- It's comforting to think about American political institutions as transparent and open to scrutiny.

But today's guest describes a campaign finance system built increasingly on so-called dark money.

She's Anna Massoglia, this week on "Story in the Public Square."

(bright music) (bright music continues) (bright music continues) - Hello and welcome to "Story in the Public Square" where storytelling meets public affairs.

I'm Jim Ludes from the Pell Center at Salve Regina University.

- And I'm G. Wayne Miller, also with Salve's Pell Center.

- And our guest this week is Anna Massoglia, an investigative journalist who is now the editor in chief of the online newsletter "Influence Brief."

She's also the author of a Brennan Center study on dark money in the 2024 U.S. election.

She's joining us today from Washington, D.C. Anna, thank you so much for being with us.

- Thank you for having me.

- So we wanna get to the Brennan Center study, but I think maybe as a point of departure for folks who maybe aren't as familiar with the phenomena, what is dark money?

- Well, dark money is, to put it very simply, funds from anonymous sources where it could be an individual or in a company, but that source is not known because it is routed through a group that does not disclose its donors into influencing primarily U.S. elections or politics.

This could be through most commonly groups like 501(c)(4) nonprofits that are not technically supposed to exist for political purposes, but because of various loopholes in the law can take unlimited sums from donors, not disclose those donors since it is not inherently political committee, and then spend millions and millions of dollars on politics as long as it follows certain rules that are very limited.

- Is this a relatively new phenomena in American politics?

- 501(c)(4) nonprofits, the growth of 501(c)(4) nonprofits specifically has boomed since the Supreme Court Citizens United decision in 2010, which opened the door for more types of communications.

But the concept of dark money is about as old as politics where we've seen different forms of that over the years, whether it is exchanging funds in back alleys, suitcases full of cash, or other ways of trading favors.

More recently, after Richard Nixon, where we had the Federal Election Commission and the evolution of campaign finance rules, we have seen new regulations of the old fashioned corruption and also new tactics being exploited by dark money groups and other political operatives focusing on things like 501(c)(4) nonprofits, focusing on online media.

So in short, dark money is a constantly evolving concept.

It's no longer suitcases full of cash.

It's become much more complex, routing money through different types of funds and into the political system.

- So how much dark money was spent in the 2024 election cycle?

Do you have an estimate of that?

- We do.

In the 2024 election cycle, we saw around over $1.8 billion, and that's billion with a B.

- Wow.

- And so it's a huge sum coming in through a variety of ways.

And inherently with this analysis, this is just what we were able to quantify.

Dark money is so much bigger and more expansive than what we were even able to track.

And this was my analysis with the Brennan Center included looking at traditional dark money spending.

So this is spending that's disclosed to the Federal Election Commission that regulates campaign finances.

But because dark money groups are required to disclose that spending and sometimes get scrutiny, pushing them to disclose their donors when they report that spending, they've increasingly started to rely on various other tactics.

One of those is issue advocacy ads.

So these would be ads that don't explicitly say vote for or vote against a candidate, but paint them in a very favorable or disfavorably light.

So attacking them or saying how amazing they are or terrible.

Because these different advertisements avoid those certain magic words that were set up by the Supreme Court case in Buckley v. Valeo, not to get too in the weeds with that, but because they avoid certain words, they can spend unlimited sums without disclosing that to the Federal Election Commission, unless it is a traditional media like TV or radio and only during a short window of a few weeks before election day.

If they're spending online, they can spend unlimited sums not just disclosing their donors, but even ever disclosing their spending, mentioning candidates, boosting them or attacking them as long as they avoid those words.

We're also seeing money routed through what are called super PACs, which are a type of political committee that can raise and spend unlimited sums so long as it discloses its donors to the Federal Election Commission.

But due to the ways the laws are structured, a super PAC could just take money from a 501(c)(4) nonprofit that does not disclose its donors, which is kind of gets around the intents of the law by, even though it is disclosing its donor by the books, the ultimate funder is still hidden.

- So who receives this money?

Is this elections at the federal, state, regional, city, municipality level?

Or talk about that.

- We've really seen dark money trickle down to all levels of government at this point.

The biggest concentration that we've been able to track is at the federal level where we're seeing big money across the board pouring into presidential elections, congressional elections, but we're also seeing it in gubernatorial elections, in state legislature elections, and even down to city council in varying places or school board elections.

And so it's really something that has continued to grow at a very rapid pace in recent years.

- So this is money that goes to politicians or people to be elected from any party, is that correct?

This isn't just confined to the left or the right or in the middle.

Do I have that correct?

- That is correct.

Both parties have benefited from dark money substantially.

Traditionally, right after the Supreme Court's Citizens United case, we saw conservatives benefiting more and really embracing the concept more.

But in recent years, starting right around the 2018 midterm elections, we started to see liberal or democratic candidates benefiting more.

