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Shining Light on ‘Dark Money’

New York Attorney General Eric Schneiderman has announced plans to shed light on the so-called “dark money” groups that spent millions during the 2012 election cycle.

The move follows demands for regulation by good government groups – and by this newspaper.

A proposed rule change that could go into effect by the 2013 elections would force not-for-profit groups that spend more than $10,000 on local and state elections in New York to disclose their donors to the state’s Attorney General.

“There are proposals in Congress to deal with this, they haven’t gone anywhere,” said Viveca Novak, the editorial and communications director at the Center for Responsive Politics. “This is a significant step by a state attorney general to try to address it. New York is just one state, but it’s an important state.”

As was widely noted during the 2012 election cycle, certain nonprofits fall into a quirky regulatory loophole that allows them to make almost unlimited political donations without disclosing where they are getting their money. The phenomenon was the subject of a blockbuster expose by the investigative journalism shop ProPublica, which used the Republican Jewish Coalition as an example of one tax exempt group spending money on the presidential election and not revealing its donors.

In an editorial in the Forward calling for closing the “dark money” loopholes, Jane Eisner highlighted other Jewish groups taking advantage of the loose regulations, including the Emergency Committee for Israel.

Schneiderman’s proposed rule change would only affect groups spending on New York state and local elections. And though it would require groups spending $10,000 or more on those races to file an accounting of its expenditures and the identities of its contributors, all of which would be made public, it will leave some loopholes of its own: organizations can apply for a waiver of disclosure if they believe disclosing a donor’s name would “cause undue harm, threats, harassments or reprisals,” according to the Attorney General’s statement.

The proposal is open for public comment over the next few months. The Attorney General’s office said in a statement that it expects the regulations to in effect at least in part by the 2013 local elections, and in full by the 2014 state races.

Rep. Jerry Nadler, who represents parts of New York City, praised the regulations. “Congress needs to catch up to what New York State is doing and require full disclosure of electioneering activities by nonprofits,” Nadler said in a statement.

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