Anonymous Donors Spent Record Amounts on 2016 State Ballot Questions
by Iris Zhang, Chisun Lee
January 12, 2017
The problem of “dark money” — election advertising by groups who conceal their donors, often behind benign-sounding names — tends to get the most attention in high-profile federal contests. But it can be worse in the context of state ballot measures, where voters directly decide policy questions that can carry major economic consequences.
In 2016, voters on ballot measures across the country faced unprecedented levels of secret spending, on issues ranging from the minimum wage to the sales tax, preliminary records show. The numbers continue a trend we identified in a six-state analysis last summer: secretive political advertising shot up by 38 times on average between 2006 and 2014, faster than it did at the federal level. The 2010 Citizens United decision and related developments had empowered entities such as “social welfare” nonprofits and trade associations to spend unlimited sums on politics without having to disclose their donors.
But 2016 brought some good news, too: Though California saw huge amounts of spending on its 17 ballot questions, its tough transparency laws — which our analysis credited with surprisingly low secret spending numbers in the past — enabled voters to know who was behind much of the advertising.
Last year Massachusetts and Maine saw the most expensive ballot initiative campaigns in their history. Of the nearly $20 million spent in support of charter school funding in Massachusetts, approximately $16 million came from out of state and $15 million from non-disclosing groups. Combining the spending on both sides, this one ballot issue drew $33 million in spending — more than twice the cost of any other ballot initiative campaign in Massachusetts history.
Maine voters saw $19 million in advertising about five 2016 ballot initiatives, at least 60 percent of which came from undisclosed sources. The Everytown for Gun Safety Action Fund and the NRA Institute for Legislative Action, both national social welfare groups not required to disclose their donors, butted heads on a proposed law requiring unlicensed gun traders to undergo background checks, each spending at least $5 million and $1 million, respectively, to support and oppose the change. The four other questions—whether to legalize marijuana, impose an education tax on high-income households, increase the minimum wage, establish ranked-choice voting—also saw millions in secret spending. In response to these unprecedented amounts, the five-member state ethics commission unanimously called for legislation to require any organization that gives more than $100,000 to a Maine political party, PAC, or ballot question committee to identify, among other things, the organization’s top five donors in the past year.
In Georgia last year, businesses with interests in education privatization funneled hundreds of thousands of dollars in contributions through social welfare nonprofits in support of an amendment that would allow the governor to appoint a superintendent to oversee “chronically failing” public schools. That superintendent would have the power to convert a public school to a charter school without involving the local school board. Voters may never have learned about the hidden interests, if not for an investigation by the Atlanta Journal Constitution.
Similarly, in Oklahoma social welfare nonprofits with generic names, such as Oklahoma’s Children Our Future and Catalyst Oklahoma, raised millions to respectively support and oppose a 2016 measure to increase the sales tax by one percent to fund public schools. Both groups have not disclosed their donors. In Florida groups named Let’s Preserve the American Dream and 60-Plus Association were among those who spent $26 million on a ballot measure to block solar energy.
Of the states we examined last year only California saw a decrease in secret spending after Citizens United, despite drawing the greatest amount of outside spending, thanks to relatively tough disclosure rules and enforcement. Last year, groups spent close to $500 million advertising about 17 ballot questions. But transparency measures made public who was behind the barrage of ads: tobacco companies opposing a cigarette tax, drug companies battling a price ceiling, hospitals and teachers unions promoting a tax increase to fund hospitals and schools. Although concerns about the influence of big money — whether dark or transparent — remain, special interests should not be able to hide that influence from the public when strong disclosure laws can make a real difference.