Adler proposes dark money ordinance

Mayor Steve Adler, who was the subject of dark money attacks during his campaign for mayor in 2014, is proposing an ordinance to deal with the problem. Members of the City Council Audit and Finance Committee discussed the matter Wednesday and voted unanimously to forward Adler’s resolution to the full Council for its consideration.

That resolution describes dark money this way: “In an attempt to hide their funding of election activity, large political actors across the country have been funding such activity through non-profit organizations and other entities that generally do not have to disclose their funding sources.”

The resolution also states that an ordinance addressing the issue needs to be in place at least six months before next November’s election “to ensure election funding transparency.”

The resolution directs the city manager to draft an ordinance for the Audit and Finance Committee’s consideration in November after reviewing dark money laws and proposals in other jurisdictions. Those other jurisdictions include California, which, according to the resolution, has “passed and implemented effective laws that require timely public disclosure of heretofore dark money.”

The resolution specifically asks staff to identify effective laws to ensure comprehensive disclosure of election contributions and expenditures “that are funneled through 501(c)4 non-profit organizations and other non-disclosing entities and persons.” The reference draws from a part of the Internal Revenue Code that allows certain nonprofits organized to promote social welfare to spend some of their funds on political expenditures.

“We now have hundreds and hundreds of millions of dollars of dark money at the federal level,” attorney Fred Lewis told the committee. “At the state level, in the last election, we had $1.4 million.” During last year’s Council elections, Lewis said, Austin started seeing dark money with the newspaper ad attacking campaign consultant David Butts and in the money spent on the robocalls against then-candidate Adler.

The Austin Monitor disclosed at that time that the robocalls were funded by a labor union political action committee out of South Carolina. And the anti-Butts ad was apparently funded by former Texas Monthly publisher Mike Levy, although there was never any real proof.

Adler said Wednesday night, “I just think the people need and want timely disclosure of both contributions and expenditures in campaigns, and if there’s a way for us to do that without abridging free speech … we should find the fullest extent to do that.”

While it might be difficult to enforce the law against an out-of-state entity, Adler said, he wants staff to research how the city can do it.

He added, “As organizations and money get more sophisticated, we will probably see more and more things like this happening. And you see it happening at the federal and state level, and I would expect that over time, we would begin to see it more at the local level unless we have been proactive in our approach.”