STOPPING THE SECRET MONEY IN OUR ELECTIONS

ABSTRACT: Dark money organizations – non-profit, tax exempt groups that do not have to disclose their donors – are spending tens of millions of dollars every year in our election campaigns. This means that when voters go to vote they don’t know who paid for the dark money funded ads, mailings, and other political activity that has tried to influence their voting.

Seventy-five percent of the public, including equal shares of Republicans and Democrats, believe that contributors should be disclosed. There are multiple ways to address the problem of large amounts of anonymous, dark money being spent in our election campaigns:

  • Pass a federal Constitutional amendment to overturn the Citizens United and related Supreme Court decisions that allow unlimited spending in our election campaigns
  • Require clear and timely disclosure of donors to dark money organizations
  • Implement a Securities and Exchange Commission (SEC) rule requiring corporations to disclose their political spending
  • Strengthen IRS regulation of non-profit, tax-exempt organizations that engage in political activity
  • Strengthen Federal Election Commission requirements for disclosure of political spending

In a democracy, voters have a right and a need to know who is trying to influence their votes and who is supporting or opposing candidates for office. Therefore, clear and timely disclosure of the sources of funds for political activity is essential.

FULL POST: In my last post, I discussed the increasing significance dark money organizations – non-profit, tax exempt groups that do not have to disclose their donors – are playing in our election campaigns and politics at the federal, state, and even local levels. They are spending tens of millions of dollars every year, which will probably grow to over $100 million in the 2016 presidential campaign.

This means that when voters go to vote they don’t know who paid for the dark money funded ads, mailings, and other political activity that has tried to influence their voting. Therefore, they aren’t able to make an informed judgment about the interests or purposes behind these political messages.

Seventy-five percent of the public, including equal shares of Republicans and Democrats, believe that contributors should be disclosed. Even Supreme Court Justice Kennedy, in the majority opinion in the Citizens United case [1] that allows unlimited corporate spending in our elections, wrote that “disclosure permits citizens and shareholders to react to the speech [i.e., spending] of corporate entities in a proper way.”

There are multiple ways to address the problem of large amounts of anonymous, dark money being spent in our election campaigns. [2] Ultimately, I believe we need a federal Constitutional amendment to overturn Citizens United and related Supreme Court decisions. Such amendment would state that 1) The rights protected by the Bill of Rights and the U.S. Constitution are the rights of human beings only and not of corporations or other organizations, and 2) Congress and the states may place limits on political contributions and spending to ensure that our elections are fair and that all citizens can participate and have their voices heard in a reasonably equitable manner.

Given that a Constitutional amendment will not happen quickly, there are a number of steps that could and should be taken in the short-term:

  • Require clear and timely disclosure of donors to dark money organizations through federal and state laws and executive action by the President.
  • Implement a Securities and Exchange Commission (SEC) rule requiring corporations to disclose their political spending.
  • Strengthen Internal Revenue Service (IRS) regulation of non-profit, tax-exempt organizations that engage in political activity.
  • Strengthen Federal Election Commission requirements for disclosure of political spending.

Shortly after the Citizens United ruling in 2010, Congress considered the DISCLOSE Act that would have mandated disclosure and reporting of all spending in federal election campaigns. The bill passed the House but failed by one vote to overcome a Republican filibuster in the Senate. [3] Congress should consider this legislation again in light of the tremendous growth of dark money spending and it should pass the bill this time. States should pass similar legislation to cover state and local elections.

In the meantime, President Obama should sign an Executive Order requiring all federal contractors to disclose their political spending. In addition, the Securities and Exchange Commission (SEC) should act expeditiously to implement a proposed disclosure rule. It would require publicly traded corporations to disclose their political spending. Given the SEC’s mission of protecting shareholders through corporate accountability and transparency, such a rule would be very appropriate. [4]

Along the same lines, in 2013, after years of development, the IRS proposed a rule for non-profit, tax exempt organizations that defined political activity and required timely reporting of donors. The goal was to increase transparency so voters in the 2016 elections would know who was paying for political ads and other campaign activity before entering the voting booth. There was lots of pushback over the proposed rule. Conservative advocacy groups and their supporters in Congress went so far as to manufacture a crisis surrounding the IRS’s oversight of such organizations to pressure the IRS into delaying the transparency rule and to discredit the IRS’s efforts to regulate dark money. [5]

Finally, the other entity that could and should require disclosure of the sources of campaign spending, the Federal Election Commission (FEC), is effectively paralyzed. Its members are required to be split equally between Democrats and Republicans and must be confirmed by the Senate. With a politicized confirmation process in the Senate and the current hyper-partisanship in Congress filtering down to FEC members, the FEC is gridlocked and basically unable to function.

In a democracy, voters have a right and a need to know who is trying to influence their votes and who is supporting or opposing candidates for office. Therefore, clear and timely disclosure of the sources of funds for political activity is essential. I urge you to let your elected officials and candidates for office at all levels know that you support disclosure of the sources of political spending so you can be an informed voter.

[1]       In Citizens United and related decisions the Supreme Court ruled that individuals and organizations can spend unlimited amounts of money in our election campaigns. Therefore, these dark money organizations can accept unlimited donations and spend unlimited sums. Specifically, the Court ruled that corporations and other organizations are people and have the same first amendment rights of free speech as actual human beings under the Bill of Rights and the U.S. Constitution. The rulings also said that spending money in elections (and elsewhere) is speech and is protected by freedom of speech rights.

[2]       People for the American Way and coalition partners, July 2015, “Fighting big money, empowering people: A 21st century democracy agenda,” (http://www.pfaw.org/sites/default/files/PresidentialPolicy831.pdf)

[3]       Kuns, K., 7/1/15, “The dark politics of dark money,” The Washington Spectator

[4]       U.S. PIRG, 10/12/15, “Members of Senate Banking Committee, former SEC Commissioner urge SEC nominees to support political disclosure rule,” Common Dreams (http://www.commondreams.org/newswire/2015/10/21/members-senate-banking-committee-former-sec-commissioner-urge-sec-nominees)

[5]       Kuns, K., 7/1/15, see above

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