Texas’ campaign finance regulator is set to shine a light on secret spending in state elections.

Will Texas Stamp Out Dark Money?

By David Saleh Rauf

The Texas Ethics Commission in a unanimous vote Wednesday approved a new regulation to require politically active nonprofits to start disclosing donors if they spend more than 25 percent of their annual budget on politicking.

The measure takes aim squarely at so-called dark money groups that are allowed under federal rules to play in the political arena without having to disclose where their money comes from.

“In Texas, where there are no limitations on contributions or no limitation on expenditures, disclosure is the only protection the public has,” said commission Chairman Jim Clancy, who was appointed by Gov. Rick Perry.

The move marks the first-ever regulation of dark money in Texas. Several other states — including California, New York and Utah — have put in place measures of their own to bring secret campaign cash out of the shadows.

But the Texas regulation comes just months before the Legislature convenes, teeing up a new fight on the issue after Perry vetoed a dark money disclosure bill last year.

Anonymous campaign cash from politically active nonprofits that don’t disclose the identity of donors represents a tiny fraction of the hundreds of millions of dollars flowing into Texas elections, according to state data.

Yet the issue has been thrust to the forefront of campaign finance reform in Texas more than four years after the U.S. Supreme Court gave corporations the green light to spend unlimited sums on ads and other political tools.

It’s also become a political lightning rod: Conservative lawmakers and activists have taken to criticizing the commission as overstepping its authority for diving into the topic.

“The Texas Ethics Commission has moved forward with unconstitutional rules,” said Michael Quinn Sullivan, who heads the nonprofit Empower Texans, the biggest-spending dark-money group in the state.

Even before Wednesday’s hearing, the commission was put on notice last week by one newly elected member of the state senate and five Republican nominees to the upper chamber, who wrote to oppose the regulation. Their message: Back off and leave the issue for the Legislature to handle.

Commissioners addressed some of the public criticism, saying that they are simply following guidance from the Legislature to require disclosure on political contributions.

“We are not dreaming up things to make policy,” said Commissioner Paul Hobby, who will take over as the commission’s new chairman. “We are being urged for all good reasons to make some policy in this area.”

At the heart of the commission’s new regulation is an attempt to determine when a nonprofit’s political activity crosses the line to qualify it as a bona fide political action committee that is required under state law to disclose donors.

Under the rule, a nonprofit would have to start disclosing donors if 25 percent or more of its expenditures can be classified as politically motivated. It also would require disclosure if political contributions account for more than 25 percent of the group’s total contributions in a calendar year.