DISCLOSE Act

Already under fire for mismanaging the Republican National Committee, Chairman Michael Steele displayed his bizarre and badly-uninformed take on the election yesterday on Meet the Press. Not only is there overwhelming evidence that groups that do not disclose the sources of their funding are participating in the election at unprecedented levels, but the Citizens United and SpeechNow decisions have allowed such groups to be more powerful and less transparent. When asked about the flood of money from outside groups in the election, Michael Steele inexplicably responded: “I don’t know what they’re talking about. No one’s produced one shred of evidence that any of that’s happening.”

Even though Republicans twice voted lockstep in the US Senate to filibuster the DISCLOSE Act, which would have made these groups reveal their donors, Steele tried to portray the Democrats as the opponents of disclosure legislation. In a disheartening lack of follow-through Gregory did not challenge Steele on this statement.

Steele ended the segment by calling for transparency and legislative fixes if necessary: “Absolutely, I am all for transparency, I think it is an appropriate part of the system, it instills the trust that people have in the system and it also avoids questions like this because that information is out there…but the law is what the law is right now, and if people are that bothered by it then the Congress needs to change it.”

For so-called “Super PACs” that are required to disclose their donors, like American Crossroads and the First Amendment Alliance, we have ample evidence that corporate and special interest money is flowing in. A recent New York Times report also demonstrated that corporate money is flowing into the US Chamber of Commerce’s electoral spending. But for 501c4 “social welfare” organizations, such as Crossroads GPS and the American Action Network, we do not know the identity of the donors.

Gregory pointed out to Steele that by law 501c4 groups “do not have to disclose,” and asked, “is that a problem in our politics when you can put a great deal of money into a campaign without disclosing your agenda or who you are?” Steele then said that Congress should “put up” and “change the law,” but that the lack of disclosure may not be a problem anyway: “we haven’t seen any evidence that it is, why are you saying that it is a problem?”

Polling confirms that the public is “bothered by it.” Numerous polls reveal that the vast majority of Americans disagree with the Citizens United decision, regardless of their political party, and oppose the inundation of special interest money in elections. Will Steele now call upon Republicans in Congress to end their filibuster of the DISCLOSE Act and stop resisting transparency in the system?

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In addition to the obvious legal questions involved in the pharmaceutical immunity case of Bruesewitz v. Wyeth, this case also has a political component that ties it to the midterm elections. If the Supreme Court interprets the Vaccine Act in a way that benefits injured parties, we can expect the giant pharmaceutical companies to push the next Congress to change the law. That would connect this case politically, if not legally, to Citizens United and the DISCLOSE Act.

As detailed in a recent People For report, powerful corporations, unleashed by the Roberts Court, are taking aim at our democracy and spending millions of dollars under cover of anonymity in order to purchase a pliant Republican congressional majority. Republican members of Congress will surely know who they can thank for their offices, but without the transparency rules included in the DISCLOSE Act, blocked by Republicans in Congress, ordinary Americans will have no way of knowing if the pharmaceutical companies are among the corporate sponsors of the newly elected Republican caucus.

That is one of the many reasons we must pass the DISCLOSE Act.

Republicans have given us a sneak peek of what they have in store for America if they succeed in taking over Congress on Election Day ... and it's not pretty.

On Tuesday, Republican senators voted in lockstep to block the repeal of Don't Ask, Don't Tell and the DREAM Act... just yesterday, they voted in unity to block the DISCLOSE Act for the second time. Corporate special interests are drowning out the voices of regular voters by dumping hundreds of millions of dollars into this year's elections, and every single Republican voted to block a bill that would add some basic fairness by simply requiring disclosure of who is behind political ads. Every. Single. Republican.

The unprecedented obstruction just does not stop. President Obama's judicial nominees have been held up endlessly. In some cases, they've needed to be re-nominated and have multiple Judiciary Committee votes despite being approved by the Committee the first time. Some of these nominees even passed in Committee unanimously, with no Republican opposition, but the "Party of No" has been intent on blocking even the most uncontroversial nominees from the Senate floor. Meanwhile, there are vacancies on the federal courts -- 11 seats of the 23 pending on the nominations calendar -- that have been declared "judicial emergencies" by the Administrative Office of the Courts. Our judicial system is hurting and so is Americans' access to justice.

