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'The Real Issue With Dark Money: We Don’t Know Who’s Influencing Policy' Jim Naureckas ([link removed])


Janine Jackson interviewed the Lever's Andrew Perez about a massive dark money donation for the August 26, 2022, episode ([link removed]) of CounterSpin. This is a lightly edited transcript.

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Election Focus 2022 Janine Jackson: Many US citizens, while knowledgeable, skeptical, even cynical, still work from a base understanding of how politics and policy work, which is that people—numbers of human people—want and call for things, and elected officials navigate those needs, while encountering and engaging the better-resourced desires of corporations and other power players.

Some, of course, are more or less in the pocket of particular private interests, but if they weren't interested in the public, they wouldn't be in public office.

Well, even if you chuckle to hear that, it's still the basic working premise of how politics are understood to work. You vote for people to represent your interests, and you expect, or hope, or just throw a rock at the idea that politicians will care about people in the main, and not just money.

Whatever its relation to reality, that's the template that news media use to explain politics to us: Republican or Democratic voters wanted this or that. You can fight about it, but the understanding we're given is that we’re in a fight on a playing field where whoever has the most popular support, even if it's based on misinformation, will win.

News media worth their salt would make it their business to interrupt that understanding, and tell us how power and politics actually break down. And they have an opportunity right now with the news of the largest donation—as far as we know—to a political advocacy group ever, from a secretive Chicago billionaire to a new political group led by conservative activist Leonard Leo.

You don't have to know about machinations to have them matter. So here to talk about all of this is Andrew Perez. Andrew Perez covers money and influence as senior editor and reporter at the Lever ([link removed]) news. He joins us now by phone from Maine. Welcome back to CounterSpin, Andrew Perez.

Andrew Perez: Absolutely. Thanks for having me.

JJ: I guess just bring us up to speed on the reality. What do we know about this donation, from whom to whom? And $1.6 billion? What actually just happened?
The Lever: Inside The Right’s Historic Billion-Dollar Dark Money Transfer

Lever (8/22/22 ([link removed]) )

AP: Sure. So what we've reported ([link removed]) at the Lever, in partnership with ProPublica, is a look at how Barre Seid, a little-known businessman in Chicago, managed to donate $1.6 billion to a nonprofit run by Leonard Leo, who's the conservative operative and anti-abortion activist who played a major role in building the conservative supermajority on the Supreme Court that recently overturned Roe v. Wade and invalidated federal protections for abortion rights.

And what we know is that Seid put his electronics company into a nonprofit, which is called the Marble Freedom Trust, which then sold the company. The end result was a donation of $1.6 billion to the group. The transaction was structured to allow Seid to avoid potentially hundreds of millions in taxes, we believe, for up to $400 million in taxes, and it kept him from experiencing a big tax hit, and it preserved, then, the larger amount of money available for Leo's dark money operation.

And we believe that this is the largest donation in US history to a politically oriented 501(c)(4) dark money group.

JJ: Can you just explain, for a second, what "dark money" means exactly, and what it means in terms of democracy?

AP: Yeah. So thanks to the Citizens United decision ([link removed]) , nonprofits are allowed to engage in politics, specifically 501(c)(4) social welfare organizations. And these organizations, their primary purpose cannot be on politics, but they can spend up to 49% of their expenses on politics, and they can then fund issue advocacy stuff, and really work to build, in this case, the conservative movement.

These have become a really favored route for really wealthy people to affect the political debate, because these groups do not have to disclose their donors, and they can accept donations of any size.

So they've really been supercharged in the last decade, and become a favored vehicle for the ultra-wealthy to influence politics.
NYT: An Unusual $1.6 Billion Donation Bolsters Conservatives

New York Times (8/22/22 ([link removed]) )

JJ: I was a little taken aback by seeing the term “kingmaker'' in a New York Times story ([link removed]) about Leonard Leo, and it seems very cynical to just matter-of-factly toss off the idea that there's a "kingmaker" who gets to decide whether or not people have the right to reproductive rights because he has a lot of money.

It just seems weird to hear that just tossed off as, “Oh, hey, yeah. That's what's happening,” from a press corps, you know, that's supposed to be defending democracy.

AP: Yeah. I guess I get it, right, like if you have a $1.6 billion pile of cash at your disposal, you can do a lot with it, right? Like, you could probably parcel out tens of millions of dollars every year and just watch the actual overall pile of money grow.

