‘Dark money’ is fueling both sides of Virginia’s redistricting campaign

Tens of millions of dollars have flowed into Virginia’s pro- and anti-redistricting campaigns from organizations across the country in short order ahead of the April 21 referendum. 

Most of that money on either side has come from 501(c)(4) organizations — tax-exempt nonprofits that are not required by the IRS to report their donors, named for the code section that governs their tax status. That legal loophole has allowed the organizations to effectively shield the origin of the money that passes through them to a campaign’s coffers. Organizations with a 501(c)(4) designation are known as primary vehicles for “dark money” in political campaigns.

Campaigns on both sides of the redistricting referendum have taken tens of millions of dollars in untraceable contributions from dark-money organizations. The “yes” side received $53 million and counting including from multiple 501(c)(4) organizations to the Virginians for Fair Elections referendum committee between February and April. The “no” side received $22 million to its Virginians for Fair Maps referendum committee and $7 million to Justice for Democracy PAC, an anti-redistricting group, including from 501(c)(4) organizations, according to campaign finance reports collected by the State Board of Elections. 

“Both campaigns are funding their referendum committees the exact same way,” said Mike Young, president of Virginians for Fair Maps, in a statement through the group’s spokesperson. “The Orwellian named Virginians for Fair Elections has taken millions more in dark money (to include from Hakeem Jeffries and George Soros). Virginians for Fair Maps has taken hundreds of contributions directly from Virginians who are sick and tired of the perverse, self-promoting political games being played in Richmond.”

Finlay Lee, spokesperson for the Fair Maps group, did not respond when asked to provide proof that the organization had received “hundreds of contributions directly from Virginians.” The bulk of the haul taken in by Fair Maps was contributed by a tax-exempt organization of the same name, effectively shielding those donors from the public. The Virginia Public Access Project released data Monday evening that showed hundreds of smaller cash contributions from individuals to the organization, but it was unclear if those donations came from Virginians.

“What the ‘No’ campaign won’t tell you is that their effort is being bankrolled by Trump billionaire Peter Thiel and MAGA allies,” said Dan Gottlieb, spokesperson for Virginians for Fair Elections. 

Tens of millions of dollars had been raised in just the past few weeks, including $7 million from Thiel’s network alone, Gottlieb said, “to fund misleading ads aimed at deceiving Virginians.”

“This is a deliberate MAGA operation built on deception, scare tactics, and distortion because they know voters will reject their agenda if they hear the truth. The pattern is clear: MAGA money and MAGA lies designed to warp a fair vote,” he added. 

The money trail

By name-checking Thiel, Gottlieb is invoking another actor in the tangled web of dark money and anonymous donors in the prelude to the midterm elections in Virginia: a new political action committee called Justice for Democracy. That PAC was at the center of controversy in March after it sent campaign mailers statewide that critics said misused imagery from the Civil Rights Movement and the Jim Crow era. Per Aspera Policy Incorporated, a 501(c)(4), contributed $7 million through three transactions to Justice for Democracy at the end of March and early April. 

Thiel used the 501(c)(4) in 2022 to contribute $200,000 to now-Vice President JD Vance’s U.S. Senate campaign, though it’s unclear whether Thiel was the source of the $7 million to Justice for Democracy. Per Aspera Policy Incorporated ended 2024 with $1.3 million in net assets, according to documents collected by ProPublica’s Nonprofit Explorer tool. Chris Marston, the group’s paid tax preparer, declined to comment on where the $7 million contributed to Justice for Democracy between March and April came from. When asked who could comment on the money, he replied, “No one.”

Former Republican Del. A.C. Cordoza, chairman of Justice for Democracy, also declined to comment and said that the PAC’s treasurer, Christopher Woodfin, would be best suited to answer money-related questions. Woodfin did not respond to a request for comment. 

The referendum committee for the “no” campaign, Virginians for Fair Maps, received about $21.5 million in cash across six separate contributions in March and April from a 501(c)(4) with the same name. A search of the organization in the IRS tax-exempt search tool rendered no results. A representative from Election CFO LLC, which handles bookkeeping for the referendum committee, declined to comment. 

The Virginians for Fair Maps referendum committee and Virginians for Fair Maps 501(c)(4) are likely two separate legal entities with the same name, with one passing money to the other, said Brendan Glavin, director of insights with OpenSecrets, a Washington-based research group that tracks money in U.S. politics. 

“If that is the case, they probably would have formed it very recently,” Glavin said of the Virginians for Fair Maps 501(c)(4). “There can be a lot of lag on the IRS site to actually see a new filing.”

More than $53 million in cash contributions have flowed into the main referendum committee for the “yes” side of the campaign: Virginians for Fair Elections. 

Of that, $32.8 million cash was given by the House Majority Forward 501(c)(4) over six contributions between February and April. 

