Big tech’s ad rules leave plenty of room for dark money to hide
A new report shows that despite efforts by Facebook and Google to self-regulate, it's still a challenge to follow the money.
The ads began appearing on Facebook in English and Spanish in the run-up to Super Tuesday. "Bernie Sanders pushed for nuclear waste dumps at Sierra Blanca that threatened Latino communities. All while he was profiting off of it," the ads read.
They targeted people in states like California and Texas where voters would soon cast ballots in the Democratic presidential primary, and the ads were sponsored by a group called Big Tent Project. The Facebook page for the group was created in mid-February, and by March 10, it had spent $164,673 on anti-Sanders Facebook ads.
But those ads constituted a small sliver of the more than $4 million in anti-Sanders digital ads Big Tent Project told the U.S. Federal Election Commission it bought before Super Tuesday. So, where did the rest of that money go? It's impossible to say.
Nearly four years after the U.S. presidential election exposed how little Americans know about who's behind the political ads they see online, these ads remain almost completely unregulated. Facebook and Google have built massive ad archives that show who's targeting their users with political messages and how. Given that they account for more than 75 percent of political digital ad spending, that's a start. But those efforts are voluntary on the part of the companies, their requirements vary, and they reveal nothing about the ads appearing off their platforms.
This issue is the subject of a new report by the Campaign Legal Center, a Washington DC-based non-profit that advocates for government accountability. The report analyzes the difference between the amount of digital advertising that dark money groups like the Big Tent Project have reported to the FEC and the amount that appears in the few online ad archives that tech companies have created. The authors found that the vast majority of that money remains unaccounted for. This, they argue, suggests that despite tech giants' best attempts at self-regulation and transparency, plenty of loopholes remain, allowing political advertisers to hide their tracks.
"These organizations by design are trying to keep the public in the dark about the true sources of their funding, but it's also clear they're placing their digital ads in a manner that keeps the public in the dark about the content of many of the ads they're running online," said the Campaign Legal Center's director of federal reform, Brendan Fischer, who co-authored the report with senior researcher Maggie Christ.
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"There's every reason to expect we'll see similar patterns emerge as the 2020 campaign proceeds," Fischer said.
The Big Tent Project didn't respond to Protocol's request for comment.
The group was formed by West Virginia senator Joe Manchin's former communications director Jonathan Kott, and quickly became one of the top outside spending groups focused on the federal election. But the lack of transparency about the content and placement of its online ads is hardly unique. Unlike TV and radio, online companies are under no legal or regulatory obligation to keep a record of the political ads they run. And 501(c)(4) groups like Big Tent Project are only required to report their digital ad spending to the FEC for ads that expressly advocate voting for or against a specific candidate. Simply mentioning a candidate's name and targeting voters with an online ad before an election isn't enough to warrant a disclosure to the FEC. But it would be if the same ad ran on TV.
For years, lawmakers have tried to pass laws to modernize these rules, including one piece of legislation called the Honest Ads Act. But those efforts have gone nowhere, leaving it to tech companies to implement their own disclosure policies. That's created a patchwork system where Facebook's ad archive includes different information than, say, Google's or Snap's, while streaming services and platforms that sell programmatic ads share no information whatsoever.
"Whatever Facebook and Google do only applies to Facebook and Google," Fischer said. "It doesn't do anything to strengthen transparency on a platform like Hulu or Pandora, which both host a significant number of political ads."
Even the disclosures that do appear on Facebook and Google don't always tell the full story. In their research, Fischer and Christ stumbled across another group called United We Succeed, which describes itself as "a campaign in partnership with the Big Tent Project Fund." That group also purchased nearly $72,000 in anti-Sanders ads on Facebook, bearing similar messages about Sanders pushing for nuclear waste dumps. But the disclaimers on the ads, which read "Paid for by United We Succeed," give no indication of a connection to Big Tent Project Fund. The two entities list separate addresses and phone numbers and are categorized in Facebook's ad library as if they were purchased by two different entities entirely. Only the About section on the Facebook page for United We Succeed says anything about its affiliation to Big Tent Project Fund. (A woman who answered the phone at the number listed for United We Succeed hung up when contacted by Protocol.)
"It's not that Big Tent Project was entirely disguising its connection to United We Succeed, but it did take a fair amount of poking around to sort out these were the same group," Fischer said. What's more, because United We Succeed's ads don't specifically call on people to vote one way or another, United We Succeed doesn't appear in FEC records.
A Facebook spokesperson said that since United We Succeed lists its website and notes its affiliation to Big Tent Project on its Facebook page, that's sufficient disclosure. "Our authorization process in the United States is extensive, and we offer more transparency into political and issue advertising than TV, radio or any other digital ad platform," the spokesperson said. "Still, disclosure requirements are an area where we invite additional guidance and regulation from governments."
It's important to note that not all of the money that 501(c)(4) groups report to the FEC necessarily goes toward actually buying ads. Fischer and Christ note that some of the money covers the cost of creative agencies' commission fees and other overhead. That could help explain some of the spending discrepancies they found in their research on another group called Fellow Americans.
In its FEC filings, that group reported spending around $140,000 on anti-Trump ads this cycle, but only about $6,000 of it was visible in Facebook and Google's online ad archives. In the FEC reports, these payments were made to a company called Incite Studio, which is located at an address that New York state tax records show is associated with Nathaniel Lubin, former White House digital director under President Obama.
Lubin told Protocol that there are no ads that are unaccounted for and that the only ads Fellow Americans has bought are the ones in the Facebook and Google ad archives. He attributed the discrepancy between those reports and the FEC data to the fact that Fellow Americans both creates ad content and conducts tests to see how well they perform on behalf of other progressive groups like the Democratic Super PAC Priorities USA. As Fischer and Christ note in their report, Priorities did pick up on Fellow Americans' ads about President Trump's coronavirus response after Fellow Americans ran a small test.
"We are working with a network of progressive groups to test and share the results of ads that we're creating, including that ad," Lubin said. He conducted similar experiments on digital content in the lead up to the 2018 midterm elections.
While it's possible that smaller spending discrepancies can be explained this way, experts say that wouldn't explain a multi-million dollar difference, like the one the researchers found in Big Tent Project's reports. "It's pretty unlikely. That would be an all-time rip off job," said Jason Rosenbaum, vice president of the public affairs firm SKDKnickerbocker's digital arm. Rosenbaum was Hillary Clinton's director of digital advertising in 2016, and led Google's election and advocacy work before that.
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Wherever the money went, Rosenbaum said the system shouldn't force people to guess. "We have no idea where that money's going," he said. "The only funds that are accounted for are on the platforms that have chosen or were forced to self-regulate."
Lubin agrees. "Because Google and Facebook have created their own databases in lieu of the FEC doing it, we see gaps in the reporting that create misunderstanding and difficulty in understanding what is being done and why, in a context where those buys are only part of a larger strategy," he said.
Fischer, Christ, Rosenbaum and Lubin all say it's up to Congress to change the laws that govern platforms running political ads. But attempts to do that have, so far, been unsuccessful. After all, if there's anyone who stands to benefit from dark money groups' ability to stay in the dark, it's the people those groups help get elected.