Legislature should close dark-money loophole

Settlement means we may never know who spent $264K on PRC amendment advertising

In 2019 the Legislature enacted new safeguards within New Mexico’s Campaign Reporting Act (CRA) to protect New Mexico elections from the influx of dark money, i.e. political spending by nonprofit organizations not required to disclose their donors.

The new provisions in the CRA require those making specified independent expenditures — defined by New Mexico as advertisements that are “susceptible to no other reasonable interpretation than as an appeal to vote for or against a clearly identified candidate or ballot question” — to disclose the names and addresses of their donors. All good, right?

Fast forward to 2020, and we see what happens when smart Washington lawyers seek to protect their clients from disclosing donors to super PACs.

In what the N.M. State Ethics Commission (NMSEC) came to call a “loophole,” the Campaign Reporting Act also provides that, “a contribution is exempt from reporting … if the contributor requested in writing that the contribution not be used to fund independent or coordinated expenditures or to make contributions to a candidate, campaign committee or political committee.”

In a Sept. 21 press release, Ethics Commission announced it had reached a settlement with the Committee to Protect New Mexico Consumers (CPNMC), a group that was found to have spent more than $264K on advertisements supporting a 2020 ballot question, Constitutional Amendment 1, that would change the composition of the Public Regulation Commission (PRC). The committee’s mailers were determined to be “independent expenditures” requiring disclosure to the secretary of state. Still good, right?

Wrong. The Washington lawyers revealed that donors to the CPNMC had requested in writing that contributions not be used to fund independent expenditures. Thus, argued the lawyers, even though the CPNMC had used donor monies for an independent expenditure, the signed agreements with donors not to spend on independent expenditures insulated the donors from disclosure. Clever!

The NMSEC, rather than undertake what could have been protracted, costly litigation, and promising to work with legislators to close the dark money loophole, agreed to a settlement. CPNMC was required to disclose details about its spending on the mailers — amount and vendor — while the NMSEC agreed to forgo further investigation or enforcement actions against CPNMC about the mailers. While the NMSEC’s settlement seems prudent, legally and fiscally, it left voters in the dark as to who was financing this large money push to convince voters to approve the constitutional amendment changing PRC commissioners from elected to appointed officials.

Interestingly, CPNMC board member Noah Long, the director of the Natural Resources Defense Council’s Western Climate and Clean Energy Program, told both Albuquerque Journal and Associated Press reporters that the group will disclose its donors in post-election reporting.

Does this mean that when the required final general election campaign finance reporting is released in early January 2021 voters will finally know the names and addresses of those contributing to the CPNMC’s mailer?

This disclosure was not part of the NMSEC’s settlement, so it will happen only through the committee’s good faith or through public pressure. And, just because it comes too late for voters to judge what might be behind the CPNMC’s push for passage of the measure leading to an appointed PRC, and what benefits might be reaped by whom, (it) doesn’t mean all stakeholders — legislative, executive, advocacy groups, citizens — ought not to demand it.

While we can’t change the past, we encourage the legislature to decisively close the loophole exploited by the CPNMC and strengthen New Mexico’s campaign finance law. It’s past time that influential dark money flooding into and through New Mexico politics and laws be brought to light!