Peter Geoghegan on social media, political campaigning and 'dark money'

Peter Geoghegan is a journalist and writer who runs investigations for award-winning media platform openDemocracy.

As well as exposing 'dark money' through his work at oD, Peter has also written a book about democracy and political campaigning. Democracy For Sale: Dark Money and Dirty Politics was released to critical acclaim last year, so it's our pleasure to host Peter has part of an event on Thursday 3rd June, Democracy In Crisis, alongside Neal Lawson of think-tank Compass and Klina Jordan from the Make Votes Matter campaign.

Peter told us more about his work – and why dark money matters – ahead of the event.

What is 'dark money' and why is it a threat to our democracy?

Dark money is an American neologism for an increasingly global phenomenon: funds from unknown sources that influence our politics. This money gets into the political system in an increasing variety of ways, from loopholes in election law and online campaign fundraising through to anonymously-funded, agenda-setting pressure groups.

In her authoritative book on election finance, Dark Money, American journalist Jane Mayer outlines how US democracy was effectively bought by a cadre of the super-rich and their surrogates, often through faceless political action committees that can spend limitless amounts of money. In America, elections involving hundreds of millions of voters have become contests decided, in key constituencies, by a handful of plutocrats.

British politics is comparatively low-spending, especially when set against the United States, but there is plenty of evidence that the American model of hidden finance and clandestine influence has traversed the pond. Britain, as the London-based American political analyst Anne Applebaum notes, “has become a place where untransparent money, from unknown sources, is widely accepted with a complacent shrug”.

The relatively small sums involved can make it even easier to get access to the top table of British politics. US donors might be expected to spend hundreds of millions of dollars in a single election cycle. But for £50,000, pretty much anyone can get a seat with the British prime minister at a lavish Conservative Leader’s Group dinner, where discussions are kept strictly private, even if they touch on government policy.

The dark money playbook is straightforward: take advantage of shady campaign financing; circumvent electoral rules where you can; and draw on a network of supportive think tanks, a receptive media run by a handful of magnates and hard-line caucuses within the long-established political parties.

The same strategies and tactics are increasingly employed in the UK and across much of the world.

What’s so bad about political campaigns not declaring the source of their funds? Does dark money actually matter?

It does, profoundly.

Even relatively meagre sums can shift the political needle and generate highly-effective lobbying operations. Small, purposeful groups are adept at taking control of policy in ways that are very hard to see for those not regularly involved in politics.

In Britain, a nexus of corporate-funded libertarian think tanks and transatlantic media moguls turned a ‘no-deal’ Brexit from what was in 2016 an outlandish proposal into a more or less explicit government policy option after Boris Johnson became prime minister in the summer of 2019.

What role does social media play in the democratic process in 2021 and why does this need our attention?

Dark money has gone hand-in-hand with the rise of digital disinformation. It is a truism that politics has been transformed in recent years. But it is not just the outcomes, the election of disruptive authoritarian populists, that have changed. Behind Brexit, Trump and a host of other unforeseen ruptures is a paradigm shift in the nature of political communication.

The digital world offers voters the opportunity to live in echo chambers where their political prejudices are confirmed and reinforced daily. We can all choose a ‘tribe’ now and decide not to hear any voices critical of our choice. As politics is increasingly mediated through Silicon Valley tech giants, falsehoods and mistruths spread at light speed. So far, few political leaders have been willing to back down in a digital arms race in which every potential advantage is seized upon.

The communications revolution has changed our politics in ways we are still struggling to understand. Nigel Farage’s Brexit Party may have ceded most of its power to Boris Johnson in the December 2019 general election, but the remarkable story of its short-lived success tells us a lot. In May of the same year, Britain’s first ‘digital party’ topped the polls in European Parliament elections in the UK, less than four months after it was first registered. Inspired by Italy’s Five Star Movement, the Brexit Party ran a sophisticated online campaign that tapped into widespread anger that Britain was still in the EU, nearly three years after the country had voted to leave.

This pop-up party was governed by a constitution that gave Farage almost complete control. Rather than members with internal voting rights, its supporters gave money but had no power. Ahead of the European elections, tens of thousands of people donated online through PayPal, with minimal checks. The electoral regulator warned that the Brexit Party’s online fundraising could allow donors to evade the rules banning foreign contributions to British politics.

We can see the impact of social media on our democratic processes in 2021 too. Earlier this month, Scotland voted in elections to the devolved parliament and, as I showed recently, significant sums of unaccountable money were spent on social media adverts pushing tactical voting, despite new legislation seemingly designed to prevent exactly this sort of electoral interference.

What are some of the most startling things you have discovered, through your journalism and the writing of the book, which the general public would find unbelievable?

I think the most unbelievable thing is how easy it is to distort the democratic process and how poor the rules in Britain are.

Our outdated legislation is unfit for the digital age. Election candidates are legally required to ensure that all their printed election material is clearly labelled: a leaflet pushed through a voter’s door has to say who paid for it. But online political ads do not even have to carry an identifying imprint, and political parties do not have to provide more than the most cursory accounting of how money is spent.

I also think people don't realise how cheap and easy it is to buy access. In my book I write a lot about libertarian think tanks, who are extremely adept at maximising their media reach in the limited space for public political debate. For example, the Institute of Economic Affairs' revenue in 2017 was just £2.5m but it had an advertising value equivalent to £66m.

How do we start to make money more accountable? Are international agreements part of the solution?

There are lots of pretty easy things to take money out of politics. The most obvious is dramatically increasing the maximum fines for breaking political finance rules. The false distinction in electoral law between online and offline political advertising – which allows campaigns to send digital adverts without even an imprint – must end. Digital spending should be accounted for transparently and voters should be able to see how they are being targeted by political campaigns.

The role of money in British politics also has to change. A ban on donations from individuals who are not domiciled in the UK and who are non-resident for tax purposes would go some way to stemming the flow of dark money, as it would preventing the use of shell companies to hide the true source of donations. Offshore firms – such as that used by Arron Banks to bankroll his Brexit campaigns – should be barred from making political contributions.

Political parties could be forced to publish the names of significant donors that also attend private party events organised by that party. This would end the secrecy of elite donation clubs like the Conservatives’ Leader’s Group and give us better information about which donors have access to government.

In the UK, where relatively small sums of money can buy a great deal of access, there is a strong case for placing limits on individual donations. The surest way to reduce the power of money in politics is to replace a handful of super-rich donors with large numbers of smaller contributions. If the maximum donation was, say, £10,000 a year, political parties would be forced to rely on a far wider, and more inclusive, donor base.

That, of course, would leave many parties with an income shortfall. One way around that could be for the state to step in and match fund small donations, say below £250. The scheme could even be paid for by a much-needed tax on the tech giants. Another option to encourage political participation is to make the cost of party membership tax deductible.

The stick needs to be used as well as the carrot. Think tanks such as the Institute of Economic Affairs should be forced to declare their donors, and Britain’s ineffective lobbying register completely overhauled. Any system where corporates can plough anonymous money into putative research institutes that influence public debate, and a consultant can meet government ministers multiple times without having to register as a lobbyist, is hardly fit for purpose.

Even finding out how registered lobbyists operate is almost impossible, given the poverty of much of the transparency data that comes out of the British government. We had to go all the way to the courts just to get hold of the European Research Group’s taxpayer-funded briefings.

Lobbyists should have to declare far more about what conversations they are having, and with whom. Proper sanctions need to be introduced for breaking the rules or not complying, including bans on future meetings with public officials, as well as monetary fines.

But alongside all these technocratic fixes, there also needs to be a much deeper change in how we conceive of and engage with democracy.