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What is ‘Dark Money’ in Local Politics?
A perspective from Terri Buckner
To understand how dark money plays in a local election, you must be loosely familiar with two types of organizational structure: the Political Action Committee (PAC) and the non-profit type called 501(c)(4) or social welfare organization.
A PAC is created when two or more individuals or an organization join together for the purpose of supporting or opposing the nomination or election of one or more clearly identified candidates. Once their organizational paperwork is filed with the State Board of Elections, they may accept contributions in the form of cash or in-kind expenditures for goods such as campaign signs and/or services, including fundraising, expert consultation, advertising. A legally registered PAC is required, by the state law, to disclose all contributions and expenditures. PACs are not tax-exempt.
North Carolina imposes strict regulations on PACs including periodic financial reporting to ensure that voters have the ability to find out who is contributing and how much ($6400 cap).
The rules for a 501(c)(4) are established by the IRS which grants tax-exempt status. The 501(c)(4) “must not be organized for profit and must be operated exclusively to promote social welfare.” According to the IRS, “social welfare organizations may engage in some political activities, so long as that is not its primary activity. However, any expenditure it makes for political activities may be subject to tax under section 527(f).”
For purposes of this 2023 local election in Orange County, Chapel Hill Leadership (CHL-PAC) is the Political Action Committee tied to CHALT (Chapel Hill Alliance for a Livable Town). Their most current filing (a period of 7/1/2023 through 9/26/2023) reported a beginning balance of $553.97, revenues of $8,170, and expenditures of $1,241.24 for a fund balance of $7,482.73.The NEXT Chapel Hill Action Fund is registered as a 501(c)(4) and has filed no voluntary financial reports with either the state or the county. However, the NEXT organization reports via their website, “In this upcoming 2023 election cycle, we expect to spend about $4,000 to print and mail postcards of our endorsements.” That funding comes from 60 donors.
Shameful Nuisance, Inc., the parent organization behind Triangle BlogBlog, is another 501(c)(4) active in Orange County politics. They do not voluntarily disclose their fund balance or the number of contributors as NEXT does. Neither NEXT or Shameful Nuisance/Triangle Blogblog discloses the names of their donors or the amount of individual contributions.
That brings us to dark money, or spending where the names of those contributing money to an organization that is actively engaged in a political campaign. But it’s not just the anonymity of the donors, it’s also how much is being contributed by an individual donor or a PAC and how much is being spent and for what purpose.
According to the Brennan Center for Justice, “Dark money at the state and local levels frequently flows from special interests with a direct and immediate economic stake in the outcome of the contest in which they are spending, in contrast to what is often portrayed as the more broadly ideological outside spending at the federal level.”
Despite all the hoopla about a potential new PAC that failed to transpire last month, Chapel Hill and Carrboro elected officials and incumbent candidates (minus one) have failed to call out the dark money contributors in this recent election cycle. In fact, certain candidates have welcomed the support of one such group as a fundraising tool. Why would a candidate accept the support of a dark money group but claim that a transparent, regulated PAC is going to “end fair elections in town”?
The bottom line is that a PAC is highly regulated and a 501(c)(4) is set up to avoid sunshine when it comes to political activity. Who you gonna trust?
Disclaimer: I am not a member, financial contributor or advocate for CHALT, Next or Shameful Nuisance/TBB. I am also not an expert on campaign finance and can only attest to having done my best to understand this issue with the help of state and county elections officials.ON
“Viewpoints” on Chapelboro is a recurring series of community-submitted opinion columns. All thoughts, ideas, opinions and expressions in this series are those of the author, and do not reflect the work or reporting of 97.9 The Hill and Chapelboro.com.
Everyone who reads this should know that a CHALT coordinator posted the addresses of TBB’s editors online: https://triangleblogblog.com/2023/04/23/a-response-to-a-chalt-coordinators-posting-our-addresses-on-nextdoor/
CHALT’s nastiness is why donors to Triangle Blog Blog need to be kept anonymous. Lots of grad students and early career people that support TBB don’t want to make themselves targets for doxxing.
Everyone who reads Andrews comment above should know that the documents containing addresses were public documents, voluntarily completed by TBB editors to set up their dark money site. The addresses included in those documents are accessible just by knowing the names of the TBB board of directors. They are easily found via a simple Google search and are not legally defined as private information. Furthermore, by providing the names of “potential” donors in one of the TBB unverified “scoops,” those same editors promulgated an untruth on this community that has disrupted this election in a more malignant way than any I’ve encountered in the many years I have lived here. That’s why I decided to send this article in for publication.
1. As you confirmed, CHALT posts their opponents’ addresses. Triangle Blog Blog doesn’t. We all know which behavior is more dangerous.
