Dark Money
Political spending that cannot be traced to its source — and the legal infrastructure that makes untraceable spending possible.
The short version
- Dark money refers to political spending by nonprofit organizations that are not required to disclose their donors — meaning the public never learns who is actually funding the message.
- 501(c)(4) 'social welfare' organizations and 501(c)(6) trade associations can spend on elections without donor disclosure, as long as political activity isn't their stated 'primary purpose' — a standard weakly enforced.
- Dark money exceeded $1 billion in the 2020 federal election cycle, and has been used by donors on both sides — though conservative networks pioneered the modern architecture.
- The same system that funded attack ads has also funded the campaign to reshape the federal judiciary — including the confirmation campaigns for multiple Supreme Court justices.
What it is
Dark money is political spending that cannot be traced to its original source. The term distinguishes this category from the spending that Super PACs do — Super PACs disclose their donors to the FEC, even if the names disclosed are themselves shell organizations. Dark money flows through a different set of tax-exempt entities: 501(c)(4) social welfare organizations and 501(c)(6) trade associations. Under IRS rules, these organizations are not required to disclose their donors publicly, and they can engage in political activity as long as it is not their 'primary purpose' — a standard the IRS has never precisely defined, inconsistently enforced, and largely abandoned following a political firestorm over 501(c)(4) scrutiny during the Obama administration.
The legal architecture creates a layered structure designed to obscure financial origins. A wealthy donor writes a check to a 501(c)(4). The 501(c)(4) uses those funds to run ads — either directly, or by transferring money to a Super PAC (which must disclose that it received money from 'XYZ Organization,' but not who funded XYZ Organization). The Super PAC runs television advertising in a competitive race. The donor's name never appears in any public disclosure. Additional shells can be added at each layer: a 501(c)(4) can fund a different 501(c)(4), which funds a Super PAC, which runs the ads. Federal campaign finance law does not require tracing money through these chains.
The modern dark money ecosystem was substantially built by the network of organizations associated with Charles and David Koch, which by 2012 had assembled a donor network that raised $400 million in a single election cycle through organizations including the American for Prosperity Foundation, the Donors Trust donor-advised fund (described by critics as a 'dark money ATM'), and dozens of affiliated nonprofits. Crossroads GPS, founded by Republican strategist Karl Rove, was another early large-scale dark money vehicle. Liberal equivalents have grown — the Sixteen Thirty Fund and its affiliates have managed hundreds of millions in progressive dark money — but the scale of conservative infrastructure built over decades remains larger. Jane Mayer's 2016 book Dark Money is the definitive account of how the network was assembled.
The IRS is the nominal regulator of 501(c)(4) organizations, and its failure to enforce clear standards has been consistently bipartisan. A 2013 controversy over whether IRS agents had applied additional scrutiny to conservative groups seeking 501(c)(4) status prompted a congressional investigation and ultimately paralyzed the agency's willingness to engage with political nonprofit oversight at all. The FEC, which oversees federal election spending, has jurisdiction over coordination between these groups and campaigns but is structured by law with three Republican and three Democratic commissioners — ensuring partisan deadlock on contested questions. The result is a regulatory landscape where the rules are unclear and the regulators are designed not to enforce them.
Why it matters
Democracy's basic accountability logic requires that voters be able to evaluate the credibility of political speech by knowing who is funding it. A pharmaceutical company funding ads praising a candidate's healthcare positions is information a voter needs to assess the ad. Dark money systematically removes that information. The argument that disclosure 'chills' political speech — that donors have a First Amendment right to give anonymously — has merit in narrow cases involving documented harassment. But it has been stretched to cover the routine political spending of some of the most powerful economic interests in the country, whose interests in anonymity are not about personal safety but about avoiding accountability.
The judicial capture dimension of dark money is among its least discussed consequences. The Federalist Society, a legal network that has been the primary pipeline for conservative judicial nominations for forty years, has been funded substantially by dark money donors. The JCN — Judicial Crisis Network — spent more than $35 million on campaigns to confirm Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett to the Supreme Court, and to block Merrick Garland's confirmation, without disclosing who funded those campaigns. The result is that the most consequential judicial appointments in recent American history were supported by spending campaigns whose financial backing the public does not know.
Dark money is also the principal vector through which foreign influence can penetrate U.S. elections. Campaign finance law prohibits direct contributions from foreign nationals, including foreign corporations. But 501(c)(4) organizations are not required to verify the citizenship or residency of their donors, and the opaque structure of these organizations makes it genuinely difficult to determine whether foreign money has entered the chain. The Senate Intelligence Committee's bipartisan 2020 report on Russian election interference identified dark money channels as areas of concern for foreign influence. The FEC lacks the investigative infrastructure and political will to systematically audit these flows.
The reform landscape is bleak. The DISCLOSE Act — which would require political nonprofits to disclose donors who give more than $10,000 — has passed the House and failed in the Senate multiple times, blocked by the legislative filibuster. Every senator who has voted against it has received campaign support from organizations funded through the dark money system. The political actors best positioned to restrict dark money have the most to lose from restricting it, or the most to gain from using it. The Supreme Court's Citizens United decision established a constitutional framework that makes sweeping reform difficult without overturning or significantly narrowing that precedent — and the Court that would do the narrowing was in part confirmed with dark money support.
Sources & Further Reading
- Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right
- Dark Money Database
- Senate Intelligence Committee Report on Russian Active Measures Campaigns and Interference in the 2016 U.S. Election (Vol. 5)
- How Dark Money Helped Democrats Dominate the 2020 Campaign Trail
- Buying Time: The Dark Money Groups Using the Courts to Shape U.S. Elections