© Josh Sager – March 2014
The United States political system is currently experiencing a perfect storm of moneyed-interest corruption: wealthy groups and individuals are being allowed to donate virtually unlimited amounts of money to political candidates/groups while retaining anonymity from both the public and government watchdogs. This has been made possible by a loophole in the tax laws surrounding the 501(c)(4) status and a legion of faux-nonprofits have sprung up to launder the money of the elite, for use in the auction of our country’s “democracy.”
In many ways, the United States has devolved into a plutocracy, with a powerful elite acting as the gatekeepers who decide which politicians are considered by the public. Because these elite interests give money to both sides of the mainstream political debate, they have bought influence over almost every politician in federal office today—essentially, your electoral choices are between the heartless, insane, hyper-religious, fact-denying, racist, misogynist, Republicans, and the Democrats, who will act apologetic while handing money to the rich and making painful cuts to the poor and middle classes.
The corrupting effects of the invisible money flooding our politics are obvious to everybody but the five conservative justices on the Supreme Court who made such corruption possible; that said, many Americans overlook the potential international relations and national defense ramifications from the corruption of secret money in politics.
The United States has the most powerful military in the world and could obliterate any enemy in open combat. However, the fact that invisible money can control our elections means that our country is vulnerable to economic manipulations from foreign actors. Put simply, wealthy countries like China, Saudi Arabia, and Russia can illegally spend millions in our elections, supporting politicians who favor their countries’ interests (ex. by passing “free trade” treaties or using our military to crush their political enemies) without anybody ever knowing.
Instead of giving money to candidates or candidate PACs—both of which are subject to disclosure requirements—many interests have chosen to abuse a loophole in the non-profit tax law to transform the 501(C)(4) status (non-profit social welfare organization) into a political weapon. The invisible and untraceable money laundered through these 501 groups is called “dark money.”
Prior to 2006, 501(c)(4) groups were almost entirely non-political. Unfortunately, the Supreme Court’s Federal Elections Commission v. Wisconsin Right to Life decision in 2007 changed this when it changed how the tax law was interpreted in relation to 501(c)(4) groups. This decision opened a loophole by allowing non-profits to advocate on issues of politics that they claim to involve the promotion of social welfare—they were still barred from advocating for or against a specific politician/party, but they could easily hammer a target on an issue (ex. it is illegal to advocate for a politician who supports coal, but it is legal to flood the airwaves with ads saying how beneficial coal would be to an economy and how the public should support pro-coal policies).
Because they were designed to be apolitical, 501(c)(4) non-profits do not require disclosure of donors, merely donation amounts. The combination of an easily-exploited loophole allowing political speech and absolute secrecy over donors made political “non-profits” the perfect hatchet-groups for secret money propaganda. For as long as they are careful not to overtly electioneer (living within the letter of the law but not its intent), these groups can bypass campaign finance laws and facilitate the corruption of elections by those with the most money.
As you can clearly see in the previous graph, the FEC v. Wisconsin Right to Life decision in 2006 primed the pump for political spending, but it wasn’t until 2010—when the Supreme Court’s Citizens United v. FEC decision allowed corporations political spending rights—that the true crisis of the political non-profit was realized. Allowing large aggregates of money and infrastructure like corporations and unions to donate to 501(c)(4) and super-PAC groups accelerated the growth of fake nonprofit propaganda mills into overdrive.
Between 2010 and 2012 alone, the amount of dark, unaccountable, money spent by political 501(c)(4) groups almost tripled, and this is a trend which shows no sign of stopping.
Under the current campaign finance laws, there is nothing stopping foreign governments and corporations from utilizing the 501(c)(4) loophole to funnel millions of secret dollars into the coffers of politicians who will later pay back those funds with legislation favorable to their donors; technically, the law outlaws donations from foreign entities, but the secrecy surrounding 501(c)(4) groups’ finances makes it impossible to verify that the law is being followed.
