It’s raining dark money this election season
Aug 23, 2022
Episode 737

It’s raining dark money this election season

HTML EMBED:
COPY
What you need to know about money in politics ahead of the midterms.

Have you heard of Leonardo Leo?

He’s basically a kingmaker in conservative big-money politics. His conservative nonprofit just received $1.6 billion, what’s believed to be the largest single donation to a political nonprofit, and it’s big deal. What we think will happen next with those funds ratchets up this conversation we’re having about dark money in politics.

“It’s a huge sum of money that will have a great impact. I expect it to have an immediate and ongoing impact for people, organizations, concerned about the concentration of money, and therefore power in the hands of a very few that will influence the shape of our democracy,” said Sheila Krumholz, executive director of Open Secrets, a nonpartisan group that tracks money in politics.

With the midterms around the corner and all this difficult-to-trace money sloshing around this election cycle, we’re talking about how it’ll shape campaigns and votes across the country in November and beyond. One surprise: Political action committee donations are down, along with PACs’ relative power, while small donors who band together to deliver big sums are gaining importance, along with megadonors like Leonardo Leo.

On the show today, Krumholz discusses not only what voters should know before they head to the polls, but also how money in politics has evolved over the years and why it’s not expected to change anytime soon.

In the News Fix, we’ll talk about the ripple effects of the war in Ukraine and what it has to do with how much it might cost to warm your home this winter. Plus, what’s up with all the pearl clutching over “quiet quitters?”

Then we hear a listener’s hack that’ll save you money in the kitchen. And actor and TV host LeVar Burton (we’re fangirling right now) answers the Make Me Smart question.

Here’s everything we talked about today:

What is something you thought you knew but later found out you were wrong about? We’re looking for your answers to the Make Me Smart question. Submit yours at makemesmart@marketplace.org, or leave a voice message at 508-U-B-SMART. 

Make Me Smart August 23, 2022 transcript

 

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

 

Kai Ryssdal: Dulcet tones of Charlton?

 

Kimberly Adams: Dulcet! Yes. Hello, I’m Kimberly Adams. Welcome to make me smart, where none of us is as smart as all of us.

 

Kai Ryssdal: I’m Kai Ryssdal. It’s Tuesday. Today, a weekly single topic program, which we do on Tuesdays. Money in the midterms is on the menu today. Every election it seems we’re breaking new spending records. And with all the money, the ever-increasing pots of money around. There is some speculation that this could be the most expensive midterm yet.

 

Kimberly Adams: Speculation. It’s probably always. I know, it’s like every single cycle, we’re like, this is the biggest spending cycle ever. And again…

 

Kai Ryssdal: We should tell people we’re face to face, right?

 

Kimberly Adams: Yes, we’re face to face. Hello, I can see you.

 

Kai Ryssdal: Well, I don’t know where to look, because I don’t usually look anywhere.

 

Kimberly Adams: I know, we had this problem when you were in Washington. Now it’s just like, turn my head. All right, we are a little over two months away from the November midterms. And so it’s a good time to check in for where we are, how the money is going to shape campaigns, and potentially voters across the country over these next couple of months. What kind of ads you’re going to see, what the long term consequences are. And here to make us smart is Sheila Krumholz, She’s the executive director at Open Secrets, a nonpartisan group that tracks money in politics, and they also write a bunch of really cool stories about how money moves through politics. Highly recommend that you not only look at their data, but also read their stories. Hey, Sheila.

 

Sheila Krumholz: Hey there. How are you?

 

Kimberly Adams: I’m good. Thank you. What does campaign money in the midterms look like in general right now? And how does it compare to previous cycles?

 

Sheila Krumholz: Well, it is early. So our very tentative, very early estimate suggests spending is at or ahead of the last midterm election in 2018, which was itself a record smashing cycle. So we’re looking at at least being in the ballpark and maybe being ahead of 2018. But again, we just don’t have – we need an update on the numbers before we can say for sure where we’re at.

 

Kimberly Adams: And for context, what was the 2018 spending?

