Senate Holds Hearing on Need for Disclosing Money in Federal Elections

If sunlight is the best disinfectant, our system of funding elections could use a whole lot more of it. This morning a Senate committee is holding a hearing on the DISCLOSE Act and the need for increased transparency surrounding money in federal elections.

Disclosure of political spending is key to the functioning of a democracy, allowing voters to understand who is behind political information and what the funder’s agenda may be. Even in the Supreme Court’s damaging Citizens United decision that opened the door to unlimited corporate political spending, eight of the nine justices supported disclosure laws.

Unfortunately, as Rep. Chris Van Hollen recently noted in an op-ed, “the floodgates were opened to outside spending, but the disclosure has yet to follow.” He wrote:

At the time, many were concerned that corporations would be pressured to open up their corporate coffers for the purpose of making political expenditures but would prefer to do so anonymously to avoid the backlash from their customers or shareholders. Four years later, in light of experiencing the two most expensive elections in history since the decision, it appears that these fears were well-founded. Outside money has poured into campaigns and it has done so under the cover of darkness, as a cottage industry has emerged to funnel money from corporations and others, into federal elections through non-profit groups that are not required to disclose their donors.

The current influx of dark money into our democracy threatens the integrity of our political system, and Americans know it. Click on our graphic below below to share it on Facebook and show your support for increased transparency of political money:

 

PFAW

Cruz Holds Up Government Over Good Government Measure

There is no shortage of senators opposed to the DISCLOSE Act. But while any of them will no doubt bloviate on why shining a light on campaign ad expenditures somehow limits free speech, junior Texas Senator Ted Cruz has taken his distaste for sunshine to a new level this month by holding the Federal Communications Commission hostage over the matter. Luckily, Sen. Cruz has folded, in part due to his dwindling stock among GOP leaders.

With two seats vacant on the FCC, the Senate Commerce committee held confirmation hearings this summer on candidates to fill the commission. While Michael O’Rielly, an advisor to Sen. Cornyn of Texas, faced a breezy nomination hearing in September, nominee Tom Wheeler’s June hearing grabbed media attention thanks to Sen. Cruz. Mr. Wheeler, a long time industry leader and President Obama’s nominee to chair the Commission, was asked by the senator for his thoughts on the FCC’s role in campaign ad disclosure. When Mr. Wheeler replied frankly that he did not know enough about the matter and could not answer, Sen. Cruz threatened to hold up the confirmation process until he was given a different answer.

Once the federal government reopened this month, the Senate was poised to pass the two nominees so that the FCC could handle its full docket of work. Then Sen. Cruz caused a new shutdown, this time blocking a unanimous consent confirmation vote for Mr. Wheeler because he wanted the presumptive chairman of the FCC to effectively set policy without the resources of the Commission at his disposal. With Mr. Wheeler’s vote tied to Mr. O’Rielly’s, the FCC was thus left without a chairman and its fifth commissioner. In the Senate, there are only two ways to overcome a hold like Sen. Cruz’s. The first is for the senator in question to remove his hold, while the other is to override the senator by way of a cloture vote requiring a supermajority of 60 votes.

Senate Majority Leader Harry Reid decided to call Sen. Cruz on his bluff Monday night. Sources have indicated that, given Sen. Cruz’s particularly vocal role in this month’s government shutdown,  he has little clout among his Senate GOP peers. With a losing cloture vote imminent, it looks like Sen. Cruz set up a meeting Tuesday with Mr. Wheeler to hash out the nominee’s thoughts on disclosure with the senator. Mr. Wheeler came out of the meeting saying that this move by the FCC was not a priority, which mollified the Texas statesman. It is worth noting that this does not mean the FCC won’t take up disclosure rules  for broadcasters airing political ads under a Wheeler chairmanship.

Sen. Cruz has regarded the FCC as an enemy in his anti-disclosure fight since March when Florida’s senior senator, Bill Nelson (who saw  almost $10 million spent against him by outside organizations last November), addressed the issue. Sen. Nelson pointed out during a Committee hearing (at the 2:06:35 mark) that the FCC must require full on-air disclosure of campaign ad sponsors, and that this was not limited to just the umbrella entity (see Section 73.1212 for the authorizing language’s full text). He went on to say that the Supreme Court looked approvingly on disclosure in its Citizens United decision. Sen. Cruz’s response was to call such a reading “overtly partisan,” and that it would “undermine the integrity of the Commission,” which he stressed is non-partisan (2:28:05).

Yes, Sen. Cruz called the FCC non-partisan, then turned around and used it as a partisan tool to lock the Senate up over the matter of campaign disclosure, all while trying to force an agency nominee to set policy before he steps foot in the door. 

