Privacy bills open the door for more ‘dark money’ in state political campaigns

Investigates

We’ve all seen the attack ads during a political season on TV. Usually the name of a political action committee that paid for the ad is disclosed at the end.
However, millions of dollars also flows into campaigns that are secret — a term known as “dark money.”

Now watchdog groups say two privacy bills before the South Dakota state legislature will make it even easier for dark money to flow into state political campaigns.

KELOLAND Investigates has been looking into the issue of dark money, and the ties to an organization that would benefit from these proposed laws, to Governor Kristi Noem’s campaign.

Governor Kristi Noem backed House Bill 1079, which guards the privacy of non-profit organizations and charitable trusts.


It’s already passed the House. Today a companion Senate Bill, 103, passed through committee. It would keep donors to such organizations secret.
Noem’s attorney was there to ask the committee to pass it.
But there is dark side to this seemingly benevolent privacy effort — that of dark money to political campaigns.

“Looking at the 2020 election cycle at the federal level, we saw hundreds of millions of dollars in dark money flowing into elections through things like contributions, through issue ads, that were not disclosed as political spending,” Anna Massoglia, Investigative Researcher, Center for Responsive Politics.

Proponents of the current state bills say they are needed to protect donors from harassment for giving to the causes they believe in. Others are worried it will open a floodgate of secret money to campaigns.

“I had concerns about why exactly we are passing a law to help charities and when I dug a little deeper, I realized we’re probably making it easier to donate dark money into state races now.”

Democratic Representative Ryan Cwach of Yankton

501(c)(4) non-profits are supposed to operate exclusively for the promotion of social welfare. As long as their primary activity is not political, they can pour money into political ads under the guise of education, skirting campaign finance laws.

“It opens the doors for the these 501(c)(4)’s to spend the entirety of their budget on politicking without ever disclosing their donors,” Massoglia said.

One such 501(c)(4) in South Dakota was formed in 2019, by those close to Governor Noem’s campaign.

Fight for our Future was incorporated by venture capitalist and former lieutenant governor, Steve Kirby, he is also listed as the committee chair for Noem’s campaign for governor. Another Fight for our Future organizer is Brian Prouty who was Bryon Noem’s business partner.

Another founding board member is Suzanne Veenis, who worked for Noem’s congressional campaign.

Page 2 of Fight for our Future
Contributed to DocumentCloud by Angela Kennecke (KELO-TV) • View document or read text

But Govenor Noem says those affiliations aren’t relevant to the current bills going through the legislative session to protect the privacy of donors and non-profits.

Nobody that’s affiliated with the organization that you referenced is affiliated with my campaign today and that’s where that stands,” Governor Kristi Noem said.

Kirby and Prouty were not listed in a 2020 report, but Veenis is still listed as a director.

Governor Noem also argues current legislation isn’t about keeping money spent on campaigns secret.

“The bill you’re specifically referencing has absolutely nothing on campaign finance. All it does is say that the state government has to follow the state law. And what it does is make sure the state government can’t be compelled to release information and violate state law.”

South Dakota Governor Kristi Noem

Critics say the loopholes in campaign finance laws for 501(c)(4)’s make that irrelevant.

“Let’s say Governor Noem recieved a big check from a 501(c)(4); on her state report, she would have to disclose that she received that money, from the 501(c)(4). But the problem there is the 501(c)(4) is really just a pass through entity; it doesn’t really have a purpose other than to hide the donor who gave that money,” Rep. Cwach said.

KELOLAND Investigates reached out to both Steve Kirby and Suzanne Veenis with Fight for our Future, to ask more about the organization and how it spends its donations, but our calls and messages were not returned.

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Continuing The Conversation
See Full Weather Forecast

Trending Stories

Don't Miss!

More Don't Miss