It does make him one of the most powerful people in politics, and, truthfully, he already was one of the most powerful people in politics. Leonard Leo has played a key role in selecting five of the six conservative justices on the Supreme Court, and he's buddies with the other guy, with the only one who he didn't help in this kind of professional capacity: He's really tight with Clarence Thomas.

So in the Trump era, he served as Trump's judicial advisor, helping select Amy Coney Barrett, Brett Kavanaugh and Neil Gorsuch, and helping install them on the court. So while he was selecting these judges, helping Trump select these judges, he was also leading this dark money network that was helping run their confirmation campaigns, supporting them with advertisements and media campaigns, and also funding a lot of other conservative groups that supported their nominations as well.

So he is a very powerful figure, but I do also understand the point you're making, which is that it does sound a little crass.

JJ: And it sounds like what journalists—it's not a thing that we could know. It's not a thing that we could understand about how things work. And it's exactly the type of thing that we would look for reporters to explain to us, to say, you think you're just voting, and that's a direct connection to the kind of policy and politics that you're going to get, but actually there's this behind-the-scenes machinations going on.

And I'm not saying they don't ever cover it. I just feel that most people, even smart people, would not understand how much power these folks have behind the scenes, and how indirect, therefore, your connection of, “Hey, I'm putting down my vote,” how much obstruction that's going to meet.
Andrew Perez

Andrew Perez: "There's just very, very little transparency in this world. And they found ways to make this transaction in the group even darker."

AP: Yeah. That's the real issue here with dark money, is we don't know who's influencing policy, really. We have very little information about how these groups are spending in real time. It's not like they have to report, “We spent this much on judicial confirmations.” Like, they just don't have to report that at all.

You learn a little bit about it after the fact, like a year or two after the fact, but you, generally speaking, don't know who's financing these organizations whatsoever.

That's where both the New York Times reporting ([link removed]) , and our reporting ([link removed]) at the Lever and ProPublica, that's where we've been able to shine a light on one of the biggest-known, probably the biggest-known dark money transaction like this ever. When you learn the details about it, it should definitely raise all kinds of alarm bells.

So as far as the public knows, this group has never existed. It is organized as a trust. That's not something that you can look up in state corporate filings. It never registered with state charity regulators. It never showed up in any kind of securities documents. So we're learning about this group that was formed in April 2020, that saw all of this giant windfall in March 2021, a year and a half ago.

Again, the whole real-time issue, we don't know what it's really spending on right now at all. There's just very, very little transparency in this world. And they found ways to make this transaction in the group even darker than what we characteristically see.

JJ: And then finally, I know that you've been doing press on this, and I'm not asking you to call anybody out at all, but I just would ask you, are there questions that you wish you would be asked by journalists? Are there questions that you wish journalists would stop asking you? What would you like to see news media do in terms of pursuing this story?
Guardian: Billions in ‘dark money’ is influencing US politics. We need disclosure laws

Guardian (8/29/22 ([link removed]) )

AP: Yeah, so there's a few things, like part of the reason they were able to really supercharge this donation and avoid the tax bill was because in 2015, as part of this routine tax extenders bill in Congress, they passed legislation that said that there is no gift tax when you give to a 501(c)(4) group.

Like, there's a gift tax if you donate to a political organization. There's a question of why that was able to happen with very little controversy or fanfare or notice at all. But I think we've seen some coverage around this, but I guess I question whether there's going to really be sustained coverage about this donation, or about how this is allowed to happen, and then how we're allowing this kind of influence on our political system.

So Democrats have pitched, periodically, legislation called the DISCLOSE Act ([link removed]) that would compel disclosure of donors to dark money groups that engage in politics, and also spend on judicial advocacy campaigns. And all of the coverage around that legislation has been treated as like, you know, Republicans are opposing this, and it's a "he said, she said," without any kind of context, without really contextualizing for people what this is, what the byproduct is of a system in which wealthy people can drop tens of millions of dollars, or in this case, $1.6 billion, into a dark money group that can function indefinitely, can really distort the political system and policy outcomes with just a giant pile of money.

JJ: Exactly.

We've been speaking with Andrew Perez. He's from the Lever. They're online at LeverNews.com ([link removed]) . Andrew Perez, thank you so much for joining us this week on CounterSpin.

AP: So happy to be here.


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