Opposites align in push to clamp down on dark money in North Dakota campaigns

BISMARCK — North Dakota Reps. Mike Schatz and Karla Rose Hanson don’t have much in common when it comes to politics.

Schatz, a New England Republican, is one of the most conservative members of the deep-red House of Representatives. Hanson, a Fargo Democrat, stands for a brand of liberalism that has become endangered in the state Legislature.

But the two lawmakers are cast as unlikely allies in a push to shine light on so-called dark money — campaign spending that comes from unknown sources.

State law allows campaign finance groups that classify themselves as “independent expenditure” filers to avoid disclosing their donors. House Bill 1500, proposed by Schatz and cosponsored by Hanson, would require the nebulous organizations to publicly divulge the “ultimate and true source” of the funds they use to buy political ads.

Now tasked with selling the legislation to their colleagues, Schatz and Hanson say adding transparency to campaign finance should be a bipartisan objective.

“The public has a right to know who is spending money to influence their vote, and that’s something that most of us can agree on,” Hanson said.

The bill is one of about a half-dozen proposals before North Dakota lawmakers that would expand public reporting requirements for campaign finance groups or candidates.

The wave of legislation comes in response to a perceived increase in the number of attack ads disseminated to residents over the last few election cycles.

“The candidates are tired of half-truths, and the people are tired of the mailers,” Schatz told the House Judiciary Committee during a hearing on Monday, Jan. 30.

Supporters of the bills say they would rein in deep-pocketed donors, including Gov. Doug Burgum, who have found legal ways to obscure details of their political activity from public view.

Opponents contend current state law upholds donors’ First Amendment rights and provides enough transparency to the public. They say political ads hold candidates accountable for their voting records.

The legislation that now bears Schatz’s name has a history that illustrates how an inflow of untraceable campaign spending has changed minds within North Dakota’s dominant Republican party.

Hanson initially brought forward a proposal containing almost the exact language of House Bill 1500 in July 2020. A Republican-led interim committee axed Hanson’s bill draft later that year, but former Democratic Rep. Ruth Buffalo sponsored a version of the legislation during the 2021 lawmaking session.

Every Republican in the House, including Schatz, voted against the bill, dealing it a swift deathblow.

Schatz said his position on disclosure requirements for independent expenditure filers shifted after one of the groups — the Brighter Future Alliance — targeted him with negative ads last year.

A mailer sent out by the group said Schatz “put our children’s future at risk” by voting “against funding our schools.” An edited image on the mailer depicted Schatz wearing on his head a metal bowl with a darkened lightbulb attached to it. Scribbled on the bowl in elementary handwriting was the word “Thinker.”

The former social studies teacher and football coach said he took exception to the group’s antagonistic tactics. It’s true that Schatz voted against a K-12 education budget in 2021, but he noted it wasn’t because he doesn't believe in funding education. (Schatz said he opposed the budget bill because “when I taught, we spent much less and had better results.”)

“I’ve dedicated my life to children, and for them to come out and smear me like that, I’m not real happy with that,” Schatz said. “Until it happens to you, you think, well, it’s not an issue. It’s a little different when it’s your name under the funny hat.”

Schatz wasn’t the only one in the Brighter Future Alliance’s crosshairs. The group chaired by retired advertising executive Pat Finken paid for attack ads targeting five other Republican legislative candidates and Fargo City Commissioner Dave Piepkorn in the lead-up to the state’s primary election.

In all, the nonprofit spent more than $300,000 during the last election cycle, nearly half of which funded ads opposing a measure to legalize recreational marijuana.

Schatz said his bill intends to “get to the bottom of” who’s behind the negative ads bankrolled by the Brighter Future Alliance and any other independent expenditure filers.

Sen. Jeff Magrum, Hazelton Republican who also was targeted by Brighter Future Alliance, is sponsoring similar legislation for the same reason as Schatz.

“I need to know who my enemies are,” Magrum said.

Hanson, who was targeted by the group in 2020, said she’s glad to have support from some Republican colleagues in her yearslong effort to increase transparency in campaign finance.

Finken rejected the notion that any ads distributed by his group contain false information. He said the Brighter Future Alliance is informing voters of policymakers’ records, adding that, “If we don’t tell that story, who will? Certainly not the candidate themselves.”

“HB 1500 is an unconstitutional assault on non-profits like the Brighter Future Alliance and uses intimidation and excessive regulation to restrict and interfere with our lawful activity,” Finken said in an email. “This bill is not about transparency, it is about silencing us.”

Secretary of State Michael Howe testified against the bill Monday, noting that it would be burdensome to implement. The former Republican lawmaker added that the legislation could make his office vulnerable to frivolous lawsuits. He encouraged legislators to study campaign finance-related issues after this year's session instead of making sweeping changes.

Several Republican-sponsored bills to increase public disclosure requirements in campaign finance focus on a different kind of group: multicandidate committees.

Political committees that fall under the designation must report their donor list, but they are not legally required to reveal how they spend their money.

The vast majority of multicandidate committees registered in North Dakota are affiliated with a political party or a series of candidates, but the Dakota Leadership PAC, which derives nearly all of its funding from Burgum, is a notable exception.

Burgum, a former tech executive, gave the Dakota Leadership PAC close to $1.4 million last year. The group spent 94% of that money on campaign advertising, according to a year-end report that classifies spending into five broad categories.

Dakota Leadership PAC Chairman Levi Bachmeier told Forum News Service in May the group was targeting eight legislative districts with political ads, but he declined to answer questions about which candidates it supported or how much it spent in any given race.

In 2020, the Republican governor bankrolled the committee's extensive political advertising campaigns with more than $3.2 million of his personal fortune.

Over the past two election cycles, the group’s independent advertising has promoted Republican legislative candidates running against ultra-conservative incumbents, according to multiple mailers reviewed by Forum News Service.

Magrum’s Senate Bill 2318 would require multicandidate committees to report the recipients of its expenditures and the names of candidates and measures it supports or opposes. The lawmaker confirmed his proposal is directly in response to the Dakota Leadership PAC, which supported his opponent last year.

Rep. Jim Kasper, a Fargo Republican who is backing a similar bill, said his legislation does not target a specific multicandidate committee, but it does address a lack of transparency in state campaign finance law.

“Multicandidate committees target legislators, and I think we as the public and we as legislators ought to have the right to know what they’re doing with their money,” Kasper told the House Government and Veterans Affairs Committee last week.

In 2021, state senators cited a likely increase in the paperwork required of their party caucuses before killing two bills that would have compelled multicandidate committees to disclose which campaigns they support or oppose with donations.

Burgum campaign spokesman Dawson Schefter and Bachmeier declined to comment on any of the bills that would require more reporting for the Dakota Leadership PAC.

Neither chamber has voted this year on legislation related to disclosure requirements for independent expenditures or multicandidate committees.