 

Sheila Krumholz: 2018, there was a total spending of $5.7 billion, which would be in current dollars $6.7 billion.

 

Kai Ryssdal: Nicely done, inflation matters.

 

Sheila Krumholz: And it sure does. And, you know, that was itself a huge leap in spending from the prior midterm election. So each cycle we’re seeing these – well, lately, we’re seeing these big jumps and spending, you know. Lots of reasons for that which we can get into, but clearly, there continues to be a very high level of interest by donors.

 

Kai Ryssdal: Is that federal only? Or do you count state campaigns in there as well, Sheila?

 

Sheila Krumholz: That is federal only. However, we do now look at state level and in fact, we’re about to unveil a new feature on ballot measures in the next week or so on Open Secrets. And ballot measures can accept money from nonprofits in all the states. We’re tracking about 121 –

 

Kimberly Adams: Wait, wait, wait, can you highlight why that’s different? Why it matters that they can accept money from nonprofits in all the state?

 

Sheila Krumholz: Yes. Yeah. Funding around ballot measures is notoriously variable, but they will see huge money in some of these measures, the most expensive measure we’ve ever had regulated – kidney dialysis treatment in California.

 

Kai Ryssdal: Yeah, California, you bet. And I think that was coming back around too, I don’t think that was done yet.

 

Sheila Krumholz: Yep. So support for that measure was largely from small donors and unions, with a financial windfall of opposition led by DaVita. There are $67 million spent just on that one measure. And we will see in the ballpark of 140 or so qualifying deadlines passed in the coming weeks, typically 150, 180 measures. So lots of measures, big, big money, and nonprofits, or non-disclosing nonprofits, or dark money, can come into ballot measures at any time at the last minute, and totally change the calculus.

 

Kai Ryssdal: Right. So I think it’s important to point that out, these totals you’re giving and the estimates you have, are money you know about.

 

Sheila Krumholz: Precisely, this is money that is disclosed. We won’t necessarily know about all of the spending by dark money organizations, and we definitely will have be challenged to find out the sources of the money, which is a big problem for understanding who’s pushing them and what their motivations are.

 

Kimberly Adams: Right, because when we talk about nonprofits being able to donate, like, there’s nonprofits like us, where we like to think we’re warm, fuzzy nonprofits, and your nonprofit, but then there are also nonprofits that are like political action committees, and social welfare organizations, think tanks and things like that, and others that, you know, have a bit more of an agenda and don’t have to disclose those donors. So that’s sort of why we call them dark money, is they don’t have to tell the government or the public where they get their money, but they get to spend it in all these important ways. Sheila, can you talk about – oh, go ahead.

 

Sheila Krumholz: I was just gonna say, and from our perspective, the most important thing about them is that they’re spending it on our elections to influence politics.

 

Kimberly Adams: Yeah. So that’s the dark money donors that we can’t really trace. But some money that we can trace comes from digital fundraising, like small dollar donors. Can you talk about that digital fundraising platforms like ActBlue and WinRed, how they work and how that kind of dynamic is playing out in the midterm so far?

 

Sheila Krumholz: Yeah, ActBlue and WinRed are crucial to the story of small donors and the increase in money coming from these donors giving small amounts. So they, they play a crucial role. Both Democrats and Republicans are getting a lot of money now from small individual donations, through WinRed on the right and ActBlue on the left. And they facilitate candidates raising those small donations to candidates and party committees, kind of use them as their fundraising – their online platform for fundraising. And for ActBlue, adoption is practically universal for Democratic candidates at this point. They had an earlier start, they got started in 2004, whereas WinRed, their conservative counterpart just was stood up in 2019. But WinRed is really catching up fast. ActBlue has already surpassed their individual donation totals from the last round of midterms in 2018. So in 2018, they raised 1.23 billion, whereas already as of June of this year, they’re at 1.27 billion. And, and WinRed has been a little slower this year. That was the story recently that their fundraising was slowing down on small donations. You know, not having Trump at the top of the ticket, I think is difficult. Perhaps that’s one of the reasons. But Trump’s fundraising is reported to have picked up after the Mar-a-Lago raid and his save America PAC joint fundraising committee redistributes money through his leadership PAC and make America great again PAC to give to candidates and super PACs that are active in, especially in the big Senate races. So big money coming through these two really important platforms with kind of varying levels, but especially for ActBlue, really, really going strong.