Both Mr. Wheeler and Mr. O’Rielly got their Senate confirmation votes yesterday.

PFAW Foundation

PFAW Releases New Toolkit on Getting Money Out and Voters In to Our Democracy

Americans today face twin threats to the integrity of our elections. The threats are multifaceted and formidable, involving all branches of government at the local, state and federal level – from legislative bodies, to governorships, to courthouses. The aims are clear:

  • Manipulate the campaign finance system to get "the right people" elected.
  • Manipulate the balloting process to make it harder for "the wrong people" to vote.

These measures must be confronted. But we also need long-term proactive and pro-democracy strategies of our own.

The “Money Out, Voters In” campaign embodies this long-term vision premised on the concept of political equality, of one person = one vote.

We believe in a democratic system where all Americans have equal access to the voting booth and where all Americans, regardless of wealth, can express their views to one another and their government on a level playing field.

Through A Guide to Democratic Reform, a new toolkit released today by People For the American Way, we provide the structural framework for enacting this vision. We do not have all the answers, nor could we. We must embrace an evolution of ideas, tactics, and legislative language to achieve our goals. Yet, as the local, state, and federal initiatives cited herein show, much of that work is already well-underway.

Click here for information about critical allies and other resources.

PFAW

The Most Important Conservative Funder You’ve Never Heard Of

It was a big week for lifting the veil – at least a little – on the secretive world of conservative groups funding political campaigns. On Wednesday we wrote about new reports on two of the Right’s shadowy front groups which have been able to disguise the transfer of large sums of money to organizations supporting Republican causes and candidates. 

Then Politico brought us a look inside what they call “the Koch brothers’ secret bank,” a previously unknown group called Freedom Partners which gave a quarter billion dollars in 2012 to sway public debate further to the right. Mike Allen and Jim VandeHei report:

The group, Freedom Partners, and its president, Marc Short, serve as an outlet for the ideas and funds of the mysterious Koch brothers, cutting checks as large as $63 million to groups promoting conservative causes, according to an IRS document to be filed shortly…

The group has about 200 donors, each paying at least $100,000 in annual dues. It raised $256 million in the year after its creation in November 2011, the document shows. And it made grants of $236 million — meaning a totally unknown group was the largest sugar daddy for conservative groups in the last election, second in total spending only to Karl Rove’s American Crossroads and Crossroads GPS, which together spent about $300 million. [emphasis added]

Though you likely have not heard of Freedom Partners before, you’ve heard of the groups it funds – including the NRA, Americans for Prosperity, Heritage Action for America, and Tea Party Patriots. According to their newly-launched website, Freedom Partners is “promoting the principles of a free market and free society” by advocating against scourges like “cronyism in America.” 

This, from one of the biggest spenders in the last election.

Other than the Koch brothers, who are the donors behind this massively influential group?  At this point, it’s hard to know. Despite the group’s president’s insistence that “our members are proud to be part of [the organization],” Freedom Partner’s membership page does not list a single one.  It’s yet another example of the need for legislation like the DISCLOSE Act, which would shed light on the major donors behind the secretive outside groups attempting to shape our elections – and our country.
 

PFAW

New Insights Into the Right’s Big Money Shell Game Highlight Need for the DISCLOSE Act

In today’s legal landscape, “following the money” is tricky – but a new report released yesterday shows why this work is critical to anyone who cares about progressive change. The latest digging from the Center for Responsive Politics’ Open Secrets blog has uncovered new information about a multi-tiered money laundering operation through which tax-exempt groups funnel millions to groups supporting right-wing causes and candidates. 

Operating behind a thick veil of secrecy, groups like TC4 Trust and the Center to Protect Patient Rights – which Open Secrets describes as “‘shadow money mailboxes’ – groups that do virtually nothing but pass grants through to other politically active 501(c)(4) organizations” – are able to hide both their donors and their recipients.  By funneling grants through “sub-units,” which are owned by the larger groups but have different names, groups like TC4 Trust put millions into the pockets of 501(c)4 organizations supporting Republican causes in the 2012 elections, such as the advocacy arm of Focus on the Family.

As Open Secrets reports,

[T]heir financial ties run far deeper than previously known.  The groups, TC4 Trust and the Center to Protect Patient Rights – both of which have connections to the billionaire industrialist Koch brothers – have been playing a high-stakes game of hide-the-ball, disguising transfers of millions of dollars from one to the other behind a veil of Delaware limited liability corporations.

