Washington hates a secret.

Yet in the summer of 2020, when a blandly named entity called the Impetus Fund received a $64 million donation from a single anonymous source, it touched off a guessing game with broad political implications.

That single anonymous donation, routed through a series of accounts, eventually would be used to help Joe Biden defeat Donald Trump in the 2020 presidential election. Critics say it has come to illustrate an increasingly opaque system of funding elections that in 2024 could reach a scale that dwarfs all previous election cycles. 

The source of that donation remains unknown — and not for lack of effort. Fox News first reported on the curious donation in 2023, but was unable to ferret out the donor's identity. A cottage industry of public interest groups and investigative reporters who dig relentlessly to unmask big-dollar donors, also came up empty.

Most speculate the money originated with a single, super-wealthy Biden supporter. But it could also have come from a privately held company or a shell corporation, an increasingly common tactic used by well-heeled donors seeking to add layers of anonymity to their political largesse. It remains a $64 million mystery — and while legal, it's one that critics say underscores what's wrong with today's campaign finance system.

"Without information about who is funding groups spending to influence elections, voters won't know who is trying to color their views, won't be aware of any potential conflicts of interest that a funder has or what stake they may have in the outcome of the election," said Anna Massoglia, editorial and investigations manager at OpenSecrets, a non-partisan watchdog organization that tracks the influence of money on politics. 

Massoglia is one of the most persistent sleuths tracking the flow of money in American politics. She and other campaign finance watchdogs have developed a strong theory about how the money moved. After landing in the Impetus Fund, which is a 501c4 tax-exempt organization, the donation passed through a series of entities in a kind of shell game that conceals from voters the interest and agendas that lie behind the money and messages — with each step further shielding the identity of the source. A 501c4 nonprofit is required by the IRS to promote social welfare as its primary function, and it is not required to disclose its donors.

First, $55 million of that initial donation moved to the nonprofit arm of the Biden super PAC, Future Forward USA Action, which had been anointed by allies of President Biden as the primary super PAC supporting his reelection. Then, a few weeks before the 2020 election, Future Forward USA Action moved $60 million to FF PAC, as the main campaign committee is commonly known. That committee, also a super PAC, is required to disclose its donors. But since it received the money from its own nonprofit, the original source of the contribution remained under wraps. Future Forward was then able to spend freely on electioneering, including explicit endorsements of candidates, so long as it did not explicitly coordinate those efforts with the Biden campaign. 

"This kind of circular laundering of dark money is a very common operation now," said Craig Holman, a campaign finance expert at Public Citizen, which advocates for a more transparent system of election funding. "It's a sorry state of affairs."

Future Forward declined to comment. 

Democrats have long decried the lack of transparency in the campaign finance system and have advocated to close the dark money loophole that currently exists in the law. But some critics say it smacks of hypocrisy.

"For too long the left has been playing a game of decrying dark money while at the same time being fully dependent on it, even supercharging Mr. Biden's reelection campaign," says Caitlin Sutherland, executive director of the right-leaning government watchdog group Americans for Public Trust.

Others say that it's unrealistic to expect Democrats to unilaterally disarm. "That would be a big ask of Biden not to set up a super PAC and not to accept dark money," Holman of Public Citizen said.

Mr. Biden and his campaign have at various times voiced both sides of this argument. In September 2022, the president appeared in the White House briefing room to advocate for the Disclose Act, which would require political groups and nonprofits to disclose donations above $10,000. 

"There's much too much money that flows in the shadows to influence our elections," Mr. Biden said. "Dark money erodes public trust."

But when asked directly about the proliferation of dark money the Biden effort is benefitting from, his aides had a different take: "The stakes of this election are sky high," one Biden adviser told CBS News. "We will protect our democracy with every tool that is legally available."

Or as one Democratic strategist said, "You don't show up at a gun fight with a knife."

A new era for anonymous donors

The most far-reaching campaign finance laws of the modern era were passed almost exactly 50 years ago in the wake of the Watergate scandal when campaigns were still receiving unlimited and often untraceable amounts of money, sometimes in suitcases of cash. In 1974, Congress imposed significant new limits on contributions to campaigns from individuals, corporations and political groups. It also created the FEC to enforce those restrictions.

But campaign watchdogs say money, like water, always seems to find a way. Within a few years, amendments to the Federal Election Campaign Act had given rise to the era of unlimited contributions from corporations and unions that were supposed to be limited to so-called "party building" efforts, restrictions that were easily circumvented to benefit campaigns. 

In 2002, Congress passed the McCain-Feingold Act which attempted to close those loopholes.  But a short eight years later, a series of Supreme Court rulings struck down spending limits on corporations and unions, radically altering the campaign finance landscape. Knowingly or not, the court ushered in the era of the super PAC and, with it, a proliferation of other nonprofit organizations that were not required to disclose their donations under U.S. tax law. 