And that is a trend that's continued in all of the most recent election cycles.

So that includes 2020, 2022, and 2024, where we're seeing Democrats who are much more prone to decry dark money to say that they are pushing for disclosure, actually benefiting more at this point.

- [G.] Wow.

- I have so many questions I wanna ask right now.

- [G.] No kidding.

- Lemme start with this one and I think you touched on this already, but if dark money is dark, if in other words, it's opaque in terms of what we know about the origins of that money, how are you able to quantify that $1.9 billion number?

- That's a great question.

So looking at least at the Federal Election Commission filings, we're able to piece together tens of millions.

Those are disclosed to the FEC because they are either explicitly saying, vote for, vote against a candidate or the equivalent, or they issue ads during that window that are on traditional media.

But the other piece is we rely on sources like AdImpact to find TV advertisements that might not be disclosed to the FEC.

You can also look through Federal Communications Commission filings.

So they're very complex and require a lot of time to analyze.

And so we relied on AdImpact for the purpose of this specific study, as well as Kantar data in partnership with the Wesleyan Media project.

For online advertisements, there's no one-stop shop in the way there is for TV and radio.

And so with online advertisements, you have to go to different social media platforms or online ad platforms that have voluntarily disclosed information about their political ads.

One of the biggest limitations to this is not all online ad platforms have actually created these databases and made them publicly accessible.

And so we're effectively relying on the companies to put all this information out there and maintain it.

But in this case, we looked to Meta, which has Facebook and Instagram, we looked to Alphabet Inc, so Google and YouTube, as well as Snapchat and X, previously Twitter.

But one of the other issues with these databases is there is some volatility.

For example, Meta recently announced they are not gonna be keeping all of the inactive Facebook ads anymore.

And so if you're trying to get a comprehensive picture, it requires regularly checking this information, downloading internal copies of the data in many cases, and is not the easiest thing to piece together.

The average American would likely not want to go through all of this work to better understand that spending.

- So Anna, you said that, so 1.9 billion that you were able to identify, out of, I think it's, I looked this up last night, about 15.9 billion overall in federal spending, you know, both dark and, I guess, light funding, how does that compare historically?

Are we seeing more and more money going into into dark money?

And what accounts for that, those growing numbers?

- We are really seeing more money flowing into the U.S. political system overall.

So going into super PACs from disclosed donors like whether that be Elon Musk or the George Soros' of the world, which can sometimes be routed through 501(c)(4)s as well.

But we're seeing more money overall.

Elections are becoming more expensive, more contentious, and they're lasting much longer.

We're already starting to see money for the next big federal election pouring into different races, candidates making announcements, which has driven up the cost overall.

One note about that number is that that only includes FEC-reported spending.

So the 14 billion number only includes a small sliver of overall dark money spending.

It's less than 100 million in this case, which again, not chump change, but in the grand scheme of billions and billions of dollars is only a sliver.

Whereas when we look to the TV archives and ad archives and contributions, that's not encapsulated in that number.

So it is actually much bigger by the nature of the fact that we can't track everything.

- Do you even have a ballpark sense of how big that number actually is?

- No, it's very hard to tell.

This is the most we've been able to track.

Just looking at this year versus, for example, the last presidential cycle in 2020, in 2020, we were able to track just over 1 billion.

It's now up to over 1.8 billion.

And so that's a huge increase just between one presidential cycle and the next.

But during that time, we also saw new online ad platforms pop up.

We saw Twitter become X, we saw an increased reliance on Snapchat.

So just with the online ad platforms we know about and we know that have provided this information, we're seeing an increase, but there's so many others that just don't make the information available.

So many chat messengers and everything.

Also even within the platforms that make the information available, we don't know what might be missing, what could have been removed, in particular with platforms like X that have less than reliable histories with the information they're making available.

- So Anna, do you have any sense of the average voter?

Does that average voter know about dark money, care about dark money, and should they care about dark money?

Three questions for the price of one.

(chuckles) (Jim chuckling) - I certainly think they should care.

I think that every American should care about this.

It's so important.

And dark money really is targeting people in ways that I don't think they're always aware of, in particular with the rise of online media and ads that can be disguised to look like news articles or be very engaging and tailored very specifically and micro-targeted to the interest of the person that is seeing that ad.

They might not even know they are consuming information that is designed to persuade them in a certain way and color their views.

- How is any of this legal?

- That's a great question.

Over the years, we've seen the government try to better regulate dark money through varying methods.

The Federal Election Commission, when it had a quorum, trying to enforce to some extent, but there's just so much of it and it's evolving so quickly.

And the Federal Election Commission in particular has lacked resources and the design does not always lend itself to enforcement.

So over the years, that has been one of the impediments.

