'Dark money' filters down to local politics

Anonymously-funded nonprofits have been dominating federal election spending for years. Now local politicians are using them to promote political agendas and navigate crises.

First Look

When Bill de Blasio (D) became mayor of New York City, securing free, full day pre-K for every 4-year-old child in the city was at the top of his agenda. By the fall of 2015, that goal was achieved. 

"For the first time, any child, anywhere in this city, any 4-year-old can have full day pre-K for free," he said at a public school on Staten Island in Sept. 2015. "And it's just going to grow from here."

He could also have been referring to the nonprofit group whose financial might – backed by thousands of contributions from advocates, businesses, and celebrities, among others – has helped Mr. de Blasio achieve that first policy priority. That group, Campaign for One New York, has since moved on to support other aspects of de Blasio's political agenda, including his sweeping affordable housing plan.

This kind of "dark money" has been under scrutiny at the federal level for years as outside spending has skyrocketed, local and state governments and politicians are increasingly turning to nonprofits bankrolled by unseen donors to help promote their policies and maneuver through crises.

From Eric Garcetti in Los Angeles to Mike Duggan in Detroit, mayors have helped create nonprofits to raise money and attention for their agendas. And governors, from Chris Christie in New Jersey to Rick Snyder in Michigan have done the same.

In New York, de Blasio's use of a number of nonprofits prompted a good-government group to call for an investigation into the practice last week.

The upheaval began with the Supreme Court’s landmark "Citizens United" decision in 2010, which allowed corporations and labor unions to raise and spend unlimited amounts of money for politicians and candidates through independent super PACs. These super PACs have to disclose their donors, and are prohibited from dealing directly with candidates. But some of their biggest contributors, including nonprofit groups like Campaign for One New York, are not only allowed to coordinate with politicians, but don’t have to disclose their donors.

Spending from these organizations increased from less than $5.2 million in 2006 to over $300 million in 2012, according to the Center for Responsive Politics.

And the groups are starting to have a similar influence at the state level, in elections and also other political arenas. Michigan's Governor Snyder, for example, hired a team of public relations specialists through his nonprofit, Moving Michigan Forward, to help his administration handle the Flint water crisis.

"It is a blurring of the lines between the shadow governments of these outside groups and the people’s business," said Susan Lerner, executive director of Common Cause New York, the group that has asked for an investigation into de Blasio’s use of nonprofit entities.

The concern is that private interests could gain political leverage through these nonprofits.

In a memo obtained by The New York Times, Campaign for One New York wrote that while it was created "with a single focus" – the pre-K issue – it was moving onto a "next phase" of expanding affordable housing.

"We will launch our next major campaign to support the City as it pursues the most aggressive affordable housing plan in generations," the memo read.

Since it launched in 2014, the nonprofit has received more than $1 million in donations from real estate developers, many of whom have backed de Blasio’s housing plan and projects underway in the city. 

Supporters of the groups say they are needed to match the resources of opponents who are also using financially-juiced nonprofits. De Blasio, who has called for Citizens United to be reversed, has defended his use of nonprofits, noting that his groups disclose their donors. 

"It's not dark money if it's disclosed," he said last week.

Material from The Associated Press was used in this report.