2. The reason you wrote a post complaining about dark money is because TBB exposed a $120,000 PAC to manipulate Chapel Hill’s elections. If you were really concerned with dark money, you would be thanking TBB for shedding light on $120,000 of dark money in Chapel Hill.
Actually, I wrote this article because money has played an increasingly dark role in local politics. It first became an issue to me back around 2007. Every year, it seems to get worse and I would hate to see this community follow the national trajectory.
Terri has written a lot about this on Facebook, so I’m pasting what I wrote there. I’m one of the board members of Triangle Blog Blog, a local civics blog that launched in March 2022 and covers a variety of topics. You can also read all of this on our about page, which is here: https://triangleblogblog.com/about/
We’re a 501c4, like the AARP, the ACLU, and March for Our Lives. Planned Parenthood and the Sierra Club both have 501c4s. It’s really common. A 501c4 just endorsed Searing and his slate of candidates.
We formed as a 501c4 because we felt that structure was best aligned with the work we were already doing – we have clear progressive policy positions and wanted to be able to advocate for abundant housing and walkable neighborhoods and a government that listens to those who have historically been left out of local decision-making. (This is all on our about page.)
We also wanted to protect our donors. In 2023, our board was doxxed on NextDoor by a leader in CHALT, the group backing Adam Searing — our addresses were posted, along with our names. Last week, we were again doxxed by a mayoral candidate. It was, again, scary.
We maintain a strict firewall between our finances and our writers so that donations do not influence what we write about. But we know from our treasurer that many of our donors are graduate students and faculty at the earliest stages of their career. Doing this work in a college town where many people work at the same institution is hard, particularly when it may affect career trajectories. We keep our donors private to protect them and to ensure that they are not harassed.
What we can tell you is this: the vast majority of our donors give in the $20-50 range. All but two of our donors live in Chapel Hill or Carrboro – the other two live in Durham and Raleigh (places we occasionally write about). A lot of people seem to really like what we are doing, which is amazing. We hope they continue to do so, but if they are trying to buy influence they will be sorely disappointed: we A) don’t know who they are, and B) write what we want.
How many out-of-town developers have donated to you?
Our treasurer keeps track of the occupations of people who have donated to us. Zero donations have been received from out-of-town developers.
How many developers who live in Chapel Hill or Carrboro have donated to you?
Our treasurer keeps track of the occupations of people who have donated to us. Two people are local developers. We don’t know who they are. According to our treasurer, who keeps track of donations, they have given less than $200.
How do you handle fiscal responsibility if you don’t know donors?
Here’s how it works: Our treasurer has the passwords to an email account and PayPal. We don’t. Each month, we get a recap of total amounts and averages — but don’t know specifics. If we have a question (like the ones above) we have to ask him.
We work in the same way NPR does. From NPR: “We’ve often spoken of a “firewall” that separates NPR’s journalists from our funders. Properly understood, the firewall is a useful metaphor. In engineering, a firewall isn’t an impassable boundary, but rather a barrier designed to contain the spread of a dangerous or corrupting force. Similarly, the purpose of our firewall is to hold in check the influence our funders have over our journalism.”
NPR follows a code of ethics, which includes accuracy and fairness. Here’s the fairness code: “To tell the truest story possible, it is essential that we treat those we interview and report on with scrupulous fairness, guided by a spirit of professionalism. We make every effort to gather responses from those who are the subjects of criticism, unfavorable allegations or other negative assertions in our stories. What we broadcast and put online is edited for time and clarity. Whenever we quote, edit or otherwise interpret what people tell us, we aim to be faithful to their meaning, so our stories ring true to those we interview. In all our stories, especially matters of controversy, we strive to consider the strongest arguments we can find on all sides, seeking to deliver both nuance and clarity. Our goal is not to please those whom we report on or to produce stories that create the appearance of balance, but to seek the truth.”
TBB prefers to sling mud and then call it truth as when they accused one of the candidates of being in the pocket of wealthy neighbors before they bothered to talk to the candidates themselves.
Kramer and NEXT/TBB’s numbers don’t add up.
First, it’s clear that TBB and NEXT are the same organization with two 501c4s. Both 501c4s refuse to disclose their source of funding or their expenditures.
We do know Kramer and the NEXT media outlet TBB said they were going to send $4,000 worth of postcards. These postcards are already appearing around town. They previously said they had 60 supporters which they’ve now softened to “a lot” of supporters presumably for NEXT 501c4 and their puppet organization TBB.
Each supporter supposedly contributing somewhere in the $20-$50 range.
A 501c4 cannot spend more than 50% of its funds on political activities.
If NEXT dark money organization and its public media dark money arm TBB split the cost of that $4,000 mailing, they collectively had to raise at least $8,000 this year.
Sixty donations at $50 is only $3,000 of which only $1,500 could be used for political purposes.
Either the NEXT/TBB dark money nexus has broken the 50% rule or they are being dishonest, again, about their funding and operations.
