A battle over dark money is brewing in Hawaii and Montana
Political spending that is funneled into elections from a variety of nonprofits is known as dark money — and unlike campaign spending or the money deployed by PACs and super PACs, these sources are not required to disclose their donors. Following the Supreme Court’s 2010 Citizens United decision, which created the country’s current election spending landscape, this has ramped up dramatically, with the 2024 election seeing a record $1.9 billion in dark money spending, nearly double the $1 billion spent in 2020. Now, some campaign finance reformers think they’ve found a state-level reform that can rein in this spending.
Now, campaign finance reformers think they’ve found a solution, and it’s already in place in Hawaii.
A newly enacted corporate law, SB 2471, changes the powers that corporations, or other artificial persons like nonprofits, are granted by the state of Hawaii. In the United States, states grant artificial persons powers as part of an agreement that allows those artificial persons to operate in the state. SB 2471 works by changing the powers that Hawaii grants these entities to disallow them from spending on politics at all.
Tom Moore, a senior fellow at the Center for American Progress and former chief of staff to Federal Election Commission commissioner Ellen Weintraub, told Salon that the law operates upstream of Citizens United by dealing with the powers granted to corporations and other artificial persons, rather than trying to regulate what they can and cannot do with those powers.
“Citizens United said, ‘Hey, if you’re a corporation that is empowered to spend in politics, your right to spend independently in politics can’t be infringed,’” Moore said. “Fine. What this [Hawaiian law] does is say, ‘You know, we’re not going to create that kind of corporation anymore. We’re going to create the kind of corporation that doesn’t have any political spending powers.’ Citizens United and all the other campaign finance cases that the courts have ever decided do not speak to that.”
In his analysis, Moore said this strategy also has a better chance of standing up to scrutiny from the Supreme Court because courts have long upheld a state’s ability to assign powers to corporations operating within their borders, going back hundreds of years.
“They’re gimmicks, and the Supreme Court is not usually impressed by gimmicks.”
“The Supreme Court has said for 200 years that the states can do whatever they want in terms of assigning powers to corporations. They made a fatal assumption in Citizens United that 100 years ago, when states gave away all the powers and said, ‘You can do anything that a human could do,’ they assumed that states would never change their mind on that,” Moore said. “But they never said the states couldn’t change their mind on that, and now they are.”
For example, a recent court ruling in Delaware allowed a change to a town charter that would allow corporations to vote there under some circumstances.
Moore believes that this Hawaiian law, and others like it in the works in other states, have a good chance of surviving at the Supreme Court. However, some critics disagree, saying this legal maneuver is likely to be struck down.
Brad Smith, the chairman and founder of the Institute for Free Speech, a nonprofit that advocates against limits on political speech, including political spending, called the move an “end run” around Citizens United.
“They’re gimmicks, and the Supreme Court is not usually impressed by gimmicks. If you want to do it, you probably have to change the makeup of the Supreme Court or be willing to pack the court and have the political muscle to do it,” Smith said.
In his opinion, the court is likely to see Hawaii’s law as a violation of the First Amendment and is unlikely to look favorably on the argument that these laws deal with powers rather than with rights and that this has to do with how corporations have changed in the past 200 years.
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Smith explained that in the past, states used to create bespoke statutes for corporations to do something like operate a ferry or a toll bridge. These days, however, the laws governing corporations are more uniform.
“That’s just not how corporations operate in the modern world,” Smith said.
Smith added that he suspects the court will see this law as conditioning the creation of a corporation, or similar artificial person, on forfeiting the right of the people forming a corporation to political speech in the form of spending.
“You could not have the state say we’re going to allow you to register your home, but only if you agree that you won’t spend any money from your home equity line of credit on any kind of political activity,” Smith said. “You can’t deny people the benefits of the law based on a determination that they give up some type of constitutional rights.”
Notably, under Hawaii’s law, the people who form corporations are still allowed to engage in political spending; it’s just that the artificial person in question is disallowed. Still, Smith said, he believes the court will still see the law as unconstitutional.
What’s clear is that this new law, or one like it, will likely be headed to the Supreme Court and that’s because there are already other states where people are mobilizing to create similar laws.
Jeff Mangan, the founder and president of the Transparent Election Initiative, is already spearheading an effort to get a similar statute on the ballot in Montana in 2026, telling Salon that the group is only about 1,000 signatures away from meeting the petition requirements, with four weeks left.
“It’s an all-volunteer effort in Montana, we don’t have any paid signature gatherers, and it’s something that hasn’t been seen in a couple of decades here,” Mangan said.
While election finance reform is typically seen as a progressive issue, Mangan said that the initiative has been well-received by Montanans of all political leanings and that he’s optimistic that the measure will pass, though he’s expecting a significant political battle once the ballot measure is approved.
“We start with a very simple question: Do you believe there’s too much money in politics?” Mangan said. “Citizens will say ‘Yes,’ and they may not agree exactly what the solution is, but we can all agree that there’s too much money in politics.”
Mangan acknowledged that the law, if passed in Montana, would be limited in that it only addresses dark money, which is a relatively small portion of political spending. While 2024 saw nearly $2 billion in dark money spent, it saw some $15 billion in outside political spending, according to the election spending watchdog OpenSecrets. Still, Mangan said, he’s already had organizers in all 50 states reach out expressing interest in the project and in starting similar efforts in their home states.
The Montana measure has also already survived a legal challenge at the Montana Supreme Court, which makes organizers optimistic that the law will survive a federal challenge. The court ruled that the law was not an infringement of rights because the law “speaks only to powers, not rights, and it does not expressly revoke any constitutional rights.”
Still, Mangan expects that his group and the supporters of the measure will have to fight tooth and nail to get the bill passed via referendum if and when it appears on the ballot in November.
“It’ll certainly be a David versus Goliath battle. They’ve already started. The Chamber of Commerce and industry groups attempted to stop the initiative right at the beginning of the signature-gathering phase. They sued the state to stop us from gathering signatures. They were unsuccessful,” Mangan said. “We expect litigation at every step of the way through this, not to mention whatever political campaign they choose to throw at us, and I would imagine it’ll be expensive and immense. It almost makes our point. Exactly the reason we need the Montana plan is because of exactly what we’re seeing being thrown against us.”
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