It's not just the Senate. Yesterday, the House passed legislation to help small businesses, but only because of the Democratic majority -- just like with the DISCLOSE Act in the Senate, every single Republican voted "no." This vote came on the very same day that the GOP House Leadership released its "Pledge to America" -- in the rollout, Minority Leader Boehner and his cohorts mentioned "small businesses" no fewer than 18 times. The hypocrisy is simply staggering.

In both the Senate and the House, Republicans have consistently opposed tax relief for small businesses and the middle class, justifying their obstruction with phony, hypocritical arguments about spending. Republicans have tried to block extensions of unemployment benefits and aid for homeowners to prevent foreclosures, and Sen. Tom Coburn (R-OK) is even blocking a food safety bill that passed in the House with bipartisan support last summer and has overwhelming support from consumer groups. Meanwhile, Republicans are pushing to add billions, if not trillions, to the deficit by extending the Bush tax cuts for the richest 2%.

The Republicans have a clear agenda: to serve corporate special interests. They want to take back Congress but it's their policies that sunk our economy in the first place -- policies that encourage the outsourcing of jobs, allow Wall Street greed to go unchecked and punish middle and working-class families. They pretend to be on the side of small businesses because it's politically expedient, but even as they complain that letting the Bush income tax cuts expire for the top 2% hurts small business, the facts tell a different story as more than 98% of tax filers with small business income are not in that top 2% of the income tax. The Republican definition of "small business" is a mega corporation like Bechtel or PricewaterhouseCoopers. The only part of America to which they will ever make good on any "pledge" is Corporate America... and they'll do that at any cost. Perhaps that's why the GOP staffer who headed up the development of the "Pledge to America" was, up until April, a lobbyist for some of the most powerful oil, insurance and pharmaceutical and other corporate interests in the country -- including Exxon, AIG, Pfizer and the Chamber of Commerce.

So let's recap. Just this week, Republicans have proven their disdain for soldiers, students, the hurting middle class and even food consumers... Is there anyone they haven't left hung out to dry? Oh yeah... corporate special interests.

We can not put these people in charge again.

UPDATE: Add women to the groups of people Republican senators have hung out to dry just during the last weeks of September.

The U.S. Senate is currently debating the DISCLOSE Act. Passage of the DISCLOSE Act is essential if we are to mitigate the damage done to American democracy by Citizens United. This deeply flawed opinion has led to the unleashing of extraordinary corporate influence on elections at all levels in our country. In spite of this - or perhaps because of it - Republican obstructionists cynically sidetracked the DISCLOSE bill with a filibuster in July.

Senator Barbara Boxer, speaking in support of the bill, correctly stated that "the people have a right to know" who's spending millions to influence our elections.

Contrast that with her opponent, Carly Fiorina, who was pleased to accept the endorsement of the U.S. Chamber of Commerce. The Chamber not only opposes DISCLOSE, it is one of the main front groups that well-heeled corporations are using to hide their electoral activities.

It's really simple: The people's right to know vs. a corporation's right to skulk and hide. Kudos to Sen. Boxer for choosing the people.

As Congress returns to work this month, the Senate will likely have another chance to vote on the DISCLOSE Act, legislation meant to mitigate the damage of Citizens United by requiring full disclosure of corporate spending in elections.

The House passed the DISCLOSE Act in June. In July, it sank in the Senate, when not a single Republican was willing to break a filibuster on the bill. Moderate Republicans Scott Brown, Susan Collins, and Olympia Snowe, despite previous support for clean election legislation, all sided with their party to kill the bill.

In the Washington Post today, E. J. Dionne writes that the support of those three senators is key to the passage of the DISCLOSE Act—though the pressure they face to oppose it is greater than ever:

As moderate Republicans, Snowe and Collins are undoubtedly looking over their right shoulders, fearful that they may go the way of Sens. Lisa Murkowski and Bob Bennett. This helps explain why they went south during negotiations over the health-care bill.

But repairing Citizens United is not an ideological question, although some cast it that way. Fiscal conservatives should be as worried as anyone about corporations using their newfound power to extract expensive special benefits from the government. Even conservatives who opposed campaign reform in the past have always insisted that they favor disclosure of campaign contributions. Disclosure is now more important than ever.

