New law seeks to close 'dark money' loopholes

CHEYENNE — Gov. Mark Gordon has signed into law a bill that attempts to close dark money loopholes through additional campaign finance reporting fees.

Dark money is defined in its anonymity, meaning organizations do not disclose their donors and concentrate on spending funds to influence voters.

Advocates for the bill shared with the Wyoming Tribune Eagle their concern for these kinds of independent expenditure organizations aggressively impacting Wyoming elections. They said House Bill 80 is a further step in the right direction to uphold voter power.

“Our whole mission is to create transparency in government and allow the voices of individual voters to be heard by the legislators, rather than the voice of big owners,” said Wyoming Promise Chair Ken Chetsek. “We think that people should be represented, and not corporate interests.”

This is not just an issue in Wyoming, but across the nation.

The Brennan Center for Justice has reported that politically active nonprofit groups have poured more than $1 billion into federal elections since the Citizens United v. FEC Supreme Court ruling in 2010. The decision validated the idea that corporations are people and money is speech, allowing for unlimited spending without knowing who the donors are.

“Political speech is indispensable to decision making in a democracy, and this is no less true because the speech comes from a corporation, rather than an individual,” wrote Supreme Court Justice Anthony Kennedy.

A few examples of IRS tax code 501(c) organizations that fall under this protected category are the National Rifle Association, Planned Parenthood, U.S. Chamber of Commerce and the Heritage Foundation.

Opponents argue undisclosed funding sources from these organizations make it more difficult for citizens to trace expenditures, and to understand who is trying to persuade their vote in one direction or the other.

Wyoming Promise is pushing for an amendment to the U.S. Constitution to overturn the Supreme Court decision. Until then, bills such as HB 80 provide some form of relief at the state level.

The legislation amends Wyoming statute. The new law requires all campaigns, political action committees and organizations to file an itemized statement of contributions and expenditures. If there is a failure to file the reports with the secretary of state, there can be a final order imposing a civil penalty. The penalty can be up to $500 a day beginning on the date of the final order and ending when the final report is filed. Previously, it was a one-time fee of $500.

“We thought that was an easy loophole,” Chetsek said. “You can buy your way out of the reporting requirements for a pretty low price, especially when you’re probably spending tens of thousands of dollars in electioneering campaigns.”

According to the campaign finance reform advocate, the concern was justified just two years ago. In 2020, a gun rights group attacking Republican candidates during the election cycle failed to file and was challenged by the secretary of state. Instead of listing their donors, the resolution was for the group only to pay the statutory fine of $500.

By imposing a daily fee, he said, it leaves little opportunity not to disclose.

“The fines can be crippling if they want to continue doing business,” he said. “They’ve got to file the report because the fines will just keep on accumulating, and, ultimately, they will not have enough money to do what they want, as long as the fines are enforced. There is a very strong incentive for them to file the report now.”

In order for the change to occur, legislators also had to be in favor of setting clear boundaries for organizations that could be donating to their campaigns. The bill passed through the House Corporations, Elections and Political Subdivision Committee unanimously, and by strong majorities in the House and Senate.

House Corporations Committee Chairman Rep. Dan Zwonitzer, R-Cheyenne, said although he considers it a First Amendment right to spend money how an individual chooses, he said the public has to be made aware of where it’s going and who it’s from.

“One of the things I’ve learned after 20 years of doing this is no matter how robust the laws are, the really bad actors will keep finding ways around them, and loopholes,” he said. “But I do think it’s important to have that framework in place, especially for transparency and accountability.”