Why should we care about dark money?

If there’s one thing that’s dominated my reporting over the eight months I’ve spent with New Mexico in Depth, it’s dark money; it was the subject of my first story, and almost half the stories I’ve reported since then. Bryan Metzger

For the uninitiated, “dark money” typically refers to outside spending by nonprofit entities that are not obligated to disclose their donors, at least under federal law. In 2019, New Mexico passed a law to force these kinds of organizations to disclose their donors, but in 2020, two groups challenged the law rather than comply with it, underscoring the difficulty in bringing to light what special interests are behind political spending. 

This morning, we published a story that took a deep dive on one of these groups– the “Committee to Protect New Mexico Consumers”– which spent $264,000 advocating for the passage of a constitutional amendment to change the state’s Public Regulation Commission (PRC) from a five-member elected body to a three-member appointed body, beginning in 2023. It was the first time I’d really attempted to get to the source of a dark money group’s funds, rather than simply report on a lack of disclosure. What we found were some strange bedfellows.

Dark money group pushing PRC reform tied to major oil company

Exxon Mobil Corporation contributed to a dark-money group that supported a successful November referendum reforming the state’s Public Regulation Commission (PRC), according to a campaign finance report filed by one of its lobbyists. One of the largest oil and gas producers in New Mexico, the multinational conglomerate gave at least $10,000 to the “Committee to Protect New Mexico Consumers,” a nonprofit that spent a quarter of a million dollars touting the merits of a constitutional amendment, which eventually passed handily. The contribution can be found in an Oct. 7 report filed by Exxon Mobil lobbyist Deanna Archuleta. The Committee to Protect New Mexico Consumers refused to disclose its donors when the State Ethics Commission (SEC) demanded it do so despite new campaign disclosure laws requiring groups like it to say where the money they spend on political campaigns comes from.

Lawmaker, advocates pursue greater sunshine from lobbyists

Lobbying at the Roundhouse is a little bit different from other states. Put a crop of unpaid “citizen legislators” and well-paid professional lobbyists in a building together, and a certain culture develops in which lobbyists become key sources of information for lawmakers. “When I have colleagues that come in here from other states, or from the national level, they’re amazed at the degree of access that folks have here, and it’s more of an informal kind of a situation than it is at a lot of other venues,” said Dan Weaks, a professional lobbyist. In contrast to unpaid, understaffed legislators, lobbyists—many of whom have significant monetary resources at their disposal—can play an outsized role in the policymaking process, said Sen. Jeff Steinborn, D-Las Cruces, who has witnessed employers hire as many as 10 lobbyists for a single issue. 

“They had a lobbyist posted at every elevator.”

Another senator didn’t mince words. The system we have “empowers lobbyists over the people’s elected representatives, and that’s a pretty dysfunctional system, in my view,” said Sen. Jacob Candelaria, D-Albuquerque.

Nonprofit groups put new independent expenditure law to the test

After a decade-long effort, New Mexico lawmakers passed new campaign reporting requirements in 2019 to force nonprofit groups, which can spend money on political campaigns without registering as political committees, to disclose their spending as well as the names, addresses, and contribution amounts of their donors who fund such “independent expenditures.” 

Outside campaign spending by groups or individuals not affiliated with a particular campaign have long been a target of reformers seeking to rein in the influence of money on politics.   Without disclosure, nonprofits can spend unlimited amounts of “dark money” without the public knowing where the money comes from. In 2020, two nonprofit groups immediately put the new law to the test by refusing to disclose donors despite enforcement efforts by both the Secretary of State and the New Mexico State Ethics Commission. “I’m not at all surprised,” said Sen. Majority Leader Peter Wirth, D-Santa Fe, who championed the transparency measure for a decade. “Anytime you’re trying to rein [dark money] in, you know, there’s going to be groups that are going to push the limits.” 

The challenges by the nonprofit groups represent a key test for both the law itself and for the enforcing power of the state’s newly created ethics commission, also established in 2019 after several decades of ongoing debate and setbacks.Approved by voters and given powers by the Legislature, the commission can subpoena records and enforce state statutes that cover campaign spending, lobbying, and government conduct.

With starker rural vs urban divide and rise in independents, New Mexico follows national trends

At first glance, the 2020 elections produced a series of largely predictable results. Democrat Joe Biden garnered New Mexico’s five electoral votes, winning by almost 11 percentage points, slightly improving on Hillary Clinton’s eight-point margin in the state four years ago while winning the same 14 counties. Democrats in the state Legislature retained their sizable majorities, even as a number of moderate and conservative Democratic senators were replaced by progressives. And while Republican Yvette Herrell carried the state’s more conservative 2nd congressional district, ousting Democratic incumbent Xochitl Torres Small, her win wasn’t surprising given that since 1981 Democrats have held the seat for a total of four years. 

But look closely, and the 2020 election results plus long-standing population and voter registration shifts over the last decade tell a story of a state in the throes of political trends sweeping across the country. There’s a growing divide between rural and urban New Mexico, with a population shift to urban centers that comes with an increasingly stark political flavor.

