Where has all the dark money gone?

A recent story by Ally Mutnick caught my eye. In the run up to the 2024 Senate elections, Republicans are looking for uber rich guys who can self-fund their campaigns. No one is going to be surprised that multi-millionaires are often aligned with GOP politics. But the National Republican Senate Committee (NRSC) is actively recruiting these guys for a reason.

Both parties have relied on self-funders before. But this approach has taken on increasing importance for Republicans because they failed to counter Democrats’ massive grassroots fundraising in Senate races during the past two cycles. In 2022 alone, Democratic nominees outraised Republicans by $288 million in the six closest Senate races.

This is a story I've been following for years now. While we have all heard about how the Supreme Court's 2010 Citizens United decision allowed unlimited dark money into our politics, not many of us noticed a huge development that happened in 2004.

Operating from an office just off Harvard Square, Matt DeBergalis and Ben Rahn, through the Web site they created, ActBlue.com, have raised $32 million since it was started in 2004. They are gearing up to make good on their promise that it will raise $100 million for Democrats in this election cycle [2008].

In many ways, ActBlue has turned fund-raising on its head by exploiting the power of the Internet and small donors that was pioneered by Howard Dean and bringing it to the next generation of grass-roots supporters and online donors.

Where big-dollar fund-raising is typically done behind closed doors with well-connected bundlers and showy, costly fund-raisers, ActBlue is just the opposite. It is an Internet-based political action committee that lets Democratic candidates use their Web site as a portal to collect donations, making fund-raising cheap, and, for donors, as simple as a click of a mouse.

While ActBlue was in the initial stages of transforming the way Democratic campaigns were fundraising, Republicans placed their bets on conservative billionaires pouring millions of dollars of dark money into super PACs. In 2012, the first election after the Citizens United decision, they were successful in raising lots of money. But there was one problem with that:

A study Wednesday by the Sunlight Foundation, which tracks political spending, concluded that Rove’s super PAC, American Crossroads, had a success rate of just 1 percent on $103 million in attack ads — one of the lowest “returns on investment” (ROIs) of any outside spending group in this year’s elections…

The American Crossroads debacle was only the most dramatic example of the limits of big money in this election, according to the Sunlight Foundation report. About $1.3 billion was spent by outside groups overall — about two-thirds on the Republican side — and for the most part their returns were equally low.

During the 2016 Republican primary, Jeb Bush was the choice for rich guys. He hauled in $120 million from outside groups. But all of that money didn't help much. Jeb bowed out after the South Carolina primary.

To understand what's happening with all of this it is important to know that individuals can give small dollar donations directly to a candidate running for office. Campaigns can use that money in any way they chose, including staff, advertising, travel expenses, GOTV efforts, etc. 

On the other hand, Super PACs can't give directly to a candidate, nor are they allowed to coordinate their efforts with a campaign. So they are pretty much limited to spending their money on video ads and direct-mail campaigns. Super PACs also have to pay a much higher price for television ads. In the days of cord-cutting - especially among younger voters - those ads are reaching a smaller audience every year.

Over the last decade, we've seen stories like this during every election cycle:

Politico reported last week that House Minority Leader Kevin McCarthy told his GOP colleagues that Democrats "are kicking our ass" in fundraising, and our data shows just how right he was. The Democrats who flipped GOP-held House seats in 2018 are continuing to raise money at a pace that would have been unthinkable just a few years ago, while Democratic challengers are also hauling in massive amounts.

By 2019, Republicans noticed how badly they were being hurt by this disadvantage with grassroots fundraising, so they started their own version of ActBlue that they named WinRed. Would it be a surprise to learn that their efforts are failing due to greed and fraud? Probably not. 

So now Republicans have decided to look for uber-wealthy candidates who can self-finance their own campaigns. Isn't that special?

Where is all of the dark money going these days? A lot of it shifted from political campaigns to shaping the courts - as we've seen with exposes on Leonard Leo. Now that he and his Federalist Society buddies have bought an extremist majority on the Supreme Court, here's what comes next:

Flush with money after receiving the largest-known political advocacy donation in U.S. history, conservative activist Leonard Leo and his associates are spending millions of dollars to influence some of the Supreme Court’s most consequential recent cases, newly released tax documents obtained by ProPublica and The Lever show.

The documents detail how Leo, who helped build the Supreme Court’s conservative majority as an adviser to President Donald Trump, has used a sprawling network of opaque nonprofits to fund groups advocating for ending affirmative action, rolling back anti-discrimination protections and allowing state legislatures unreviewable oversight of federal elections.

In other words, they bought a Supreme Court majority - now it's time to use it. 

As ProPublica documented, Leo is also funding a private and confidential conservative group - Teneo - whose goal is to "crush liberal dominance" in a country plagued by “woke-ism” in corporations and education, “one-sided journalism” and “entertainment that’s really corrupting our youth.” That is basically the agenda of the National Conservatives, which isn't surprising given that some of the people involved with Teneo include J.D. Vance, Peter Thiel, Josh Hawley, and Ben Shapiro. 

In the end, what we have is one party that is kicking a** by raising small dollar donations from the grassroots while the other party depends on self-funded multi-millionaire candidates while astro-turfing a culture war against wokeism.