Torrents of so-called dark money began flowing and a whole ecosystem of opaque groups began forming to raise and distribute that money. One of those entities was the Impetus Fund.

Democratic dark money web

Located on the eighth floor of a Washington, D.C., office building, there is little indication the Impetus Fund is anything more than a vehicle to take in and redistribute money. A directory of offices in the hallway does not mention Impetus. A receptionist who serves multiple businesses on the floor says she has rarely, if ever, seen anyone from the organization. 

"They're a virtual client," she says cheerfully. Its website is equally spare, with innocuous statements about its mission. "Impetus Fund works with changemakers across the country to unlock a more inclusive, accessible, and vibrant democracy," the site says. Impetus Fund's  president is Ezra Reese, the political law chair at the Elias Law Group, which was founded by Marc Elias. Elias, a longtime Democratic Party lawyer who was general counsel for the presidential campaigns of Hillary Clinton and John Kerry, founded his law practice with an eye toward "electing Democrats, supporting voting rights, and helping progressives make change," its website says.

Impetus is a creation of a progressive D.C. firm called Arabella Advisors, which oversees a web of nonprofits that today funnels more dark money into American elections and political causes than any on either side of the political divide. Founded in 2005 as a kind of facilitator for tax-exempt organizations and charitable donors, Arabella provides back-office functions for nonprofits, including legal advice, human resources, accounting and the like.

One of its services is helping donors maintain their anonymity. There are many legitimate reasons why charitable donors seek to remain anonymous. Sometimes it's rooted in humility.  Other times they seek to avoid being hit up for other donations. When it comes to political giving, they may not want to court controversy in these polarized times. But good-government advocates say voters have a right to know who is behind the tsunami of ads and other messages that are overwhelming American politics today.   

"Transparency is crucial for a fully functional government that is accountable to the people," said OpenSecrets' Massoglia.

Arabella is a dark money juggernaut. Through its constellation of nonprofits, it brought in close to $3 billion in dark money in the 2022 cycle. The behemoth in the Arabella network, the Sixteen Thirty Fund, raised nearly $380 million in that same cycle. In 2020 it steered $410 million to help defeat Donald Trump and win back the Senate for Democrats. 

And though the big political spending by tradition starts after the 4th of July holiday, they already appear to be gearing up for the current presidential cycle. Arabella entities are helping fund progressive causes, like climate change and marijuana legalization. Lately, they have poured money into state ballot initiatives, particularly where there are competitive Senate or House seats, possibly as a way of driving turnout. 

Steve Sampson, an Arabella spokesman, declined comment on the Impetus donation, saying only that Arabella provides consulting services to foundations and nonprofit organizations, including helping them stay compliant with relevant laws and regulations. He added that "Arabella does not donate funds to political campaigns or candidates."

Some of the money reaches super PACs like Future Forward. 

Will there be another $64 million mystery?

In January, FF PAC announced that it had raised $250 million, a sum that it plans to use for an unprecedented ad blitz starting immediately after the Democratic National Convention in August and going through Election Day. A significant portion of that money comes from dark sources, although the specific breakdowns won't be known until everything it raised is reported to the FEC.

In its April campaign disclosure, Future Forward reported that it had raised $16.2 million, two thirds of it coming from dark money sources through its nonprofit arm. Entities supporting the election of Donald Trump have also raised millions in dark money, but so far are lagging behind the Biden effort. But just last week, a new dark money group supporting Trump, Securing American Greatness, put up an ad in Pennsylvania that criticized Mr. Biden on inflation, Politico reported. And with more than five months to go before the election in November, there is still time for backers of Trump to close the gap. 

There are indications that the Trump operation is beginning to catch up in the overall money race, despite Biden's sizable lead for the past few months. For now, though, Biden still has a significant cash-on-hand advantage, and he's continuing to bring money into the campaign, attending a fundraiser in Greenwich Monday, hobnobbing with hedge fund managers and people from the entertainment industry.

Impetus has been quiet so far. But campaign finance experts have noticed stirrings. Earlier this month, after four years of operation, Impetus launched a website. Entering the campaign late, as it did in 2020, has advantages. If Impetus cranks up its fundraising later this summer, the dark money watch dogs will have nothing to chase until public filings are disclosed — after the election is over. Impetus did not respond to a request for comment.

That could mean another $64 million dark money mystery.

In:
• Joe Biden
• Donald Trump

Daniel Klaidman

Daniel Klaidman, an investigative reporter based in New York, is the former editor-in-chief of Yahoo News and former managing editor of Newsweek. He has over two decades of experience covering politics, foreign affairs, national security and law.

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