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Dark Money and Independent Expenditures

What’s now being called Dark Money is a type of independent expenditure.

Independent Expenditure Committees (IECs) are protected by the First Amendment, according to the Supreme Court’s Citizens United decision, and provide a simple and legal avenue for evading campaign finance regulations.

As a result, an increasing percentage of campaign donations aren’t coming to candidates but are going instead to political committees who make the expenditure for the candidates.

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This was powerfully illustrated in the local 2016 election. The biggest spender in Santa Clara wasn’t a candidate. It was the Santa Clara police union PAC, which collected $85,000–more than twice the city’s campaign donation cap–from four developers and the California Apartment Association, in amounts of $10,000 or more–which exceeds the City’s $500 individual donation limit by 2,000 percent.

Dark Money, also completely legal, operates the same way, except that the organizations collecting the money and making the expenditures are organized in ways that prevent the sources of the money from being disclosed.

One way is through tax-exempt 501(c)(4) groups with revenue under $50,000, which don’t have to report individual donations. The second is to incorporate the PAC as an LLC, thereby evading public transparency requirements entirely.

The Dark Money Gillmor is referring to when she uses the phrase is the $49,000 spent in the 2016 election by a San Francisco political committee called BLUPAC, operated by Douglas Chan, a San Francisco lawyer, Civil Service Commissioner and founder of the Chinese American Voter Education Committee. Chan published one of the first studies on Asian voter impact in U.S. politics and has a long record of Asian-American issues advocacy.

Gillmor has stated that she suspects BLUPAC’s money comes from the 49ers.

No evidence of this has been produced. The PAC received $10,000 from the San Francisco POA PAC, according to the San Francisco Ethics Commission (sfethics.org). No other donations to the group are reported either at the municipal or state level. Chan refuses to name his donors.

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The Mlnarik Law Group, Inc.

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