Dark money used to evade donor disclosure laws in Michigan
The group claims it is exempt from taxes under Section 527 of the Internal Revenue Code, which requires most groups to disclose donor and spending — but not local political parties.
"But that federal exemption is based on the assumption they are going to be regulated by state law and filing reports of their contributions and expenditures with a state entity,” said Austin Graham, a campaign finance expert with the Campaign Legal Center.
In Michigan, however, the Department of State does not require political parties to disclose donors or spending by administrative accounts, which are supposed to be used for purposes “totally unrelated to the party’s political activity,” according to a campaign finance manual maintained by the state.