its website that “the decision may not receive the attention it deserves or, more troublingly, be read broadly to chill independent speech… It is unclear whether definitive answers will emerge in the remaining days in the 2018 election cycle.”

Money has been a big part of election races in Ohio and across the country for more than a century. Mark Hannah, the Ohio Republican Party boss when William Howard Taft ran successfully for president in 1908, is famous for having quipped: “There are two things that are important in politics. The first is money and I can’t remember what the second one is.”

It’s a new era with old laws

But what’s changed in the cat-and-mouse game of campaign financing is that the laws aimed at identifying donors and curbing the worst abuses of fundraising have not kept pace with the rapid changes in media technologies and political organizing, Turcer says.

Ohio law bans corporations from donating money directly to a candidate or a candidate’s campaign. But after the Citizens United ruling, the Ohio Election Commission made it voluntary for corporate donors to identify themselves when contributing to PACs and non-profit organizations that aren’t coordinated with a candidate.

That doesn’t sit well with Turcer or Jen Miller, executive director of the League of Women Voters of Ohio. “We want stronger disclosure laws overall,” Miller says. “The public has a right to know who is donating to election advertising.”

For national elections, the Federal Elections Commission requires disclosure of the identity for all or some donors to political campaigns, depending on the type of fundraising organization. But there are numerous loopholes that can keep voters from knowing who is sponsoring a political ad.

Non-profit organizations known as social welfare groups or 501 (c) (4) organizations can raise and spend unlimited amounts of money from billionaires, corporations, unions or any other group to influence elections –without naming their donors -- as long as they don’t coordinate their efforts with the candidate or the candidate’s political party.

Those same non-profit organizations can donate directly to a candidate’s PAC, which then identifies the organization as the donor without having to reveal individual contributors.

In recent years, candidates have also evaded the disclosure rules by forming “exploratory committees” to raise money before officially declaring their candidacy in a race.

PACs can file their disclosure reports on a monthly, quarterly, or even a semi-annual basis so that funds raised by PACs in the final months and weeks of the election can be spent and votes cast before the report is due. Wealthy donors can also hide their names by forming a shell company to donate to their favorite PAC.

Conservative advocates of free speech argue that government limits on spending for independent political speech, including attack ads, is a violation of the First Amendment. “The right to free speech, including the right to speak out about who should be elected to public office, is a fundamental American right that is essential to democratic debate,” The Institute for Justice argues on its website. “Similarly, the right of individuals to band together and pool their resources to make their advocacy more effective is another fundamental American right.”

But advocates for government restrictions on political fundraising argue that full disclosure and donation limits are crucial to a functioning democracy. Unlimited amounts of money in politics from anonymous donors “creates a perverse incentive for elected officials to listen more to big money interests rather than their own constituents,” Miller says.

So… how can you tell? Ads paid for by the candidate or a registered PAC will be labeled as such. But the truth is, the average citizen has no way of tracking down the source of “Dark Money”-funded political ads. What they can be sure of, however, is that the funders are hiding their identity.

People will have to decide for themselves whether to trust them.
 

Now take the quiz.