As well as within Congress, there isn't always an incentive for members of Congress to actually address this in a meaningful way.

There have been proposals to attack dark money, but oftentimes, don't go anywhere, don't attract enough support from either side of the aisle to really address it.

And one of the big issues says even if we do end up passing certain pieces of legislation, dark money continues to evolve.

What is happening today and effective today might not be in a few months.

- I'm wondering too though, you mentioned that both Democrats and Republicans are benefiting greatly from the contributions into these dark money groups, do they have any incentive to try to regulate and to shine some light into these spaces?

- In some cases it can be a public opinion issue where voters are not exactly the biggest fans of money coming in from anonymous sources of dark money.

The fact that it could allow foreign money in that is entirely undetected.

So I think one of the biggest incentives for politicians to at least take public stances against dark money is to appease the voters that they're supposed to be representing.

But there's also the fact that they're benefiting from it.

And because these 501(c)(4) nonprofits or other types of dark money groups that are spending in support of a politician are technically independent of them, the politician could say, I hate dark money, all I want.

And the group could continue spending and they continue benefiting.

- So you mentioned foreign money, and that was actually gonna be my next question.

Is there foreign money coming into American politics?

One.

This is gonna be two questions for the price of one.

And number two, do you have any idea where it is coming from, the sources of this foreign money?

- We know that there is at least some foreign money flowing into U.S. elections, whether that be primarily through different legal cases that have identified shell companies.

So primarily LLCs that exist for no other purpose other than funneling money into elections.

There have been some high-profile cases in recent years.

For example, Lev Parnas and Igor Fruman during the 2016 cycle, as well as various other efforts that have been identified by the Justice Department.

You also see foreign lobbyists that work for different foreign governments pouring money into elections, which is perfectly legal.

But the full extent of foreign money going into U.S. elections isn't known because there's so many different avenues through which that money can be effectively laundered that are entirely undetectable.

There's so much spending by these 501(c)(4) nonprofits that can take unlimited foreign money and can also spend unlimited sums on election or give unlimited sums to super PACs.

And even if they do both of those things, they could say they take foreign money for one purpose and give the different set of money internally to those super PACs.

But even if that's the case, the money that they are getting from that group is freeing up other funds that they're using for politics.

And so it's a very complicated issue.

- So you talk about how dark money and how it's given and distributed and received continues to evolve, and obviously, that's quite true.

That makes it sound almost hopeless in terms of ever changing it.

Is that too pessimistic of a perspective here?

- I don't think it's entirely hopeless.

I think that one of the ways that we can at least take away some of the power of dark money spending is through educating people and providing information to the average American as well as to educators and journalists to spread the word for people to be more conscientious as they are consuming, especially online media or media generally, to go in with a healthy level of skepticism about whether that piece of media is trying to persuade them, that it might have a bigger agenda rather than just reading something and assuming it is entirely unbiased fact.

And so I think that media literacy is one way that we can really take away some of that power.

- Yeah, Anna, we discuss a lot of topics on this show, which are a little bit disheartening.

I think that's safe to say.

- [G.] Yep.

- What does this set of issues, what does the prevalence of dark money in American politics mean for the health of American democracy?

- Dark money influences so many aspects of American democracy.

It can impact different industries, different issues and policies, as well as, at the core of it, who is going to represent the average American in Congress and make the choices that really impact their lives, sometimes on a daily basis.

But because it's once removed, I think a lot of people don't necessarily think about the huge impact that this spending can have in a very secretive way where we don't even know who may be benefiting from this or how they may be benefiting a certain politician.

And so being able to have this information out there is really important to arm the average American with the information they need to vote in an informed way as well as just to more responsibly consume media so that they understand the full reasoning and agenda behind it.

- So in that report from the Brennan Center, you had said that digital ads or online spending are, and I'm quoting you here, "another form of dark money spending."

Would you explain what that means?

- Sure.

So not all online ads are dark money.

There are many super PACs that spend on online advertisements as well as individuals where their identity is disclosed, their funding sources are disclosed, but it is one other avenue through which dark money groups are reaching people.

They could go on, for example, Facebook or X and spend money on advertisements saying that a candidate is great or terrible or spending money on a specific issue in order to get a person to contact their representative and kinda framing that around those certain issues, but without ever disclosing who is behind them.

In some cases, there is a paid for by, so on the different platforms that provide those archives of political ads, they do provide a disclaimer, but in some cases that might be a trade name or legal alias adopted by a 501(c)(4) nonprofit.

It might not even be the actual name of the nonprofit.

And they are able to adopt as many legal aliases as they want.

There's one example from the 2024 election cycle.

One of the bigger spenders was building America's future that during that cycle adopted the moniker Progress 2028, and Progress 2028 spent on a number of online ads that made it look like they were pro Harris, but in actuality highlighted things that were more likely to divide per target voters to talk to highlight issues that could be construed as negative and chip off away at the Democratic party.

