Michigan GOP moves to protect its dark money campaign donors

Dec 13, 2018 at 11:02 am
Michigan GOP moves to protect its dark money campaign donors

Michigan Republicans are pushing a bill that would bar the state from requiring nonprofits to disclose their dark money contributors.

While Michigan law currently doesn't require nonprofits to disclose such donors, Democrats — including incoming secretary of state Jocelyn Benson, who as of now would oversee campaign finance — have vowed to place new limits on dark money and increase campaign finance transparency.

But the Republican-backed SB 1176 would make it illegal for state agencies, the secretary of state, or the attorney general to require nonprofits to identify dark money donors. The state Senate recently approved the bill, and it's next headed to the state House.

Nonprofits are used in several ways in Michigan politics, says Craig Mauger, director of the Michigan Campaign Finance Network, a nonprofit that tracks state politician's campaign contributions. However, their goal is the same: "It's essentially unaccountable money raised from corporations," Mauger says, adding that there appears to be more of this type of political fundraising in Michigan because the state's dark money laws are already so loose.

One example is the Detroiters For Change nonprofit, which was created earlier this year and funneled money from unknown corporations to candidates linked to Detroit Mayor Mike Duggan. Some suspect the nonprofit is funded by the auto insurance industry because it backed candidates who supported Duggan's auto insurance plan, but it's impossible to know for certain. Regardless, the nonprofit is under investigation for campaign finance violations.

Politicians also often establish their own nonprofit that's used to raise money to support their political agenda, but not to fund their own campaign. For instance, Gov. Rick Snyder's NERD Fund and the ironically named Making Michigan Accountable nonprofit raised as much as $2.24 million in dark money annually.

The nonprofits that trade in political campaign contributions are also those that are responsible for the most vile attack ads during campaign season, Mauger says. The proposed law would help preserve their place in the state's campaign season.

The law also makes it more difficult for the attorney general to police fraudulent 501c3 charities that bilk Michigan residents. Currently, a charity's board members and its donors are open to the Attorney General's Office. The bill would require the attorney general to have a court-ordered warrant, or a civil subpoena, after demonstrating a "compelling need" for the information.

The law lumps in political nonprofits with charitable nonprofits, which are 501c4s and 501c3s, respectively. Mauger says "it's troubling" to see lawmakers using "charitable organizations as a shield for individuals and businesses who are trying to influence politics and voters anonymously."

The new law also bars local governments from making rules requiring transparency around nonprofit donations.

"This is a tremendously bad bill — it's one of the worse bills I've seen in my time around government," Mauger says. "It's a loss for people who want to know who is trying to influence their vote."

The change is tangentially related to to separate legislation stripping the Secretary Of State-elect Benson of her authority over campaign finance. If that bill is ultimately approved and survives a likely legal challenge, a commission of three Republicans and three Democrats would enforce campaign finance laws. Any new limits on campaign contributions would require the approval of a majority of the commission. There are very few Republicans who would support new campaign contribution limits, therefore the GOP is intentionally building into the commission a permanent gridlock.

Put another way, that proposed law is also a Republican attempt to protect the party's dark money contributors.

Stay on top of Detroit news and views. Sign up for our weekly issue newsletter delivered each Wednesday.