Show Me the Money: 'Dark Money' and the Informational Benefit of Campaign Finance Disclosure

Abstract

Campaign finance disclosure is under threat. While the Court continues to uphold mandatory disclosure, it has also eviscerated much of the legal justification for it. Simultaneously, gaps in the legal framework mean that some campaign activity is subject only to voluntary disclosure-consider "dark money" groups and unregulated Internet campaign advertising. In upholding the parts of the campaign finance regime that mandate disclosure, the Court has assumed that disclosure provides valuable policy information to voters, but it has not considered non-policy information that voters learn about candidates from the choice to disclose more than is legally required. This article provides new survey and experimental evidence that voters value disclosure of campaign finance information and will reward voluntary disclosure while punishing candidates supported by dark money groups. Voluntary disclosure signals transparency and thus trustworthiness. The importance of the second kind of information has not been previously recognized and suggests a role for voluntary as well as mandatory disclosure.

The Role of Dark Money Disclosure on Candidate Evaluations and Viability

“…One possibility is that it could be harmful to the candidate; that is, being the beneficiary of dark money spending could damage the candidate's standing with voters. Greater transparency in disclosing campaign donors may serve as a useful cue to voters (Wood 2018a), who generally favor more transparent candidates (Wood 2018b). The notion that an outside group has something to hide could lower evaluations of that group-and importantly, the candidates the group supports.…”

Campaign Finance Disclosure

“…In that context, I test experimentally whether campaign finance transparency (or lack thereof ) can cause voters to prefer a candidate who is transparent about her campaign financing to a candidate who receives support from groups who do not disclose their funders. Mere compliance and voluntary disclosure over and above what the law requires, including where the law requires no disclosure at all, can reveal a commitment to transparency that is attractive to voters: Respondents who viewed the analysis of a "nonpartisan transparency advocacy group" about the candidates' and their supporters' campaign finance transparency were 9.5 percentage points less likely to vote for a candidate supported by nondisclosing groups and were 5 percentage points more likely to vote for the more transparent candidate, for a net effect of almost 15 percentage points, suggesting that voters prefer transparent candidates to less-transparent candidates (Wood 2018). Wilcox (2005) predicts that compliance and rewards to compliance would be strongest where competition is highest, a prediction so far not tested.…”