Modest sunshine still leaves campaign cash in shadow

Since New Mexico enacted a new disclosure law last year, more than $800,000 in political spending has been publicly reported by nonprofit groups that in the past would have remained largely hidden. It’s a change that Secretary of State Maggie Toulouse Oliver calls “a huge victory.” But Austin Graham of the Campaign Legal Center, which advocates for tighter regulation of money in politics, is more reserved: “What’s on the books in New Mexico is not the most cutting edge, but it’s undoubtedly a big improvement from the last decade.”

The New Mexico experience illustrates that improving the transparency of how campaigns are financed can be done, but making progress often requires incremental steps that take a lot of time. What has happened in New Mexico is an example of what states across the country must grapple with when they seek to slow the influence of money over their own politics, at a time when federal regulation of presidential and congressional elections has shriveled. 

An ocean of money still floats through the state’s elections while remaining out of public view — it’s spent on mailers and advertising that blanket television, radio and social media as elections near — because the new law didn’t strengthen donor disclosure requirements for political action committees.More than $4.8 million in spending on campaigns across the state this year came from PACs whose donations are very difficult if not impossible to trace to their original source, according to an analysis by New Mexico In Depth and The Fulcrum. That’s because their donors often are nonprofit groups or other PACs, so the only way to learn where the money originally came from is to find out the contributors to those other groups. Finding out who gives to nonprofit organizations — so-called “dark money groups” — can be next to impossible, because for the most part they aren’t required to identify their own donors.

Democrats dream of expanded majority in State Senate

In the wake of a “progressive wave” in June’s Democratic primaries that swept out of office a group of powerful incumbent Democrats, the state Senate will look very different come January. The wins could help progressive Democrats advance key initiatives, like tapping the Land Grant permanent fund for early childhood programs or getting rid of a criminal abortion law on the books since the 1960s. 

But first, the victorious challengers must win on Tuesday or other closely contested seats largely within the Albuquerque metro area must flip if Democrats want to strengthen their 26-16 advantage in the chamber. 

New Mexico In Depth identified 10 Senate districts in which the difference between registered Democratic and Republican voters is below 4,000. We then charted out candidate spending for each race, as well as the level of in-kind contributions for each candidate. The in-kind contributions reflect spending by party leaders on behalf of the candidates, who then included the value of that spending in their own campaign reports. Four of the districts have been in Democratic hands prior to 2020, while six have been held by Republicans.

PACs and nonprofits fuel 2020 elections

As is the case every year, the month or so before election day is one of the busiest of the year for both political contributions and spending. Voters begin to tune in, early and absentee voting starts, and candidates make their final pitches to the electorate. Political action committees (PACs) and other groups spend considerable amounts to influence election outcomes. This year, even with a raging pandemic, those dynamics have held. Here are the top 20 groups raising money during the Third General Reporting Period, which covered October 6th – 27th.  Political action committees or independent expenditure groups have raised an aggregate sum of $8.3 million since June.

Spending in New Mexico’s 2nd district congressional busts into stratosphere

This year’s rematch between Democrat Xochitl Torres Small and Republican Yvette Herrell in New Mexico’s second congressional district is one of the most closely-watched in the nation, generating tensions within the state’s oil and gas industry and tens of millions in outside spending. Roll Call has identified Torres Small as one of the 10 most vulnerable House incumbents up for re-election this year. The respected Cook Political Report rates the race as a tossup. 

At this point, candidates and outside groups have spent a combined sum exceeding $30 million. Spending in 2018 approached $14 million, in a year when across the country record spending was recorded. According to Matt Reichbach at the New Mexico Political report, the New Mexico record occurred in the 2006 race for New Mexico’s 1st congressional district seat, at $14.8 million.

Oil and gas support for Torres Small exposes internal divisions

Oil and gas infrastructure on New Mexico’s eastern plains. Marjorie Childress/NMID

Dressed in denim on a windy day in front of an oil and gas rig, Xochitl Torres Small looks into the camera and says, “Washington doesn’t get us,” then tells viewers she fought to get workers the coronavirus relief they deserve. 

The ad is just one of many in which Democrat Torres Small is positioning herself as an ally of oil and gas this election year as she strives to win a second term in New Mexico’s southern congressional district, one of just 26 of 435 House races across the nation declared a tossup by the respected Cook Political Report. It’s New Mexico’s most competitive high-profile contest. 

Two years after Torres Small beat former Republican state lawmaker Yvette Herrell by fewer than 4,000 votes out of nearly 200,000 cast, the two women are facing off again in 2020, and Torres Small is making sure to stress her oil and gas bona fidesOil and gas money powers the economy in the 2nd Congressional District and generations of families have come up through the oil patch in a solidly Republican swath of counties in southeast New Mexico. 

Xochitl Torres Small 2020 social media ad claiming her support for oil and gas workers. The first-term Democrat insists she would not vote to ban fracking, a drilling method that has greatly expanded U.S. fossil fuel production and flooded New Mexico with revenue before the pandemic crippled the state economy. Advocates who want to ban the procedure, which injects chemical laden water at high pressure into underground rock formations, say fracking threatens human health in addition to increasing greenhouse gas emitting fossil fuels.