 

Kimberly Adams: I should also mention that save America PAC also distributes funds for lots of other things, including apparently to fund Trump’s portraits that are going into the National Portrait Gallery, $650,000.

 

Kai Ryssdal: I think it’s important to point out here, Sheila, that this system that we have, with the PACs and the super PACs and the dark money and the opacity and all of that, this is the way Congress set it up, right?

 

Sheila Krumholz: Yes, this is what has been allowed to evolve. It may not have been the intention. I don’t think it was personally. But it has evolved to this point. And Congress is at such a standstill, there’s such gridlock and polarization and hyper partisanship that there isn’t really much movement at the national level to really take stock of how its operating and make it more closely structured to the way it was supposed to be. You know, following Watergate, there was a system and yes, there were kind of chinks in the armor of regulation and disclosure and limits. But that really picked up speed following Citizens United and even before, but especially with Citizens United, that really kind of threw wide the barn door for mega donors and unlimited massive donations coming from really concentrated sources.

 

Kimberly Adams: Speaking of some of those big donors, what’s up with corporate giving, or corporate donations I shall say, this cycle?

 

Sheila Krumholz: Well, one interesting thing to note is that PAC contributions are way down this cycle. So PACs are primarily made up of corporate PACs. These are political action committees representing a company, they’re funded by employees of those companies largely, and not – you know, it looked like they might be way down early on, following the January 6 corporate PAC pledges to freeze donations. But the current PAC total is the lowest it’s been since 2010 through the same point in the cycle, so June of this election year. So the relative importance and power of PACs is much less these days. Again, those who have more relative power, the small donors banding together to deliver massive sums, and the mega donors and billionaire candidates. You know, PACs are among the few entities that donate to both parties. So they have to be accountable to people, to their members, their corporate leadership. And they’re basically existing to get access, they’re buying access through their donations rather than direct influence. But PACs at least are one instance where the money is actually declining.

 

Kai Ryssdal: Can I take it to the news for a second? I’m sure you saw the piece in The New York Times, I guess it was yesterday, about this billion and a half dollars that a Republican manufacturing guy gave to a group headed by Leonard Leo of the Federalist Society, formerly I suppose, I think he’s technically left. Number one, that is a gobsmacking amount of money, $1.6 billion. And number two, really?

 

Sheila Krumholz: Yes, this is a bombshell. It’s the largest donation ever to a politically active dark money group reporting revenue, much less in its first year. This is – as far as anyone knows, this is the largest ever. So it’s just, yeah, it is truly gobsmacking. And as the New York Times wrote in their scoop, this makes Leonard Leo a kingmaker in conservative big money politics.

 

Kai Ryssdal: A more of a kingmaker, we should say, right? Leonard Leo has run judicial appointments for the GOP for a very long time.

 

Sheila Krumholz: Yes, and I think this really will have an immediate impact. I mean, clearly, this is money that will be spent both this cycle and for years to come. And it helps expand his network of organizations. He’s got a dark money network that continues to expand and evolve, so far beyond judicial nominations. In recent years, he has been involved in restricting voting laws, in fighting critical race theory in schools. So there are lots of ways that this money could and likely will be spent for years to come.

 

Kimberly Adams: And we probably won’t even know how, because through dark money groups. As somebody who has spent so much time trying to track money in politics, it feels like it keeps getting harder. And I wonder what it does to you when you see a story like that. And it’s like, this is kind of like what you do, and then you see that. What does it feel like?