They also have several other identities.

And so by doing that, people might not know, oh, this group that appears to be progressive or liberal is actually just an alias adopted by a conservative group that is funded and has ties to Elon Musk.

And so there's a lot of different ways that these groups can be increasingly opaque.

There's also the issue of influencers online, that is even harder to track where groups could not necessarily pay influencers to endorse them, but give them money to make a video and give them free reign over what to say, But heavily incentivize these influencers who many, especially the next generation, rely on for their information, that they've established a brand and trust and would be more susceptible to receiving information about a candidate, whether it's positive or negative, than from a campaign or super PAC that they might be more leery of.

- So you mentioned the importance of media literacy and we couldn't agree more.

We talk about that frequently on this show.

Should media literacy be taught in schools?

- I'm not sure where the appropriate forum is for that.

There are different organizations that have looked into that more and looked into what is most effective.

So I would certainly defer to them on that, but I do think media literacy is something that needs to be taught early on.

As children are consuming information, as ads even target children in many cases, I know people whose children have seen political ads after children's videos.

And so these things do not discriminate.

They find ways to get around that, even though if they're not technically supposed to target children.

It starts young and it's a much larger influence machine.

It's not just necessarily targeting voters, it's targeting the larger infrastructure to change on issues.

And so I think that it's really important just early on to understand what to look for, so that when you do start getting targeted, when you do start voting and getting out there, that you are ready to understand what information you're consuming, absolutely.

- So if I donate, if Wayne donates, if you donate to a particular candidate $100, that's gonna be reported to the Federal Elections Commission, and then anybody can go to the FEC website and look up our donation history.

Why don't the same set of rules apply to the folks funding dark money groups?

- Well, dark money groups are distinct from campaign committees that are officially affiliated with a candidate or even from political committees or super PACs or parties because those groups register and say they are explicitly political, they exist to spend on elections.

Whereas 501(c)(4) nonprofits, which is one of the main types of dark money groups along with shell companies, the 501(c)(4) nonprofits are supposed to exist for social welfare purposes.

That is why they have a certain tax exempt status.

They file annual tax returns with the IRS rather than with the Federal Election Commission.

And because they are technically supposed to exist for social welfare purposes, which can be a very broad and encompassing and fluid term, they are not held to the same standards as political committees, though there have been some instances where the Federal Election Commission has found that 501(c)(4)s acted as political committees and required them to disclose their donors.

Those are few and far between and generally happen many years after the activities took place and oftentimes even after a group has already shut down.

- Wow.

So you've talked about Instagram and Facebook, X, formerly known as Twitter, TikTok and other online platforms.

Don't they have a responsibility here?

I mean, they're major players in getting dark money from people?

- Well, at least Meta and Google and Snapchat and X, to some extent, have made information about their ads available.

Where I think some of the biggest concern is, is around the many online ad platforms that aren't even disclosing what information is going out there.

For example, TikTok says they don't have political ads or did for a while and doesn't have any type of archive of that, but you can see them on there.

You can see them on different websites that are news media websites.

You can see them in Telegram, for instance, and different messengers.

And so there's so many different ways that we don't even know the full extent of the ads.

So at least having that disclosure puts us a step in the right direction.

It's also a very tough issue with the line between informing people, getting the information out there and helping them to responsibly consume media and censorship.

And so making sure that they're striking the right balance and not restricting speech is another issue that has to be considered.

- Hey, Anna, we've got about a minute left here.

I know that as an investigative journalist, you know that historically, data that has been maintained by the U.S. government has been the gold standard for reliability and transparency.

A few months ago you wrote an op-ed for "The Hill" newspaper where you raised the alarm about the Trump administration, basically reducing access, eliminating those repositories of U.S. government data.

Where does that story stand now and how important is that for the kind of work that you do?

- It is extremely important.

We are seeing just an unprecedented removal of information from government websites and government data, and it is something where we don't know where it will strike next.

And so it's incumbent upon journalists to really be prepared for that, and has continued to disappear.

And so I think that we really need to be prepared.

We need to be mindful of that and be ready for when additional datasets start disappearing.

It's not limited to the Trump administration, but certainly has increased and proliferated in a way that is unprecedented.

- What do administrations gain though, by restricting access to that data?

- In some cases it could be that they want to not have the opinions or agendas of prior presidencies.

It could be a part of their full agenda, but it really takes away information from the American people.

- Well, Anna, that is a hugely important set of issues and the work you do is important.

Thank you so much for spending some time with us this week.

That is all the time we have.

But if you wanna know more about the show, you can find us on social media or visit salve.edu/pell-center where you can always catch up on previous episodes.

For G. Wayne Miller, I'm Jim Ludes, asking to join us again next time for more "Story in the Public Square."

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