How Over $1 Trillion in U.S. 'Dark Money' Goes Unchecked

After reading an article about Vice President Vance lashing out at the opposing camp, telling them to “keep his wife’s name out of their mouths,” I realized the U.S. midterm elections were getting quite ugly. But another headline caught my eye that same day: at least 1 trillion won (over $750 million) in untraceable funds, known as ‘dark money,’ had been funneled into the election. While negative campaigning is common, the sheer scale of money being spent without any way to identify the sources seemed wrong. I assumed U.S. election funding was required to be transparent, but upon digging deeper, I found that three sophisticated, legal loopholes have already been firmly established to bypass disclosure.

Starting with the numbers from The New York Times

The New York Times analyzed ad spending data, campaign finance reports, and tax records to estimate a total of about $1 billion—roughly 1.37 trillion won. This is only the "verifiable" amount; expenses that are harder to track, such as direct mail, influencer marketing, and hiring canvassers, were excluded, so the actual figure is likely much higher. Notably, four nonprofit organizations linked to the Republican and Democratic parties have been moving over $460 million. While these groups are registered as ‘social welfare organizations’ under tax law, they effectively function as extensions of super PACs, often sharing offices and the same political strategists.

Why does money that “should be public” go undetected?

The basic structure of U.S. campaign finance law is as follows: individuals have a legal limit on how much they can donate directly to a candidate’s committee, and all such contributions must be fully disclosed. That part is transparent. The problem began with the 2010 Supreme Court ruling in Citizens United. The ruling allowed corporations and unions to spend unlimited money on election-related advocacy as long as they don’t coordinate directly with a candidate. This gave rise to ‘super PACs.’ While super PACs cannot coordinate directly with campaigns and have no limits on fundraising or spending, they are required to disclose their donor lists.

This is exactly where the loopholes emerge. The first path uses nonprofits that have no obligation to disclose donors to run ads. Though nominally ‘issue ads,’ most are thinly veiled attacks or endorsements of specific candidates. The second path involves these nonprofits donating to super PACs. While super PACs must disclose their donors, they don’t have to disclose the donors of those donors—meaning the original source of the money remains hidden. The third path is the ‘pop-up super PAC,’ which has become particularly common in this election. The deadline for donor disclosure is three weeks before the federal election; any super PAC formed after this date doesn’t have to disclose its donors until after the election. By the time voters head to the polls, the information is already outdated.

What happened in Maine

The Maine case perfectly illustrates how this system functions. In the race for Republican Senator Susan Collins’ seat—a contest that could decide the Senate majority—a staggering $75 million in dark money ads flooded the state. In a state with fewer than 900,000 registered voters, that equates to over $80 of anonymous spending per voter. Since Collins serves as the chair of the Senate Appropriations Committee, which controls federal budgets, stakeholders have plenty of incentive to invest. Interestingly, while the public is kept in the dark, politicians often find out who is funding them through backchannels. It was confirmed that Collins personally attended a dinner hosted by a nonprofit that was the only group supporting her campaign.

In a House district in the same state, there was interference targeting the opposition. Reports emerged that Republican-linked funds secretly intervened in a Democratic primary to help defeat a stronger candidate, spending nearly $500,000. They used a combination of a super PAC (which discloses donors only after the election) and a limited liability company (LLC) that hid the identities of Republican operatives to run ads attacking the opponent as a “dark money-picked candidate.” The candidate eventually lost by a few hundred votes. This tactic of intervening in the opposing party’s primary to boost a weaker candidate isn’t new to this election; in 2022, Democrats reportedly did the same to Republicans, and this time, the GOP returned the favor.

Dark money is different from small-dollar donations

One thing to avoid confusing here is the small-dollar donation platforms that make headlines in U.S. elections, like the Democrats’ ActBlue or the Republicans’ WinRed. These platforms act as intermediaries, allowing individual donors to contribute a few dollars via credit card directly to candidates, and the donor names and amounts are reported to the Federal Election Commission (FEC). While WinRed acts as a ‘conduit PAC,’ it does not decide which candidates receive the money; it merely serves as a channel that delivers funds exactly as the donor intended. In short, small-dollar donation platforms involve public money, whereas dark money is, by definition, a separate category where the source is hidden regardless of the scale.

However, both systems stimulate each other within the same political ecosystem. ActBlue was the Democrats’ dominant fundraising weapon for nearly 20 years. Without a comparable response, the Trump campaign and the Republican National Committee launched WinRed in 2019. Within 15 months, WinRed processed $2 billion, matching a record that took ActBlue 15 years to achieve. While the competition for small-dollar donations intensifies, the agencies responsible for overseeing campaign finance are losing their teeth. The FEC currently lacks a quorum with only two of six seats filled, and the IRS, following staff reductions, is reportedly unable to effectively crack down on the misuse of funds by nonprofits.

A ruling made for transparency has created opacity

The irony is that the Citizens United ruling itself was predicated on the idea of ’transparency.’ Justice Kennedy, writing for the majority, argued that if voters knew who was funding which politician, it would serve as a sufficient check. Sixteen years later, the reality is the exact opposite. A campaign finance expert at the Brennan Center described this midterm election as “likely the most opaque midterm since Citizens United.” Perhaps the most bitter aspect of this story is that a structure where those who don’t want to be transparent effectively don’t have to be, was born from a ruling intended to ensure just that.

Of course, there are voices defending anonymous donations. A former Republican chair of the FEC argues that the U.S. has a tradition of respecting anonymous political speech, dating back to the Federalist Papers, and that it is especially important for those with minority opinions to have the ability to speak anonymously. In fact, some Democratic donors privately mention that in the current climate, where they fear the government might target those with opposing political views, anonymous donations act as a shield. It is only fair to consider these perspectives before labeling dark money as inherently evil.

Comparison with South Korean campaign finance laws

Looking at this structure, I wondered why such controversies are relatively less common in South Korea. South Korean political funding law fundamentally prohibits corporate donations, and individual donations to National Assembly member support groups are capped annually. Most importantly, the Korean legal system does not have organizations equivalent to U.S. super PACs—that is, groups that can support a specific candidate and spend unlimited money independently of the candidate’s campaign. While civic groups or associations can publicly endorse a candidate, there are no legal loopholes that allow them to keep the source and scale of their funding hidden.

Of course, this doesn’t mean South Korean political funding is perfectly transparent. Controversies involving splitting support groups or providing indirect support through seemingly unrelated organizations do occasionally emerge. However, there is a difference between a structural loophole—where the law effectively says, “if you register as a nonprofit, the disclosure requirement vanishes”—and individual cases of rule-breaking. The former is a system designed for circumvention, while the latter involves violating the system. The more I looked into the U.S. dark money controversy, the more it became clear that the core issue isn’t “who broke the rules,” but rather “that the rules themselves are designed this way.”

The lingering question

More than the 1 trillion won figure itself, what strikes me is the fact that the money disappears seamlessly through legal channels. The ruling that created super PACs, the tax-exempt status of nonprofits, and the reporting deadlines for pop-up super PACs—each regulation has its own justification. But the moment these three overlap, the voters are pushed out of the loop. Whether to block this with regulation or view it as the freedom of anonymity is a matter for each person to judge, but it seems that U.S. voters right now aren’t even receiving enough information to make that judgment.