 

Sheila Krumholz: It does feel a little deflating. You know, we’re not a reform organization, other than we do defend transparency because we feel we can’t do our job, and the press and the voters can’t do their jobs well to – if we don’t know where the money’s coming from and why and be able to ask the question, why are they giving all this money? What do they have to gain or lose? In this case, we know where the money came from. It came from a billionaire who use this maneuver to avoid taxes on the donation. And, and of course, Leonard Leo’s nonprofit avoids taxes. And so you know, it’s a huge sum of money that will have a great impact, we don’t know how yet. But certainly this will have, I would say, I expect it to have an immediate and ongoing impact. For people, organizations, concerned about the concentration of money, and therefore power, in the hands of a very few that will influence the shape of our democracy, this is really a big deal. But it’s not new in the sense that, you know, we’ve had billionaire donors now for years following Citizens United, and even before that, giving soft money to the parties, and through 527 organizations that have had a really inordinate influence over our elections and our democracy. And, again, it brings us back to the question, you know, what do Americans want and expect of their democracy? It’s supposed to be a government of by and for the people. If they see and understand how the power is being diverted to the hands of a very concentrated powerful few, they’ll need to stand up and be counted and do something about it, or it will continue on in this direction.

 

Kimberly Adams: Sheila Krumholz, Executive Director at Open Secrets, which is a nonpartisan group. Thank you so much, Sheila.

 

Sheila Krumholz: My pleasure. Thank you.

 

Kimberly Adams: I actually hadn’t seen that story.

 

Kai Ryssdal: Oh my God, it’s crazy.

 

Kimberly Adams: I’m going to go and look at it. My goodness. So basically, you’re putting your money, just stashing it to do the stuff you’re going to do with it anyway, just not pay taxes on it.

 

Kai Ryssdal: It’s wild, it’s wild. $1.6 billion taxes being, being – not avoided, but not paid all over the place, because they’re nonprofits. And it’s wild. $1.6 billion. Yeah.

 

Kimberly Adams: I mean, look, I used to work with Peter Overby, back in my NPR days, and he was just so good at campaign finance stuff. And I remember, it was earlier in my career, and just like, hearing his stories, and like watching, you just peel back this layer after layer after layer. And then at that point, you’d get to something at the bottom of the – underneath all those layers. And now you can peel back one or two layers and then just hit ignore.

 

Kai Ryssdal: And that’s the thing. It’s not what’s illegal. It’s what’s legal in campaign finance, you know.

 

Kimberly Adams: Yeah. But it’s not just Congress allowing it, like it’s – I think it’s important to highlight the role of the Supreme Court and –

 

Kai Ryssdal: Yeah, very good point. Citizens United.

 

Kimberly Adams: Citizens United, that ruling last year with Ted Cruz about, you know, reimbursing yourself and all these rulings, they sort of pick away over time, state level laws make a big difference as well. So anyway, you tell us what you think, we’re going to keep talking about dark money in our elections for quite a while to come. So if there’s something you really want to know, about how money is moving in politics, not just at the federal level, but even at the state and local level. Let us know if there’s a story you want to share that you’ve seen in your community, really good to hear from you. Our number is 508-827-6278, also known as 508-U-B-SMART. You can send us a voice memo at makemesmart@marketplace.org. We are going to be back in just a bit. We’re back, it is time for said news fix. And I guess now the article I really have to go back and read is that New York Times one, but then you have another one.

 

Kai Ryssdal: So I just thought this is something that people need to be aware of come wintertime, and also, specifically in the northeastern part of this country. Natural gas prices today hit $10 per million British thermal units – BTUs, right, which is a record, which is of course prompted by demand because the Europeans are not getting Russian natural gas. And so we are sharing with them. We’re also using more natural gas here. That price is a record for the post shale fracking era, which is to say, our new era of supply of natural gas. So even though we have more of it, prices are really high. And I just think everybody needs to be aware that come wintertime, when you go to turn the thermostat on, it’s going to be super super expensive. They’re talking about a super spike in natural gas prices in the United States once the demand goes up. So look out. And it’s just one of those contextual things that can sort of slide by.

