The always-terrific Center for Political Accountability has released a very significant new report called Conflicted Consequences, documenting the growth, and pernicious political impact of dark money 527 groups. The report reveals that between 2009 and 2018, six large, partisan state- oriented 527 committees – Democratic and Republican — cumulatively raised $1.3 billion. “Taking full advantage of the Supreme Court’s Citizens United decision, they more than tripled their fundraising per election cycle, taking in $385.5 million for the 2018 election cycle, up from less than $122 million in the 2008 election cycle,” with 45.5 percent coming from public corporations with no obligation to disclose these expenditures to their shareholders. Indeed, “Policy outcomes pursued by elected officials benefitting from the 527 spending have often conflicted with stated core values and positions of donor companies.”

The full report is below.

From the foreword:

Conflicted Consequences provides striking new details about a particularly crucial vehicle for these maneuvers: “527” organizations that take contributions from a variety of sources and then spend it to advance a broad political agenda. For corporations pursuing agendas they do not want scrutinized, this type of spending has three big advantages over traditional political spending: it is less likely to attract attention than PAC contributions that go directly from firms to candidates; it is effectively “laundered” by running through the 527 organization so the donor can duck accountability for specific uses of the money; and it allows the resources of many companies to be pooled to achieve maximum impact. For all these reasons, such expenditures probably provide a better indication of how major corporate spenders hope to influence the nation’s politics. That’s especially true if those spenders are packaging a lot of money this way – and the report makes clear that many of the nation’s biggest companies do so.

With the curtain pulled back, we see that much of this spending is, at a minimum, deployed in ways that cut against the lofty rhetoric of bipartisan problem-solving. As this report explores, while big corporations and trade associations use 527s to channel resources to both major parties, they give the bulk of such spending to the Republican Party. And the intermediate organizations that these companies finance often direct that money in ways that belie companies’ stated commitments to environmental sustainability, racial justice, and the dignity and safety of workers. To take just one of the many instances this report recounts, large donations channeled through these organizations helped North Carolina Republicans take control of the state legislature in 2010. They used that control to institute extreme gerrymanders of both the state legislature and the state’s delegation to Congress, and to pursue a range of divisive and anti-democratic policies, including restrictions on LGBTQ rights and new rules designed to impede the access of black voters to the polls.

The outsized capacity of a small group of economic elites to so heavily influence politics and policy raises grave issues in a democracy. But at a minimum, such actions should be visible, so shareholders, employees, and customers—not to mention citizens and their elected representatives—can judge such actions for themselves.

From the introduction (footnotes omitted):

In this report, the Center for Political Accountability has followed the money, just as it did in its earlier Collision Course report. Focusing on groups active at the state • level, we have mapped where their money came from
and how much the groups received. And we have identified outcomes bankrolled by these groups. CPA is the first to undertake this research.

The money trail reveals that three Republican 527 groups targeted their political spending over the past decade from cumulative funds of more than $800 million, with $388 million or almost half (46.6 percent) received from public company and trade association treasuries. This spending helped bring
changes in control of state legislatures and the election of governors and attorneys general. In turn it helped drive new agendas that have transformed state and national policy. Among states where these 527s have had a major impact are North Carolina, Alabama, Pennsylvania, Georgia, Ohio, Michigan, Wisconsin,
A lawsuit4 led by Texas Attorney General Ken Paxton to dismantle the 10-year-old Affordable Care Act will be argued before the Supreme Court, within months after millions of citizens have been sickened or died in the pandemic.

Climate change is rising worldwide. President Obama’s signature effort to combat it was suspended by the Supreme Court following challenges from several attorneys general, who were supported by one of the 527 groups. Now pending is a lawsuit by other states and cities challenging President Trump’s replacement plan as fatally weak.

State legislators, governors and attorneys general from several states have been pushing to ban abortions during the pandemic, mounting a new front in the abortion wars.

LGBTQ antidiscrimination protections were banned in 2016 by North Carolina, following the change in control of the legislature in 2010 and the governor’s mansion in 2012. A national backlash erupted. In a prominent example of companies facing unintended consequences from political spending, donor companies that helped elect the law’s supporters were caught in the fallout.8 North Carolina’s so-called “bathroom bill” was repealed in 2017.

Racial equity in political representation will remain a hot issue when state legislatures elected in November reshape congressional and state legislative maps in 2021. A decade ago, corporations poured millions of dollars into a 527 group spearheading a strategy that flipped control of many legislatures and led in some states to racial gerrymandering of legislative boundaries. Primary examples were North Carolina and Alabama. In North Carolina, the legislature gerrymandered districts in 2011 to dilute black voting strength; the Supreme Court struck down parts of North Carolina’s plan as unconstitutional racial gerrymanders in 2017. In Alabama, the legislature redrew 12 districts in 2012, maintaining high concentrations of black voters in some of the districts. Federal courts upheld a challenge to the new lines, finding them to be racially gerrymandered, and ordered that they be redrawn.

Conflicted-Consequences — CPA