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New York AG Wants To Shine Light On Dark Money

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The proposed regulations, which Schneiderman's office expects to put into effect by early 2013, are aimed in particular at 501(c)4 "social welfare" organizations, which can raise unlimited funds and keep donors secret, and which have spent hundreds of millions of dollars in the last two federal election cycles.

The rules would require all non-profit groups that are registered in the state to include in annual financial reports the percentage of their spending that goes to federal, state and local electioneering. (Any non-profit that raises or spends over $25,000 in New York must register with the Attorney General's Office.) Groups that spend $10,000 or more to influence state or local elections and ballot measures will also have to submit itemized reports, disclosing, among other things, the names of donors who give $100 or more.

"When people spend money to try to influence our elections, the public needs to know where that money is coming from, and how it is being spent," Schneiderman said in a press release. "Nonprofits should not be used to subvert that basic principle. Simply put, transparency reduces the likelihood of corruption."

Defining "electioneering activities" broadly, the proposed regulations cover both explicit advocacy of candidates, parties, or measures, as well as the more squishy category of "issue advocacy" -- for instance, ads that name a candidate but don't call for either his or her election or defeat.

As The New York Times points out, the rules could quickly have a big impact in New York:

Business interests contemplating spending millions to influence next year's New York City mayoral race would be subject to broader disclosure. The rules would also affect any tax-exempt groups that join expected battles over a proposed constitutional amendment that would expand casino gambling, a top priority of Gov. Andrew M. Cuomo; another constitutional amendment that would alter the state's redistricting process; and any local ballot measures regarding hydraulic fracturing.

Schneiderman's proposed rules would make New York the latest state with disclosure rules that go beyond those required by the federal government. Just before election day, California's campaign finance watchdog agency made headlines by using state law to force a dark money group from Arizona to reveal the source of an $11 million donation it made in the Golden State.

According to the Attorney General's Office, the proposed regulations will be published in the New York State Register on Dec. 26. Members of the public will then have until March 6 to provide written comments to the office. Four public hearings will also be held before March 6 -- in New York City, Albany, Buffalo and Long Island -- after which any changes warranted by the public comments will be made, and the regulations then put into effect.

About The Author

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Eric Lach is a reporter for TPM. From 2010 to 2011, he was a news writer in charge of the website?s front page. He has previously written for The Daily, NewYorker.com, GlobalPost and other publications. He can be reached at ericl@talkingpointsmemo.com

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