Feb 5, 2021 - Politics & Policy

Late "dark money" flooded key Senate races

Illustration of a hand pulling back a red curtain to reveal a darkly lit U.S. quarter dollar
Illustration: Annelise Capossela/Axios

Significant chunks of money spent in key 2020 Senate races — including Kelly Loeffler's in Georgia — came from nonprofits and companies with little online footprint and no trace of their own financial benefactors, new disclosure filings show.

Why it matters: The 2020 cycle was the most expensive in the nation's history, by far, and an unprecedented amount of spending came from groups that don't disclose their donors. The Biden administration is under pressure to step up enforcement against such groups, and these new financials will only increase that.

What's new: Federal Election Commission filings submitted Thursday show that two obscure corporate donors gave hundreds of thousands of dollars to a group trying to reelect Loeffler, the former appointed Republican senator.

  • A company called Custom Management Services Inc. donated $160,000 to Georgia United Victory, a super PAC that backed Loeffler. The company's only listed address is a Sioux Falls, South Dakota, law firm, but corporate records indicate it's run by First Financial bank executive Al Heygi.
  • The nonprofit American Exceptionalism Institute, which does not disclose its donors, gave $200,000 to Georgia United Victory. It also donated $2.5 million to a super PAC backing Sen. Lindsey Graham (R-S.C.), and a Nevada PAC supporting state-level Republicans.
  • The more than $3.7 million that AEI gave to those three groups from July to October dwarfed its total budget during its prior fiscal year, when it reported raising less than $25,000.
  • Who provided the millions last year is unknowable because AEI and others are considered "social welfare" groups that are not explicitly political, so they don't face the same disclosure requirements.
  • Another such group, Florida Promise Inc., listed its address as a Tampa post office box. It gave $1 million in December to the Senate Leadership Fund, a super PAC aligned with Senate Republican leader Mitch McConnell. It appears to be the group's first-ever federal political contribution.

The big picture: According to the Center for Responsive Politics, "dark money" groups had as of late in the cycle poured more than $750 million into 2020 elections.

  • "Reining in dark money is essential to integrity in government and to a government responsive to the people, not special interests," wrote Sens. Sheldon Whitehouse (D-R.I.) and Elizabeth Warren (D-Mass.) in a letter to Treasury Secretary Janet Yellen on Wednesday.
  • Warren and Whitehouse urged Yellen to step up enforcement against nonprofits used to channel money into political organizations in ways designed to mask the true sources of the funds.

The phenomenon is not confined to Republican groups.

  • Biden himself enjoyed record support from high-dollar groups that shielded donor information from the public.
  • Democrats in general benefited from a spike in dark money backing during the 2020 cycle.

The bottom line: Democrats have railed against dark money for years. But each filing that shows more undisclosed cash in the system is another talking point in their favor now that they control the levers of power in Washington.

Editor's note: this story has been updated to note Heygi's ties to Custom Management Services.

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