Council to consider dark money ordinance

Independent political groups that spend money to influence elections will be required to disclose much more about themselves and their donors if City Council approves a proposed ordinance.

At a Council work session on Tuesday, Assistant City Attorney Cynthia Tom told Council members that the ordinance she had helped craft with the Office of the City Clerk would likely make Austin the first city in Texas to implement such a stringent disclosure rule for such groups.

The measure is the result of a resolution Council approved last year, which instructed staff to develop a law to crack down on “dark money” nonprofits that use funds to help or hurt a candidate without disclosing their spending or their donors, as candidates are required to do.

Under the proposed ordinance, any group that spends money to either support or oppose a candidate or ballot measure must report the names, addresses, occupations and employers of any donors who contributed more than $250.

In some jurisdictions with similar campaign finance laws in place, independent groups avoid disclosing their donors by arguing that the law requires them only to disclose those who gave with the intent of funding a specific campaign effort, rather than to the group in general.

The Austin measure seeks to prevent that type of evasion by specifying that groups can shield the identity of donors who give above the threshold only if those who contributed did not have reason to believe that their money would be spent to influence an election or that it would be “commingled with other funds” spent on elections.

If it is an individual person, rather than a group, making the expenditure, then she must similarly report her name, occupation, employer and address.

Finally, the measure would also require intermediaries who transfer more than $500 from donors (“covered transfers”) to another group for the purpose of campaign spending to file a report detailing the amount of money they transferred as well as their names, addresses, occupations and employers.

While independent political action committees (PACs) and other groups affiliated with business interests or ideological causes have long played a role in elections, their influence has ballooned since the landmark Supreme Court ruling in 2010, Citizens United v. FEC, which enshrined the right of corporations and unions to spend freely to independently support or oppose candidates.

So far, the effect of Citizens United has not been quite as dramatic in Austin city politics as on the national stage. But a number of independent spending efforts during the 2014 city elections, including a notable union-funded attack on Mayor Steve Adler, have many local activists worried that it is only a matter of time before city politics begins to resemble this year’s presidential election, in which candidates rely more on super PACs funded by a small group of ultra-rich donors than on their own campaigns.

Austin currently allows candidates to accept only $350 from a single donor — a figure adjusted annually for inflation — which is a limit much lower than that imposed by most other large cities. The low limit, some argue, creates an additional incentive for wealthy donors to give to outside groups, which can receive unlimited funds. Many on Council, however, reject that hypothesis, and there does not appear to be any push to raise the limits in the near future.

According to the timeline suggested by city staff, Council will approve the ordinance on June 16, and the Ethics Review Commission will take up the measure at its Aug. 10 meeting.

If the commission approves the ordinance, the bulk of it will be implemented immediately, fulfilling Adler’s request that it be in place for the final months of the November election campaign. But staff recommended that the “covered transfers” policy be phased in beginning in January, since it requires the development of a new campaign finance form.

Photo by Dustin Gaffke made available through a Creative Commons license.