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Opinion

The Secret Power Behind Local Elections

Chisun Lee and

Credit...Dandy/John J. Custer

WHEN the history of elections in 2016 is written, one of the central points is likely to be how little voters knew about the donors who influenced the contests. At the federal level, “dark money” groups — chiefly social welfare nonprofits and trade associations that aren’t required to disclose their donors and, thanks to the Supreme Court’s Citizens United ruling, can spend unlimited amounts on political advertising — have spent three times more in this election than they did at a comparable point in 2012.

Yet the rise of dark money may matter less in the race for president or Congress than for, say, the utilities commission in Arizona. Voters probably know much less about the candidates in contests like that, which get little news coverage but whose winner will have enormous power to affect energy company profits and what homeowners pay for electricity. For a relative pittance — less than $100,000 — corporations and others can use dark money to shape the outcome of a low-level race in which they have a direct stake.

Over the last year, the Brennan Center analyzed outside spending from before and after the 2010 Citizens United decision in six states — Alaska, Arizona, California, Colorado, Maine and Massachusetts — with almost 20 percent of the nation’s population. We also examined dozens of state and local elections where dark money could be linked to a particular interest.

We found that, on average, 38 times more dark money was spent in these states in 2014 than in 2006. That’s an even greater increase than at the federal level, where dark money rose 34 times over the same period, according to the Center for Responsive Politics. Compounding the problem was the growth in “gray money,” spent by organizations that are legally required to disclose their donors but receive their funding through multiple layers of PACs that obscure its origin.

In 2006, 76 percent of outside spending in these six states was fully transparent. In 2014, just 29 percent was, according to our analysis of data compiled by the National Institute on Money in State Politics.

This ability to dominate a race with high stakes at low cost and with no oversight can facilitate corruption.

A Utah legislative investigation found that as a candidate for state attorney general in 2012, John Swallow “hung a veritable ‘for sale’ sign on the office door” when his aide arranged for payday loan companies to fund about $450,000 in dark money ads in exchange for his promise to shield them from consumer protection laws. With voters unaware of this, Mr. Swallow won; he resigned after less than a year in office. Mr. Swallow now faces trial on unrelated corruption charges.

In Wisconsin, an out-of-state company seeking mining business put $700,000 of dark money into ads attacking a legislator who had voted against speeding up environmental review of mine permits. Voters didn’t know that the group paying for ads was funded by another group that got money from the company. The legislator lost her re-election campaign, and the company’s role was only inadvertently disclosed in a later lawsuit.

In Mountain View, Calif., the folksy-sounding Neighborhood Empowerment Coalition spent more than $83,000 in a 2014 City Council election that hinged on land use and housing policy. This was more than half of what all nine candidates spent, combined. Only after the election did the public learn that the coalition was funded by a PAC tied to the nation’s largest property owners association, bent on heading off rent control. “They did not identify who they were and did not identify the issue that led them to support those candidates,” Councilman Lenny Siegel told us. The newly composed council declined to pursue rent control.

The ultimate cost of elections overrun by hidden interests may be the loss of voters’ faith in the political process and governing institutions.

In 2010, Arizona’s utility commission adopted a program to encourage energy efficiency by consumers and limit the electricity generated by the state’s utility companies. This followed incentives in place since 2006 that encouraged homeowners to use solar power panels. Within a few years a half-million residents had joined the energy efficiency program, and at least 29,000 had solar panels.

When two seats on the commission were at stake in 2014 elections, $3.2 million was spent on dark money ads. That was more than double the combined spending of all six candidates, and almost 50 times the $67,000 in dark money spent in the 2012 election, before the popularity of the solar program was clear.

News reports have indicated that a major source of the money was the state’s largest utility, Arizona Public Service. The commission has shifted from backing solar energy to signaling an openness to increasing solar’s cost to consumers. “The public appears to look upon the commission with suspicion and mistrust because of your alleged campaign contributions,” Commissioner Robert Burns wrote to Arizona Public Service.

Persuading the Supreme Court to overturn recent decisions such as Citizens United, which empowered donors to spend unlimited amounts via opaque business and nonprofit entities, would go a long way toward fixing the problem.

But until that happens, there is evidence that states, through strong disclosure laws and enforcement, can make it very difficult for spenders to conceal their identities from the public, even if they can’t eliminate dark money.

Dark money has risen sharply in Arizona, where legislators had debated slashing disclosure rules since 2010, culminating in removal of state oversight over nonprofits’ political spending this year.

But in California, where disclosure laws are tougher, there has been remarkably little increase in dark money over the cycles we studied, especially considering the high levels of outside spending there.

A major reason is the state’s decades-long requirement that even nonprofits disclose donors for their election spending. In 2014 the state passed a law requiring any group spending more than $50,000 a year or $100,000 over four years on politics to disclose all donors giving more than $1,000 whose funds were used for political purposes. While cases like the Mountain View election indicate that there is room for improvement — especially in ensuring information reaches voters before Election Day — it is only because of California’s strong rules that we know what happened there at all.

California’s success provides a model for much of what a strong disclosure regime should do: close nonprofit loopholes, require that election advertisements bear the names of top funders, make disclosure rules reasonable and proportional to enable compliance and enforce the law.

Americans of all stripes want more of this. A New York Times/CBS News poll last year showed three-quarters of self-identified Republicans and an equal percentage of Democrats supported more disclosure by outside spenders. Recent transparency measures passed in Delaware, Maine and Montana show that voters can turn the tables on special interests by demanding tougher laws and supporting the candidates who will push for them. Without such laws, dark money will continue to skew the outcome of races that hit close to home.

Chisun Lee is senior counsel and Lawrence Norden is deputy director of the Brennan Center for Justice’s Democracy Program at the New York University School of Law.

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A version of this article appears in print on  , Section SR, Page 5 of the New York edition with the headline: The Secret Power Behind Local Elections. Order Reprints | Today’s Paper | Subscribe

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