 

Kimberly Adams: I heard a story this morning, I think it was on Morning Report, about this factory in Poland that is basically shutting down because they make fertilizer and plastics and all these different polymers and things like that. But the feedstock that goes into it is natural gas. And because the natural gas is so high, they’re basically not producing fertilizer, or ammonia, or certain types of plastic. They’ve got a stockpile of certain things, but it is going to have a ripple effect in terms of prices. And so, you know, I’m not trying to make a joke here. But I think we’re going to be having real discussions about sort of how people keep themselves warm without turning up the heat. And so like, wearing those fuzzy slippers, in addition to socks inside and the sweaters, and it’s like, people might joke, oh, I’m gonna put on another sweater, no, legit, you’re gonna need to wear a sweater in the house so that you don’t have to turn up your heat as high because the bill might be really difficult for a lot of people to manage. So there’s that. My article is a follow up on what you did on your show yesterday about quiet quitting and the Wall Street Journal thing. I keep seeing these stories bubble up about oh no quiet quitting, and people not, you know, being willing to invest themselves in work. And I was seeing these Tiktok memes and Instagram reels or whatever, with this idea without knowing what it was called. And I guess, seeing this, the angst around it is funny to me, because I’ve yet to hear any description of quiet quitting, which is not people doing what they’re paid to do.

 

Kai Ryssdal: See? That’s exactly it. Right. And this is something I wish I had come back to the reporter with yesterday, right? In a lot of ways, this is super, super healthy, because while you and I were coming up professionally, it was always go, do more, extra mile, FaceTime 10 hours a day, blah, blah, blah. And that’s bananas. Man. That’s just not right. And I think it’s really healthy that there’s a new generation coming in, spurred by the pandemic when it was all messed up and people joining the workforce in really weird times, saying, no, no, no, no, no, no, no, you got me from nine to five, but that’s the whole smash.

 

Kimberly Adams: And I’m not going to work through my lunch break. And if you want me to just stay a little bit extra to do that extra project, you’re going to have to pay me overtime. Or if somebody quit, and you want me to take on their workload, you need to pay me for that extra work. And the pearl-clutching about this reminds me of this narrative about millennials. Oh, if you just stopped buying your avocado toast in your Starbucks, surely you’d be able to afford a house, which is not true. And yeah, you and I ran ourselves ragged to advance in our careers. And I would love it if the folks coming after us did not have to do that. And that would help with employment, because when there’s finally a reset about realistic work expectations, it’s going to create more jobs, because folks doing two and three jobs should actually be (paid) two and three jobs.

 

Kai Ryssdal: You know, I did an interview yesterday that, I don’t know when it’s airing, but it was a woman who had, she runs a market research company, 25-ish people. And they had tried to go to a 32-hour week instead of a 40-hour week. And she said it didn’t work for a whole lot of reasons, specifically her company. But what she said was, if we could overstaffed, if we could have – instead of you know, we need 25, if we could have 30 people on staff, we could make it so that everybody could work a 32-hour week and have a little sanity. You know? Yeah, interesting.

 

Kimberly Adams: And that’s, I think, why so many people are experimenting with the four-day workweek. And so, anyway. Every time I hear, I see one of these angsty, quiet quitting stories, it’s sort of just like, you’re just mad people are only doing the work you’re paying for.

 

Kai Ryssdal: Right. Exactly. Totally.

 

Kimberly Adams: Okay.

 

Kai Ryssdal: Let us proceed, Mr. Thorpe.

 

Kimberly Adams: Alright, so first up, we have a little bit of news you can use.

 

Becca: Hi, this is Becca in Norwalk, Connecticut. I have a pro tip for Kai. On economics on tap this week, you mentioned you were going to buy scallions. If you haven’t cooked them yet, once you’ve cut off all your green and light green parts, take those little stubs, stick them in a cup of water, and they will grow new scallions! Boom, saved you money. Thanks for making us smart.

 

Kai Ryssdal: You mean a little bit with like roots and stuff?

 

Kimberly Adams: Yes. You didn’t know this?

 

Kai Ryssdal: No, I didn’t know this.

 

Kimberly Adams: No, totally. You can put the bottom – like leave maybe like an inch or so of the bottom in water and they’ll sprout right back up. Multiple times.

 

Kai Ryssdal: How long does it take?