The source of political advocacy matters.  This latest example of dark money donor groups obscuring the links of their money trail underscores the urgent need for legislation like the DISCLOSE Act.  This act would bring some basic transparency to the electoral system and require outside groups spending money in elections to disclose their donors – including the original source of donations.  The measure, which was blocked by Senate Republicans in both 2010 and 2012, is a common-sense solution that would help the American people understand who is trying to influence their political opinions and their votes.

PFAW

Dirty Money Underwriting Pro-Romney Super PAC?

Although he voted to block the Senate from considering the DISCLOSE Act yesterday, Senator John McCain is usually a supporter of campaign finance reform. In an interview on PBS Newshour, McCain said that the astronomical contributions of Mitt Romney’s major financier, casino billionaire Sheldon Adelson, are particularly problematic because those contributions amount to foreign money influencing U.S. elections:

MCCAIN: Mr. Adeleson [sic], who gave large amounts of money to the Gingrich campaign and much of Mr. Adeleson’s casino profits, that go to him, come from this casino in Macau.

WOODRUFF: Which says what?

MCCAIN: This which says that obviously, maybe in a round-about way, foreign money is coming into an American campaign, political campaigns.

Regardless of where Adelson acquired his billions, a new report by ProPublica and PBS reveals that Adelson’s business dealings may have been improper or even illegal under the Foreign Corrupt Practices Act, complete with shady dealings with the Chinese mob and crooked politicians. As Think Progress summarizes, Adelson’s operation in Macau may have been made possible because of payments to Chinese organized crime figures:

Among the junket companies under scrutiny is a concern that records show was financed by Cheung Chi Tai, a Hong Kong businessman.

Cheung was named in a 1992 U.S. Senate report as a leader of a Chinese organized crime gang, or triad. A casino in Macau owned by Las Vegas Sands granted tens of millions of dollars in credit to a junket backed by Cheung, documents show.

Cheung did not respond to requests for comment.

Another document says that a Las Vegas Sands subsidiary did business with Charles Heung, a well-known Hong Kong film producer who was identified as an office holder in the Sun Yee On triad in the same 1992 Senate report. Heung, who has repeatedly denied any involvement in organized crime, did not return phone calls.

Because Nevada gambling authorities forbid doing any business with organized crime, Sands’s Las Vegas gambling licenses could hang in the balance. (Adelson and his company refused to comment for the PBS story.) But Adelson has other issues with his China operations.

Sheldon Adelson has pledged to give up to $100 million to unseat President Obama. But according to one of Adelson’s friends, he could spend far more than that: “We think ‘$100 million, wow!’ But it’s a meaningless amount of money to [Adelson].”

The system we have today allows for single individuals to give as much potentially money – clean or dirty – as they want to buy an election. This isn’t how democracy is supposed to work. Some sunlight is beginning to shine through on how Mitt Romney is benefitting from Sheldon Adelson’s shadowy dealings, but the extent of unaccountable money in our elections runs even deeper. Without a constitutional amendment to overturn Citizens United, the people will be unable to stop secret contributions by special interests, no matter where the money comes from.

PFAW

For DISCLOSE Before They Were Against It

The DISCLOSE 2012 Act is a simple and seemingly-unobjectionable proposal that would require outside groups spending money in elections to disclose their donors and help inform the American people as to who is trying to sway their votes. Yet the proposal faces a slim (read: zero) chance of passage in the Senate this week. It even had partisan support when it was introduced first introduced in 2010 as a response to the Supreme Court’s flawed Citizens United decision, and Republican support for general campaign-related expenditures dates back many years.

Not anymore. The Huffington Post notes that there are 14 Republican senators serving since 2000 who previously voted for disclosure, but today would rather protect the anonymity of wealthy special interests and corporations than shed light on the funders of today’s endless barrage of attack ads.

These Senators have been whipped into line by Minority Leader Mitch McConnell (who was undoubtedly whipped into line by wealthy special interests and corporations who write big checks to Republicans, and would prefer to continue to do so in secret). Senator McConnell himself has flip-flopped on the issue:

Sen. McConnell in 2000: “Why would a little disclosure be better than a lot of disclosure?”

Sen. McConnell in 2012: “[Disclosure is] a cynical effort to muzzle critics of this administration and its allies in Congress.”

The Sunlight Foundation has put together a video “depicting” other Republicans’ contradictory statements on the DISCLOSE Act. Watch it here:

 

PFAW

Obstruction to Election Spending Disclosure: Welcome to 2012 America

Today, Monday July 16th 2012, the U.S. Senate will vote on whether to end the filibuster of the DISCLOSE Act, and more likely than not, the effort to bring the popular bill to a final floor vote will fail. Yet the DISCLOSE Act is a bill so fundamentally logical and conspicuously necessary for the health of our democracy, it is mind boggling that even one U.S. Senator would dare to not support it - let alone label it so extreme that the Senate should not even be allowed to vote on it.