Did these “two” joined-at-the-hip, organizations run by the same out-of-towners raise $8,000? Did they only raise $3,000? Did they raise $4,000 and break the 50% rule?
Who is paying for their targeted mailing? Do their slate of candidates, tainted by dark money support, repudiate the overall tenor and the specific operations of what we now know to be a developer supported group?
Unlike the mythical PAC they manufactured from one email exchange, these are the cold hard numbers.
Looking forward to WCHL, The Daily Tarheel, The Herald Sun and IndyWeek digging into the obvious problems with NEXT/TBB, their opaque operations and, maybe even, the fundamentally disinformative way they operate.
Hello! A few points, Mr. Redacted:
1. NEXT and Triangle Blog Blog are two separate organizations. You are welcome to read about Triangle Blog Blog on the Secretary of State website, where our articles of Incorporation were filed.
We have no visibility into their operations, just as they have no visibility into ours. Our boards are completely separate. Sometimes, some of us will go to one of their happy hours where people discuss things like improving bike lanes or increasing the number of public bathrooms for homeless people to use or how to make it easier for kids to walk and bike to school.
2. The only visibility we have into NEXT’s finances is from what they put on their website: https://nextnc.org/about/financial-information/
3. NEXT has two organizations, exactly like the Sierra Club and Planned Parenthood. The majority of their work is through their 501c3. Their action fund is the 501c4.
4. Triangle Blog Blog does not plan to send any endorsement postcards.
5. All of us live in Chapel Hill and Carrboro. Not sure what out-of-towners you’re referring to.
6. Tar Heel is two words.
Kramer, you personally spent a year tearing down Local Reporter, repeatedly mischaracterizing as an arm of CHALT, based on the flimsiest of assertions.
Based on your own criteria, the connection between TBB and NEXT is direct and incontrovertible.
Are you saying, you have not written any of the material appearing on NEXT’s website? That you have not helped with their messaging or any of their efforts?
Why is it that Jess Anderson had a fund-raising appeal all ready to go minutes after the TBB published the “scoop” about a mythical PAC that you manufactured a story about based on a email?
What about all the other TBB/TBB developer candidate slate coincidental news releases?
As far as NEXT, if you’re really not associated with NEXT 501c3 or 501c4 (hard to tell which one does what), why haven’t you turned your attention to their apparent fund-raising problems?
You and the TBB gang milked the hell out the hypothetical PAC story but can’t find anything to say about NEXT, a dark money organization, that has exceeded, by their own claims, the 50% cap on political expenditures?
The authors of TBB are either rank hypocrites or prone to what psychologists call the fundamental attribution error. Their stock in trade is to portray the actions of those with whom they disagree in the most negative possible light without considering that something that appears nefarious may have an entirely benign explanation. Their recent blog post about an Umstead Park event is a case in point. However, they are at pains to assure us that their own nefarious-seeming behaviors are entirely innocuous, which we would realize if we just understood the context. I’m willing to grant that TBB’s nefarious-seeming behavior may in fact be innocuous. Are they willing to do the same?
So…its arguably a pro or con how well any of these groups organize and message depending on whether you agree or disagree with the policy they are trying to advance. Its “great” if you support them and sinister if you dont. That’s an easy out. We know more or less whom represents each locally and y’all can duke it out on the merits of how ethically you have been running your respective shops. The election isn’t about that and I dont think that is the biggest issue. Likewise, this comparison to “dark money” similar to the massive hidden national forces at work is also a red herring in my book because, again, we know who more or less who is directing these organizations even if we do or do not know who funds each dollar. Indeed the value of your groups is that you are part of the community each in your own way.