House Majority Forward is a Washington-based advocacy arm of the House Majority PAC, a super PAC associated with the U.S. House Democratic leadership. Super PACs are independent, expenditure-only committees that may raise unlimited sums of money from corporations, unions, associations and individuals, then spend unlimited sums to overtly advocate for or against political candidates, according to OpenSecrets. 

House Majority Forward is a major financial supporter of U.S. congressional Democrats, according to InfluenceWatch. InfluenceWatch is a project of the Capital Research Center that examines nonprofit organizations involved in politics and policymaking. House Majority Forward ended 2024 with $16.1 million in net assets, according to the organization’s 990 tax form. Efforts to reach representatives of House Majority Forward for this story were unsuccessful. 

Another $11 million was contributed to Virginians for Fair Elections by The Fairness Project over four contributions between February and March. The Fairness Project is a Washington-based, labor union-backed 501(c)(4) that finances and supports state ballot initiative campaigns to promote left-of-center policies, according to InfluenceWatch. The Fairness Project ended 2024 with $4.1 million in net assets, according to the organization’s 990 form. Efforts to reach The Fairness Project were also unsuccessful. 

What are ‘dark money’ groups?

“Political actors have discovered they can use this legal entity in order to get involved in politics and influence elections,” Glavin said. “Anyone can give as much as they want to one of these organizations and with essentially a guarantee that their identity won’t be disclosed.”

Those anonymous contributions are often referred to as “dark money.” Dark money groups are organizations that are active in politics but do not have to disclose their donors to any source, and 501(c)(4) organizations are the biggest example of those groups. 

Referred to as “social welfare” organizations, 501(c)(4)s are nonprofit entities that are registered with the IRS and are required to file tax form 990 annually. Other types of 501(c)(4) organizations exist that are not political in nature, such as homeowners’ associations and volunteer fire departments. Unlike 501(c)(3) nonprofits, donations to 501(c)(4) groups are not tax-deductible. 

“There is no form that they need to file that discloses their donors, so when they’re giving contributions to campaigns or ballot measure committees, there’s no way to trace that money back to the individuals that it originated with,” said Shanna Ports, senior legal counsel with the Washington-based Campaign Legal Center, a nonpartisan organization that focuses on ethics and legality in political campaigns. 

The primary purpose of 501(c)(4) organizations is not supposed to be to influence elections. The groups are required to keep their election spending below 50% of their total spending, but the IRS does not appear to have a mechanism to enforce that regulation, Ports said. 

Contributions to ballot measure committees, such as those involved with the redistricting referendum, are not considered election-related activity. Instead, contributions to ballot measure committees are seen more as lobbying by the IRS. That means the floodgates are wide open into Virginia’s redistricting referendum committees. 

“The IRS thinks about ballot measures as akin to a legislative action — it’s like the people are acting as a legislators, so you’re trying to convince the people to take a certain position on legislation, aka the ballot question in front of them, then money put to that purpose is lobbying, not election influencing,” Ports said. “These groups can spend a lot of money on ballot measures.”

Virginia does not have campaign contribution limits, Glavin said, which makes it easy for big-money interests to drop large sums into an election or referendum in short order through a 501(c)(4) or super PAC, to buy TV or digital ads for an instantaneous effect. 

The redistricting referendum is taking place on a truncated election cycle, with just months for campaigns to drum up support for or opposition to the measure before April 21. That short time frame created the ideal environment for the infusion of dark money into the campaigns on both sides of the issue, to pay for advertising and events aimed at getting out the vote. And the issue at the heart of the referendum has drawn national attention. 

“The issue presented with this ballot measure in Virginia is a bit unique because of its national implications,” Ports said. “It will have, people think, an impact on the control of Congress following the 2026 midterms so I think there is a much broader donor base than there often is for ballot measure issues because people who care about federal politics from all across the country are paying attention to this.”

How to shine a light on ‘dark money’

“Campaign finance laws exist to curb corruption and provide transparency,” Ports said. “When there’s dark money pouring into elections, voters don’t know who’s behind it and therefore they don’t have the transparency that the law is promising them.”

Glavin echoed Ports. 

“Dark money influencing these votes is problematic,” he said. “It’s hard for people to make good decisions about how they want to vote when they don’t know who is trying to influence them and what their motivations are.”

Bills have repeatedly been introduced and failed each time in Congress to tackle dark money. 

The federal Disclose Act would create a requirement to trace back the source of dark money contributions to the original donor and disclose that publicly. That bill has been introduced every congressional session going back many years without success, Ports said. It was reintroduced in both the U.S. House of Representatives and the U.S. Senate in early March. 

Some states have introduced or passed similar measures, including Arizona, where a ballot measure was passed with 70% of voter support to require dark money groups to disclose their donors. 

“We see those across the country,” Ports said. “It’s a great tool to get transparency where there currently is none and this would do a lot of work to solve the dark money problem if there was a bill like that in Virginia.”