The bill is about transparency, and the American people’s right to know who’s funding the campaign ads that are flooding our airwaves and influencing our opinions.

Here’s a brief history on how we got here:

On January 21st, 2010, the Supreme Court issued its landmark ruling in Citizens United v. FEC, overturning key provisions of the McCain-Feingold Act, creating a new campaign finance system in which corporations and unions could use treasury funds to influence elections.

Three months later, the D.C. Court of appeals struck down federal law limiting contributions to entities engaged in independent expenditures in the case SpeechNOW v. FEC. To reach their decision, the lower court relied upon the rationale put forth in Citizens United, particularly that “independent expenditures … do not give rise to corruption or the appearance of corruption.” The Roberts Court declined to consider an appeal of the lower court’s ruling in SpeechNOW, and thus ushered in the era of the super PAC.

Yet anonymous spending was not supposed to be the result of these rulings.

In the opinion of Justice Kennedy, writing for eight of the nine justices on the Court, it was assumed that disclosure requirements were constitutionally permissible and would serve as a check in this new I.E. spending reality.

Kennedy wrote:

With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.

… citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.

… disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.


But that transparency has not been codified into law.  At present, there is no law or statute that requires entities that make independent expenditures to disclose to the general public the identities of those who gave money to the entity specifically for political ads and other spending.

Following Citizens United in 2010, Congress came close to mandating disclosure when the House passed the DISCLOSE act. The bill had strong majority support in the Senate, so the Republicans filibustered it. Unfortunately, the effort to end the filibuster failed in the Senate by one vote. It died on the Senate floor with a 59 to 39 split on a cloture motion, presciently extending what historian Robert Caro wrote about the Senate of the late 1950’s to the present day, that “For almost a century, [the Senate] had not merely embodied but had empowered, with an immense power, the forces of conservatism and reaction in America.”

Yet disclosure should not be a conservative issue or a liberal issue. This is a democratic issue, with the fundamentals of our democracy at stake. In 2012 America however, Republican political partisanship and hunger for power at all costs have taken precedent over the need for reform; and Republican Senate leadership is holding firm. Issues vital to the health of our democracy - whether they be voting rights or campaign finance rules - are now warped into partisan issues.

Senate Minority Leader Mitch McConnell and opponents of the DISCLOSE act are desperate to find ways to discredit it and justify their unjustifiable opposition.

Take for example, McConnell’s piece in the USA Today, "Disclose Act is un-American," where he writes:

The Supreme Court, in Citizens United v. the FEC, correctly ruled that Congress may not ban political speech based on the identity of the speaker. (sic)

The Disclose Act would make this and any future administration's ability to punish and intimidate its political enemies even easier. It is the Democrats' attempt to get around the court by compelling certain targeted groups to disclose the names of their donors, while excluding others, such as unions, from doing the same.

While Senator McConnell cries out "un-American" and "unions" to scare his base - like Senator McCarthy once cried out "communists" on the Senate floor - the facts are irrefutable. Under the bill’s provisions, unions are treated equally to for-profit corporations. Case closed.

Furthermore, supporting the DISCLOSE Act is not a political power grab; however to reject it is, since the majority of the undisclosed money is benefiting the Republican party. So it goes for the bill’s opponents. Take reality and turn it on its head.

McConnell then declares:

This bill calls for government-compelled disclosure of contributions to all grassroots groups, which is far more dangerous than its proponents admit.

The Supreme Court addressed this issue in 1958 in NAACP v. Alabama, ruling that forced disclosure of the NAACP's member lists by Alabama would discourage people from freely associating with a cause or group.

Once again, McConnell has to obfuscate the truth to hide the fact that he has no real argument.

The bill requires organizations (corporations, unions, super PACs, non-profits) to report within 24 hours of making an election expenditure of $10,000 or more. Donors that give $10,000 or more to the organization would be made public, unless they specify that their contributions to the organization cannot be used for election spending. The idea that every grassroots group will have to turn in their membership lists to the evil federal government is a scare tactic, and unsubstantiated.

The bill is designed to remove the added layer of anonymity ‘speakers’ are currently hiding behind by donating to nondescript (c)(4) and (c)(6) organizations that – unlike for-profit corporations, advocacy groups, and unions – do not operate in the public sphere, and whose purpose generally is unknown to the public.

