How anonymous donors are dominating the 2022 midterm elections

One of the most powerful groups in the 2022 midterm elections is the Senate Leadership Fund (SLF), the Super PAC controlled by Senator Mitch McConnell (R-KY). The SLF is spending tens of millions of dollars in key races across the country in an effort to return control of the Senate to Republicans. 

In some cases, spending by the SLF dwarfs spending by the actual campaigns. In August, the SLF announced that it was "buying $28 million worth of airtime" to support J.D. Vance, the Republican nominee for U.S. Senate in Ohio, and attack his Democratic opponent, Congressman Tim Ryan. The Vance campaign itself, according to the latest FEC filings, has raised just $3.6 million. (Ryan's campaign has raised $21 million.)

Groups like SLF that make "independent expenditures" supporting or opposing a federal candidate are required to report their spending within 24 hours to the FEC. On Tuesday alone, SLF reported to the FEC that it was spending:

$3,687,764.37 on ads attacking Ryan in Ohio

$2,855,687.98 on ads attacking Senator Catherine Cortez Masto (D-NV)

$3,931,629 on ads attacking Cheri Beasley, the Democratic candidate for U.S. Senate in North Carolina

$4,329,887 on ads attacking Senator Raphael Warnock (D-GA)

On Wednesday, the SLF reported spending $2,377,328 in support of Don Bolduc, the Republican candidate for U.S. Senate in New Hampshire. 

In September, the SLF spent a total of $82 million on campaign ads. Meanwhile, all Republican Senate campaigns combined spent just $33 million.

Where is the SLF getting all this money? We know the identity of some donors who contributed directly to the SLF, including Occidental Petroleum ($4 million), Chevron ($2.75 million), Rupert Murdoch ($2 million), Charles Schwab ($1.5 million), and the American Petroleum Institute ($1 million).

But the largest donor, by far, to the SLF is One Nation. Through June 30, 2022, One Nation donated $33.5 million to the SLF. What is One Nation? Like the SLF, One Nation is run by Steven Law, a former Chief of Staff to McConnell. But unlike the SLF, One Nation is organized as a 501(c)4 non-profit organization. That allows One Nation to keep its donors secret. One Nation can collect unlimited donations from corporations and individuals, keep their identities secret, and then pass the money on to the SLF. 

If the same corporations and individuals donated directly to the SLF, their identities would have to be disclosed. It seems that many supporters of the SLF's efforts are interested in maintaining their anonymity. Donations to 501(c)4 groups are not tax deductible. The only benefit, from a donor perspective, is secrecy. 

One Nation also directly runs advertisements opposing Democratic candidates and supporting Republicans, although it generally does so earlier in the campaign cycle when such expenditures do not have to be reported to the FEC. In May, One Nation publicly announced it had directly booked $43 million in ads targeting Senate candidates in Georgia, Arizona, Nevada, New Hampshire, and Wisconsin.

One Nation continues to spend significantly on ads attacking Democratic candidates online. In September, One Nation has spent about $2.23 million on attack ads on Google and $217,000 on Facebook. The bulk of the money was spent on ads targeting Warnock. One Nation is not required to report online spending immediately to the FEC.   

The One Nation campaign ads and transfers to the SLF are legal, provided that the "primary purpose" of One Nation is not to "engage in political campaigns on behalf of or in opposition to candidates for public office." That means One Nation can funnel 49% of its revenue to the SLF as long as the other 51% is spent on activities that are not expressly advocating for or against a candidate. One Nation achieves this by running extensive advertising campaigns opposing election reform and climate action. 

Republicans have a similar structure to finance their efforts to retake control of the House of Representatives. The dominant Republican Super PAC running ads in House races is the Congressional Leadership Fund (CLF). The top donor to the CLF, by far, is the American Action Network, a 501(c)4 non-profit run by the same people as the CLF. Through September 12, 2022, the American Action Network has donated $38.1 million to the CLF this cycle. The people or organizations that are donating to the American Action Network remain secret. 

This tactic is not limited to Republicans. On the Democratic side, the Sixteen Thirty Fund, a 501(c)4 non-profit, donated $57 million to Super PACs supporting Democratic candidates, including Future Forward USA, American Bridge 21st Century, Priorities USA Action, and Unite the Country. The Sixteen Thirty Fund's direct political involvement appears to have scaled back in 2022, donating about $6 million to date to political committees. The group says it supports legislation that would make political donations more transparent, including bills that would require the Sixteen Thirty Fund to disclose its donors. For now, however, the Sixteen Thirty Fund says it will use "the legal rulebook in place today."