An American politician is fairly cheap to buy, yet has the potential to provide an immense return on investment—thousands of dollars donated to a politician can easily net millions of dollars in benefits. This high cost/benefit ratio, combined with the secrecy of the donation process, makes our campaigns incredibly tempting targets for foreign manipulation.
Dark Money’s Effect on Trade and Economic Policies
The vulnerability of American politics to foreign money extends throughout every aspect of international relations and trade. By buying our politicians, foreign entities are able manipulate American trade, regulatory, and contracting policies, extract American resources, and put their interests at an advantage over those of the American people.
Here are a few examples of such situations:
- By pushing for “free trade” agreements, foreign countries and corporations can steal production lines from the USA, which tends to have stronger labor and safety standards than developing nations. This outsourcing cripples the American middle class, but it benefits the corporations who keep labor costs low, the foreign governments which gain economic growth, and the American politicians who took money to sell out their constituents.
- Multinational petrochemical companies can buy our politicians in order to secure low-royalty resources extraction leases which allow them to make huge profits off of American natural resources–the American people will never see the profits of this extraction and are left to deal with the pollution that comes from the extraction process.
- If a country is engaged in manipulative currency practices, it can prevent the USA from reacting by funneling money to politicians who are willing to look the other way (either out of gratitude or ideology).
- In order to preserve their profits, polluting industries can donate money to American politicians in order to stall any American leadership in addressing global climate change.
Dark Money’s Threat to National Security
The United States military is better funded and more powerful than any other fighting force in the history of mankind. Unfortunately, this power does nothing to reduce the dangers of internal corruption due to our civilian and military leadership being bought by foreign money. If foreign corporations and nations can get their dark money hooks into our commander in chief or a significant portion of the legislator, they can steer our country’s military policy, if not co-opt the might of our nation’s military to achieve their goals.
Literally no area of defense policy is safe from the corruption of foreign money:
During the appropriations process, multinational defense contractors and paramilitary organizations (ex. Blackwater/Academi/Xe or Wackenhut security) are able to score lucrative contracts providing services to the American military. By buying our politicians, these groups can make immense profits and insulate themselves from oversight by punishing those who would take them to task for civil rights abuses.
Foreign nations can donate dark money to our politicians in order to essentially buy protection from the United States military and ensure that their geopolitical enemies understand that any act of aggression will incur the wrath of the US military. By doing this, these states essentially treat the US military as a mercenary army, controlled through the proxy of a few corrupt American politicians. The right wing movement in Israel has utilized this strategy through AIPAC and several other organizations for years, gaining massive military aid and virtually uncontested support from the US government.
Probably the most extreme example of this corruption imaginable is the potential for terrorist groups to literally buy their way out of their terrorist classification and back into the good books of the US government (and off of our kill lists). While this level of corruption may sound far-fetched and extreme, it has actually already happened.
Back in 2012, a multi-million dollar campaign of donations and lobbying by the Iranian separatist and terrorist group MEK—which has a history of killing Americans and was allied with the now-deceased Saddam Hussein—caused a bipartisan group of politicians to advocate for removing the group from the State Department’s terror group listing. Ultimately, this campaign was successful and MEK was removed from the terrorist group listing in September of 2012. The politicians who pushed the reclassification of MEK were as ideologically diverse as Ed Rendel (D) and Mike Rogers (R), but the common thread was that they all took thousands of dollars in donations from the terrorist group.
If terrorists, private armies and geopolitical adversaries of the US can all buy influence over our politicians, then there is little hope that our government will implement rational and fair policies in regard to our national defense. Rational and smart defensive and trade policies will take the back seat to policies that cater to the profits and geopolitical interests of the donor class—regardless of whether or not these policies are good for the American people.
Dark money allows unpopular or illegal donors to corrupt our politicians with little fear of exposure. The American people must reject this corruption and amend the Constitution in order to permanently and definitively ban dark money, corporate/union money, and big donations from private individuals.