Snowe, Collins and Brown have made their careers by touting their independence. But that claim doesn't come cheap. This is the issue on which their promissory note is due.

This election cycle has already produced plenty of examples of corporations funneling money through front groups to support or smear candidates. In an ideal world, every member of Congress would stand up to corporate lobbyists and support a bill that would throw light on that murky political strategy. But at the very least, a disclosure bill should have the active support of those who profess to be independent campaign reformers.
 

Even after the Supreme Court's Citizens United decision rolled back longstanding state and federal laws that attempted to limit corporate influence in democracy, opponents of any type of campaign finance rules have redoubled their efforts to weaken transparency in elections. Two right-wing political organizations and a business group recently sued to block the state of Minnesota from enforcing campaign disclosure and donation laws. They are seeking an injunction to prevent the implementation of the state's rule for corporations to disclose their political activities. In addition, they "seek to overturn prohibitions on corporations contributing directly to campaigns and parties." Currently, as a result of Citizens United, corporations can fund advocacy groups who can support and oppose certain candidates, but not the candidates themselves. If their lawsuit is successful, corporate financing of campaigns would expand to even greater levels.

Due to the state's current disclosure rules, donations from companies such as Target and BestBuy to the right-wing group MN Forward came to light. Without the DISCLOSE Act, organizations involved in federal elections are already able to conceal their donors, and President Obama recently warned against "a flood of attack ads run by shadowy groups with harmless-sounding names." "They don't want you to know which interests are paying for the ads," Obama said; "The only people who don't want to disclose the truth are people with something to hide."

If the plaintiffs in Minnesota (which includes a for-profit business and two conservative non-profits: the Taxpayers League of Minnesota and Minnesota Citizens Concerned for Life) are successful, not only would corporations be allowed to hide their political financing from the public, but may even be able to directly contribute to the campaigns of candidates for public office.

It is already extremely difficult, especially without the DISCLOSE Act, to discover corporate financing of political groups. As a report by the Washington Post explains:

Long-standing IRS regulations require some groups to reveal their donors, and that is why the agency suddenly finds itself with what some might see as a more crucial watchdog role, stepping in to monitor disclosure in the absence of the FEC. But the IRS rules also have long-standing loopholes and, with limited resources and enforcement tools, the nation's tax collector is not set up to be a campaign regulator.

"The chances of the IRS being able to catch a violation of the tax law around campaigns is virtually nil," said Marcus S. Owens, a lawyer with Caplin & Drysdale who directed the agency's tax-exempt organizations division for 10 years. "Certainly if it happens, it's going to be well after the election has already ended."

As the assault on the remaining campaign disclosure laws intensifies, spending in elections is about to climb to new heights. Borrell Associates predicts that the Citizens United decision will lead to $400 million in new ads this election season, and that "political ad spending will reach $4.2 billion this year, double the $2.1 billion the firm estimated was spent in 2008."

But the most serious opponents of the effort to shed light on corporate financing in elections are obstructionists in the Senate: the Republicans who vote lock-step to prevent the DISCLOSE Act from coming up for an up-or-down vote. President Obama's call for the Senate to reconsider the DISCLOSE Act, which already passed the House, reminds us that the fight against the enormous corporate clout in our democracy is not over:

While banks and insurance companies are heavily betting on Republicans this election year, we may never know what companies are behind third-party ads pushing for corporate-friendly policies and politicians. Since forty-one Republican senators voted in lock-step to block the DISCLOSE Act ("Democracy Is Strengthened by Casting Light On Spending in Elections"), the bill hasn't yet had an opportunity to receive an up-or-down vote in the Senate.

The DISCLOSE Act, which the House passed in June, would prohibit corporations that are foreign-owned or receive federal dollars from engaging in electoral activity, and would mandate that third party political groups publicize their donors and include disclaimers on advertisements. So far, however, the obstructionists in the Senate have derailed this drive for transparency in politics by blocking a vote on DISCLOSE. Unless the Senate leadership is able to break through this obstructionism when Congress comes back from its August recess,third party groups will have free license to spend handsomely on elections without releasing a single source of their funding.