 

Kimberly Adams: Maybe like a week? So you just have like a rotating stack, like if you have multiple scallions, you can just do it over again.

 

Kai Ryssdal: Okay. All right. I’ll give it a whack. I’ll give it a whack.

 

Kimberly Adams: Um, yes. Okay. So before we go, we are going to leave you with this week’s answer to the make me smart question, which is what is something you thought you knew, but later found out you were wrong about? And this week’s answer comes from my career peak. So I’m pretty much done after this. Because this week, I interviewed actor and TV host LeVar Burton for a story on Marketplace Tech. He was lovely.

 

Kai Ryssdal: It was a fun little interview, actually.

 

Kimberly Adams: Yeah, it was, it was great to talk to him. However, his answer to the make me smart question is much more serious.

 

LeVar Burton: Wow. I thought I knew that America was always seeking its highest reflection of itself. And what I have come to find out is that that is part of the dream. But there has always been resistance to America, realizing its most full potential as a free society, right? So I thought I knew what America was and was all about. And I recognize now that I didn’t, that there was a lot more, that I needed to know about my country before fully and completely understanding her.

 

Kai Ryssdal: Yeah, so what’s happening now that’s, that is top five most profound answers, actually, on this podcast to that question, I think what’s happening now, right, is people are saying – well, and for the last five-ish years, people are saying the quiet part out aloud. You know?

 

Kimberly Adams: And we were talking leading up to this about book bands. And you know… yeah, because, you know, here’s somebody who’s worked for literacy for decades. And, you know, watching this happen, and he’s like, it’s, it’s embarrassing, and we should be embarrassed that we are even having a discussion about book bands in this country. And it is embarrassing. And it’s dangerous also. And, yeah. Anyway, he said it well. And you can send us your thoughts and your feelings about the state of the country and the democracy and what you thought you knew, but later found out you were wrong about. You can send – oh, you have more thought?

 

Kai Ryssdal: Well, no, I was just gonna say, as often happens on this podcast – Bridget, that’s an episode we should do before the election. State of American democracy. Right? I don’t know what it is. That is not a fully formed idea. But, but somehow.

 

Kimberly Adams: Yeah, I mean, I remember back to when we talked to Kyle Cheney about January 6, and we asked him how close we were to losing it all. And this was before we’d even seen as much evidence, and he was just like, it was really, really close. And the more that we saw in those hearings, the more you recognize just how close we were. Anyway, send us your answer to the make me smart question. You can send it with a voice memo, or email makemesmart@marketplace.org, voicemail 508-827-6278, 508-U-B-SMART. Today you can see my little dance in person.

 

Kai Ryssdal: No dancing in the studio… Make Me Smart is directed and produced by Marissa Cabrera. Our intern is Olivia Zhao, Ellen Rolfes writes our newsletters. Today’s program is engineered by Charlton Thorp. … is going to mix it down later. Ben Tolliday and Daniel Ramirez composed our theme music.

 

Kimberly Adams: The Senior Producer is Bridget Bodnar, who has a super cute haircut I can see in person. Donna Tam is the Director of On Demand. Francesca Levy is the Executive Director of Digital, and Marketplace’s Vice President and General Manager is Neil Scarborough.

 

Kai Ryssdal: Bridget, should I have noticed the haircut? Is that a bad thing?

 

Kimberly Adams: Well, it may not be new to you, because you see her…

 

Kai Ryssdal: I see her on a zoom as often as you do. But it’s cute.

 

Kimberly Adams: It’s cute, yeah. See, Marissa’s nodding.

 

Kai Ryssdal: There we go. And Bridget just sitting there going, oh you guys shut up.

None of us is as smart as all of us.

No matter how bananapants your day is, “Make Me Smart” is here to help you through it all— 5 days a week.

It’s never just a one-way conversation. Your questions, reactions, and donations are a vital part of the show. And we’re grateful for every single one.

Donate any amount to become a Marketplace Investor and help make us smarter (and make us smile!) every day.

The team

Marissa Cabrera Producer
Bridget Bodnar Senior producer
Tony Wagner Digital Producer
Marque Greene Associate Producer