One would imagine that halting this egregious process would be a quick fix. But one would also imagine the same for voting on judicial nominations, or extending the debt ceiling, or allowing Americans to cast a vote on Election Day. Unfortunately, that’s not how 2012 America functions.

The most unbelievable part of McConnell’s and Republican obstruction is that this DISCLOSE act is a watered-down version of its original. The 2010 provisions that would have required funders to “Stand By Their Ads” has been removed, as have the prohibition on electoral advocacy participation by corporations that received TARP funds. The bill will not be effective until 2013, so would not even affect this election cycle. But in the end, it’s definitely a step in the right direction and should be a no brainer for any elected official committed to the integrity of our elections.

Yet we are bound to hear the absurd cry of “union carve-out” tonight on the Senate floor when the bill is debated, and all the other diversionary arguments. The obstructionists need straw men, since without them, there could only be silence.

PFAW

DISCLOSE Act to Get Senate Vote

Next week, the Senate will vote on the DISCLOSE Act, which would bring much needed transparency to the corporate and special interest money that allows the wealthiest few to take over our airways and coöpt our elections. Since the Supreme Court’s 2010 Citizens United decision, corporations have been able to spend freely from their treasuries to overpower the voice of the American people.

While a constitutional amendment to overturn Citizens United or a change to the composition of the Supreme Court are the only ways to completely reverse that decision, the DISCLOSE Act is a strong step in the right direction.

It’s not a new idea. First introduced in 2010 in response to Citizens United, the bill would require groups airing election ads to disclose the source of the money. Because ads can be misleading, it is essential to for voters to know who is behind them in order to properly evaluate the constant inundation of political messages. It is a simple step to increase transparency in our elections.

Of course, the GOP blocked it.

Republicans in Congress weren’t always opposed to disclosure. Senate Minority Leader Mitch McConnell once said, way back in 2000, “Why would a little disclosure be better than a lot of disclosure?” Yet after Citizens United, he’s dramatically changed his tune, calling disclousre “a cynical effort to muzzle critics of this administration and its allies in Congress.”

The Republicans’ change in tune isn’t surprising, considering that outside spending overwhelmingly favors the GOP.

PFAW

Senators Argue for Constitutional Amendment, DISCLOSE Act on Senate Floor

On Capitol Hill yesterday, Senators Sheldon Whitehouse (D-RI), Jeff Merkely (D-OR), Tom Udall (D-NM) and others took to the floor to speak about the state of campaign finance today, thanks to the Supreme Court’s decision in Citizens United. Although the only way to completely fix the decision would be for the Supreme Court to reverse itself or to pass a Constitutional amendment to overturn Citizens United, the DISCLOSE Act of 2012 (“Disclose 2.0”) is critically important legislation that would bring much-needed transparency to the political process.

Sen. Whitehouse began by analyzing the dramatic increase in unregulated, anonymous spending in our elections. “In the 2010 elections, the first after Citizens United, there was more than a four-fold increase in expenditures from Super PACS and other outside groups compared to 2006, with nearly three-fourths of political advertising coming from sources that were prohibited in 2006.” He noted that outside groups are vastly outspending the campaigns themselves – yet there is so much overlap between campaigns and PACs that their differences are hard to distinguish.

“Our campaign finance system is broken. Action is required to fix it,” Sen. Whitehouse said. “Americans are disgusted by campaigns that succeed or fail based on how many billionaires the candidates have in their pockets.”

Senator Udall made the case that amending the Constitution to ensure that elections remain about the quality of ideas instead of the quantity of dollars spent is a worthy cause: “We cannot truly fix this broken system until we undo the flawed premise that spending money on elections is the same thing as exercising free speech. That can only be achieved in two ways: the Court can overturn Buckley and subsequent decisions based on it, something the current court seems highly unlikely to do; or we can amend the Constitution to not only overturn the previous bad Court decision, but also to prevent future ones. Until then, we will fall short of the real reform that is needed.”

“I know amending the Constitution is difficult, and it should be,” continued Sen. Udall, who then quoted PFAW Senior Fellow Jamie Raskin: "'A constitutional amendment always seems impossible, until it becomes inevitable.’” Sen. Udall also noted the growing grassroots movement that has led to more than 200 state and local resolutions calling for a Constitutional amendment that have been adopted around the country.

Senator Jeff Merkley engaged in a colloquy with Senator Whitehouse, focusing on the first three words of the preamble to the Constitution, “We the People.” The senators discussed the fundamental conflict with that fundamental value posed by the Citizens United decision. Watch below:

PFAW