Though the obfuscation caused by multilayered funding was previously known, our study for the first time reveals the remarkable growth of the problem among spenders who can technically claim to be transparent because they disclose donors. On average gray money ballooned from 15 percent of all outside spending in 2006 to 59 percent of outside spending in 2014, across the six states we examined out of nine that offered sufficient data. These states—Alaska, Arizona, California, Colorado, Maine, and Massachusetts—as a set are geographically, demographically, and politically diverse, and hold one-fifth of the nation’s population.

Though dark money rose rapidly—growing on average 38 times greater across the six states by 2014, faster than at the federal level—the amounts of gray money, which also increased, were far greater and accounted for the bulk of an acute transparency problem. From 2006 to 2014, gray money climbed from an average of $6 million across the six states to $18.8 million. This jump came from a big shift in where PACs got their money. Ten years ago, just a quarter of contributions to PACs in these states came from other PACs rather than from readily identifiable people or businesses; by 2014, two thirds of money going into PACs was coming from other PACs.

The combined effect of increases in gray money and dark money by 2014 was an astonishingly steep decline in the transparency of outside spending. While in 2006 more than three quarters of outside spending on average was fully transparent, by 2014 less than a third—29 percent—of outside spending was fully transparent.

Gray money can be a deliberate tactic to obscure the original source of campaign funding. In Los Angeles, a local PAC bearing the folksy name of the Parent Teacher Alliance in Support of Rodriguez, Galatzan, and Valdovic for School Board 2015 spent $2.3 million in the 2015 school board election. Its existence served to give a “local flavor” to the advertising, according to Richard Garcia, a spokesperson for the California Charter Schools Association, which created the PAC. Those funds came mostly from prominent mega-donors including billionaire Michael Bloomberg, an arrangement first reported by the Los Angeles Times. Bloomberg and other individual donors did not appear on the public disclosures filed by the Parent Teacher Alliance. Instead, their money went through the donor that was disclosed, the California Charter Schools Association Advocates.

Though dark-money groups draw the strongest criticism, gray-money groups present similar problems, albeit wrapped in more-attractive packaging. Their innocuous names obscure vital information voters need to evaluate their messages and understand which candidates or ballot measures are backed by which interests. Washington State Senator Andy Billig, who recently sponsored a bill to combat gray money, explained that with opaque spending, “donors get the political benefit of a hit piece, while still protecting their identity.”