To me, the big red flag is how straight forward OR NOT the aligned candidates are about what they actually are advocating for. My personal observation is that CHALT and the “CHALT candidates” are hiding behind the fig leaf of the secret black box. That is, for the 8 or so years that CHALT has been on the scene, the talking points are how all things Chapel Hill should be high quality but virtually nothing coming down the pipeline in 8 years has managed to live up to that standard. Some how there is always some other way and if we would just “do it right” then CHALT would support it. Yet that “other way” is always illusive and vague. That is just to coincidental to not be a pattern of just plain old anti-growth…or at least CHALT leadership needs to acknowledge it sure looks like a pattern. By now there is a real burden on CHALT to get real and disclose exactly what they WOULD support to CONCRETELY advance the very real needs and goals of a growing dynamic community (besides holding the line on EVERY NEW PROPOSAL). The vagaries of “we want a great Chapel Hill for everyone” coming from candidates aligned with CHALT doesn’t address that 8 year history nor does it explain that the two biggest talking points from CHALT are actually anti-growth: 1) Legion Rd should be nothing but a park (even though the proposed site plan has a great mix of features INCLUDING a park!) and 2) any allowances for more varieties of housing in residential neighborhoods is “bad” (while we also bad mouth the Blue Hill district for just being plain old “too much” or “just not right for Chapel Hill”). I think its fine if candidates know what they are against as well as what they are for…but I think a lot of us are out of patience waiting to hear the “for” part in any detail. I dont think NEXT and TBB are being driven by “dark money”, they are being driven by folks ready to get past the smoke screens…
You should probably read or listen to the candidates you perceive to be aligned with CHALT before you accuse them of not knowing what they want. Curiously enough, what they have all said they want aligns closely to what the town’s consultant, Jennifer Keesmaat, has proposed. They want development that is human scale, woven into areas that disrupt existing neighborhoods, where there is open/recreation space nearby. They don’t want Blue Hill; they want UNC to work with them to provide housing since UNC has much more land, close to town, than can be had without teardowns. The town council agreed to two pilot projects identified by the consultant BEFORE they voted to eliminate single family zoning. Those pilots were supposed to be proof of concept on placement, collaboration, and affordability. It’s hard to swallow that the majority of the council wants to act in opposition to what their very highly paid consultants have recommended.
That’s where I am stumped really. If there is to be no concentrated high density and no “disruption” to existing neighborhoods…doesn’t that mean there is to be…virtually nothing? If adding duplexes to residential isn’t human scale enough, than the only thing left is single family, right? But every where in Chapel Hill is already an existing neighborhood and every single family lot has a single family house on it already…so???
Look, I am fine with candidates running as pro-neighborhood or pro-preservation or however they want to frame it. Why not do that in the light of day? Why keep saying they are also pro-affordable housing or pro-inclusion? I dont hear anything in the “for” category from them that is a real do-able thing to support either of those, just aforementioned vague talking points that dont actually translate into real options (which a candidate either already knows or already should know…). That’s why i say its a secret black box; somewhere there are these amazing projects that are just the way these candidates would support…except there is no such thing. The pro-CHALT platform leaves ANY new growth to thread a tiny tiny TINY needle. Not being forthright about that is the ethical concern I have about the upcoming election. The CHALT candidates on one hand are talking about having the deepest, most informed decision making for all Town related decisions as the the only acceptable way to do business, but the reality is they want to over turn multiple Town decisions made that were made with EXACTLY that level of detail and deliberation, they just dont agree with them. So they are perfectly fine campaigning to essentially over-turn several years of the exact high-quality type work they advocate in an emotional up or down vote by the average citizen using their average level of whatever they happen to have heard about the issue. I am fine with a “let the people decide” approach…but then drop the pretense that somehow all the work done to-date wasnt somehow perfect enough. This is just flat out “we dont agree so we want to stop it”…perfectly legit but lets be honest with each other.
Calling them CHALT candidates is just part of the TBB propaganda. NEXT is the only local group that has endorsed any candidates. Have you met any of the people you are criticizing? What’s are the plans you hear from the ones you are supporting that you find so enticing?
Jennifer Haasmaat’s recommendation is the start with two pilot projects–projects that were unanimously adopted by the Council and are supported by all of the candidates. The intention is to build a model for the community to see before taking any other drastic steps like the current mayor wants to do south of Southern Village. If that model works–if the infrastructure costs can be shared by the town (through grants), the developer, and UNC–then it keeps the cost of the housing more affordable. It will prove the concept she is proposing. Again, Elizabeth and the other candidates running with her support that model. I’m sorry you haven’t read that, but consider just how little any of us have heard without having to dig pretty deep and filter out a lot of BS.
I get this feeling that you are criticizing 4 individuals because you’ve “heard” through questionable sources that they oppose development. I challenge you to try and talk to them in person and ask your questions directly.
Sounds like you want them to lie and say they have answers to the unsolvable problem of affordable housing. Every community in this country has an affordable housing problem and there are no solutions right now. The best option lies in pilot projects like the Keesmaat group is recommending and which Searing and his slate support. By contrast, the other group just wants to keep doing what we’ve all seen doesn’t work. If that’s your idea of a brilliant solution, then we’ll just have to disagree.
In the meantime, I know exactly where the funding for Searing and his slate comes from. I can’t say the same for those who are being supported by through NEXT/TBB–the group that wants to keep doing the same thing that’s been underway for the past 8 years that benefits no one but the developers. The town doesn’t have more money, the people who live in those new units are cost burdened thanks to the high rents, and we have a net loss of affordable housing units. If that’s your idea of a brilliant solution, then we’ll just have to disagree.
Question for Terri Buckner. What are your thoughts about the role of Shameful Nuisance (Triangle BlogBlog) and their involvement in the Orange County School Board elections? and the article by Martin Johnson “Looking at the network of conservative groups involved in the Orange County School Board race”. I do not believe that the article is not political.