A recent Fortune article points out why the DISCLOSE Act is needed, as even Goldman Sachs, which says it will not directly contribute to political organizations, "can publicly say it won't fund political ads, and still go right ahead doing it privately." As Tory Newmyer maintains: "[T]rade associations and other non-profit groups can now spend freely on ads attacking or supporting specific candidates. And because those groups don't always have to identify their funders, they provide a safe vehicle for corporations looking to launder their involvement in dicey election contests."

Due to a state law, the business-backed independent expenditure political committee Minnesota Forward was forced to publicly list its donors. However, when advocates found out that companies such as Target and BestBuy were behind a group that supports a gubernatorial candidate with a horrendous record on gay-rights and consumer protection, they encountered severe pushback from customers and advocates.

But while Target and BestBuy got caught, other corporations and affiliated groups learned from their mistakes. Dirk Van Dongen, the head of the National Association of Wholesaler Distributors, believes that the boycotts of Target won't stop other businesses from becoming involved in electoral activity, "noting that businesses can give anonymously to trade association and other non-profit campaign efforts."

In fact, Target did not promise to stop making political contributions, but would simply send them through a "review board" in the future. David Schultz, a campaign finance specialist at Hamline University, predicts that corporations, "exclusively driven by the Citizens United case," will increase their electoral spending by as much as 50% this year.

Corporate review boards do little to mitigate the impact of the new rules allowing for anonymous political engagement on the part of corporations. As Senator Chuck Schumer rightly maintains:

Allowing corporate and special interests, now because they have so much money, to pour that money into our political system without even disclosure, without even knowing who they are or what they are saying or why they are saying it, they are taking politics away, government away from the average person because of the influence of such large amounts of dollars.

Citizens United empowered corporate and special interest lobbyists to spend unlimited amounts influencing elections. Not surprisingly, lobbyists hired by powerful interests are now the most vocal opponents of campaign finance reform. Roll Call reports that these lobbyists outdid themselves fighting the DISCLOSE Act:

Lobbying records make it difficult to determine exactly how much corporate interests and watchdog groups have spent trying the influence the bill since it was introduced this spring.

Still, the public disclosures clearly show that since April 1, more than 100 lobbying firms, corporations, unions, watchdog groups and trade associations have registered to influence facets of the DISCLOSE Act, which would bulk up disclosure requirements for companies, trade associations and unions that run televised political ads with unregulated money.

Republicans succeeded today in blocking Senate consideration of the DISCLOSE Act, a modest first attempt to start reigning in the money-in-politics free-for-all the Supreme Court set loose in January’s Citizens United decision.

The successful filibuster of DISCLOSE is frustrating, but it makes one thing very clear: the only way for voters to fully take back our democracy is to pass a Constitutional Amendment undoing the damage of Citizens United.

After the Senate’s vote on DISCLOSE, Sen. Max Baucus introduced a resolution calling for just such an amendment:

Baucus said:

The impact of Citizens United goes well beyond merely changing campaign finance law. This decision will impact the ability of Congress, as well as State and local legislatures, to pass laws designed to protect its constituents—individual Americans—when such legislation comes under fierce objection by large corporations. Corporations are now free to spend millions targeting individual lawmakers. Lawmakers’ ability to pass laws such as consumer safety or investor protection now faces even greater challenges when such laws merely threaten the corporate bottom line.

Congress and the American people must respond swiftly and firmly. The Supreme Court’s ruling in Citizens United has severely altered Congress’s ability to limit corporate spending in our electoral process.

The amendment simply returns the power of regulating election spending to Congress and the states. Here it is in its entirety:

Section 1. Congress shall have the power to regulate the contribution of funds by corporations and labor organizations to a candidate for election to, or for nomination for election to, a Federal office, and the power to regulate the expenditure of funds by corporations and labor organizations made in support of, or opposition to, such candidates.

Section 2. A State shall have the power to regulate the contribution of funds by corporations and labor organizations to a candidate for election to, or for nomination for election to, public office in the State, and the power to regulate the expenditure of funds by corporations and labor organizations made in support of, or opposition to, such candidates.

Section 3. Nothing contained in this Amendment shall be construed to allow Congress or a State to make any law abridging the freedom of the press.”

We’ve asked all federal elected officials and candidates to sign on to a pledge to support a Constitutional Amendment to reverse Citizens United. Find out more at www.pledgefordemocracy.org.