Pro-Trump group accused of illicitly shielding donors
A legal complaint against a prominent pro-Trump group will test new standards for so-called dark money groups that have the potential to reshape the nation's campaign finance landscape.
Why it matters: The groups, politically active nonprofits, funneled more than $1 billion in untraceable cash into the 2020 elections. A landmark 2018 court ruling triggered new donor disclosure requirements, but few groups have modified their behavior.
What's new: A complaint filed Tuesday with the Federal Election Commission could force the issue. It was lodged by Citizens for Responsibility and Ethics in Washington, a left-leaning ethics watchdog group.
- It accuses Turning Point Action, the activist arm of pro-Trump youth group Turning Point USA, of illegally concealing the donors behind canvassing campaigns in last year's presidential election and January's Senate contests in Georgia.
- "Turning Point Action strongly disputes the mischaracterizations made by CREW," a spokesperson told Axios in an email.
- The group "is focused largely on our social welfare mission," the spokesperson added, and "takes all political activity with utmost seriousness and has invested significant time, attention and top professional personnel into ensuring we are in compliance with all FEC guidance."
The backstory: Turning Point raised seven-figure sums last year with explicit pleas to support its pro-Trump political efforts.
- “We need your support to beat (Joe) Biden and Kamala Harris. Your contribution will helps (sic) us immensely expand our grassroots efforts,” read a typical fundraising request from the group.
- Its fundraising page was clear about the political nature of the activities it was asking donors to finance. Its donations, a disclaimer on the page said, "will be used in connection with federal elections.”
Between the lines: That language raises some thorny legal issues for the group. Following federal court rulings in 2018 and 2020, nonprofits are required to disclose the identities of donors who give at least $200 to support political activities.
- Federal law requires that anyone spending more than $250 on independent expenditures — or paid communications advocating for the election or defeat of a federal political candidate — identify donors who financed their political activity.
- The FEC had interpreted that language to mean that donors only needed to be disclosed if they had financed a specific, identified expenditure, as opposed to political expenditures in general.
- CREW sued the FEC in 2016, challenging that interpretation. In 2018, a federal court sided with CREW, ruling the law requires disclosure of donors who financed nonprofit politicking generally — not just a specific ad or other expenditure.
- The FEC followed up with guidance of its own. As of October 2018, nonprofits must disclose donors who support efforts to sway federal elections, including donations "for the purpose of furthering any independent expenditure."
The big picture: That updated guidance hasn't changed much on the ground. Donor disclosure to politically active nonprofits remains sparse, as the groups continue to insist their donors weren't chipping in to support political activity explicitly.
- The notoriously deadlocked FEC has made enforcement action on such a politically contentious issue unlikely, so there's not much of an incentive to modify behavior.
- The ballooning amounts of so-called dark money in the American political system make legal standards for disclosure particularly salient.
- According to the Center for Responsive Politics, dark money spending in the 2020 cycle exceeded $1 billion for the first time — and heavily favored Biden and Democrats.
The bottom line: CREW's complaint against Turning Point has the potential to break the enforcement logjam and provide more clarity about what is and is not required of politically active nonprofits.
- The explicit language of Turning Point's fundraising appeals makes it far more difficult for the group to claim its donors weren't chipping in to support "any" political spending.
- The FEC sent the group a letter last month, prodding it to disclose contributors by March 16.
- The deadline came and went without a reply. But the Turning Point Action spokesperson said it didn't initially receive the letter and is in touch with the FEC about extending that deadline.