Federal Election Commission

The Influx of Dark Money Could (Technically) Stop Tomorrow

Two weeks ago, Senate Democrats filed cloture on the Republican-led filibuster of the DISCLOSE Act, and failed to achieve the necessary 60 votes to bring the bill to the floor. Thus the DISCLOSE Act died once again, as it did in 2010, at the hands of Republican Senators who prefer obstruction and dark money over functionality and transparency. And unless there is an abrupt, unexpected reversal of the tide in the Senate, those who wish to bring a higher level of accountability to our democracy will, in the short term, have to explore alternative routes to bring about such reforms.

Those alternative routes exist in the federal agencies that interpret laws passed by Congress, but that so far have done a poor job in doing so correctly.

For confirmation of this, one need only look at the significant dilution of the McCain-Feingold Act of 2002, which had strict provisions requiring outside groups – including 501(c)(6)’s & 501(c)(4)’s – who participate in electioneering communications (any communication about a clearly identified candidate on satellite, T.V., or radio within 30 days of a primary or 60 days of a general election to a relevant targeted audience) to disclose their donors. The Supreme Court’s Citizens United ruling upheld this part of the law, with eight of the nine justices in agreement.

However, transparency would take a back seat with the Federal Elections Commission’s interpretation of the law, in which a loophole to disclosure was written into their regulations. That FEC regulation only requires disclosure of donors for 501(c)(4)’s and 501(c)(6)’s if those donors specifically earmark their donations for the purpose of electioneering communications. Thus as long as a donor does not require specifics for an organization on how to use their donation, disclosure of the donor’s identity is not legally required. Yet the disclosure provisions of McCain Feingold were not written – and were never meant to be interpreted – this way.

On April 2, 2012 Congressman Chris Van Hollen of Maryland’s 8th District won a lawsuit he filed against the FEC challenging the agency’s interpretation of the law. D.C. District Court Judge Amy Jackson found that the FEC had severely watered down existing legal requirements to disclose donors in campaign-related ads, stating “…Congress did not delegate authority to the FEC to narrow the disclosure requirement through agency rulemaking.” While Judge Jackson’s ruling is supposed to restore the statutory requirement that requires greater disclosure of the donors who provide funding for electioneering communications, it remains unclear that it will be implemented. Paul Ryan, FEC program director and associate legal counsel at the nonpartisan Campaign Legal Center has assessed, “Unfortunately, it’s highly unlikely that this dysfunctional commission will heed the court’s order anytime soon.” Implementation will also be delayed further due to appeals from conservative groups.

Had Congress’ law had been implemented accurately, full disclosure would have been the reality of the 2010 congressional races, which instead were marred by over $135 million in undisclosed spending; and which continues to mar the current election cycle.

Another party at fault is the IRS, which has sat idly by as a number of overtly politically-based 501(c)(4)’s have engaged in an overabundance of election activity when they are supposed to be first and foremost social welfare organizations. It seems obvious to all that the primary activity of organizations like Crossroads GPS and American Action Network is to engage in political advocacy and spend hundreds of millions of dollars influencing elections. Due to IRS inaction on the issue, the donors of these organizations need not be publicly disclosed.

In June the IRS finally initiated steps to to investigate some of these organizations taking advantage of tax exempt status while at the same time being overly engaged in election processes, in particular Crossroads GPS. However it is unlikely that any actions or penalties will be taken or applied in the near future leaving these huge, undisclosed, tax-exempt pools of money to flood our electoral process for the foreseeable future.

Moreover, and perhaps more importantly, IRS regulations that implement Internal Revenue Code distort the intent of the law. As noted by Democracy 21 and the Campaign Legal Center in a letter to IRS commissioners:

The Internal Revenue Code provides that section 501(c)(4) groups must engage "exclusively" in social welfare activities. … The regulations implementing this provision state, however, that "social welfare" organizations must be "primarily engaged" in social welfare activities.

If, as Congress intended, 501(c)(4) groups could achieve their tax-exempt status only by “exclusively” engaging in social welfare activities, the Crossroad GPS’s of the world would instantly have their (c)(4) statuses revoked. Instead, as we’ve witnessed with the tax-exempt status of the American Legislative Exchange Council, the big money players are able to indirectly charge the American taxpayer for their lobbying and political activity by not paying their fair share, benefitting their entrenched interests and not the country as a whole.

We must not give up on transparency in our democracy, especially if our electoral process is to remain awash in unlimited spending under the Citizens United ruling. In the not so distant past this was the dream of Republicans and Democrats alike. In his 2002 memoir “Worth Fighting For,” John McCain, a former champion of transparency, wrote “By the time I became a leading advocate of campaign finance reform, I had come to appreciate that the public's suspicions were not always mistaken. Money does buy access in Washington, and access increases influence that often results in benefiting the few at the expense of the many.” We await a return to this sober analysis by the GOP, and by the agencies who implement the laws Congress passes; the foundations of our republic are dependent on it.

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Who's Who in Today's DOMA Hearing

Cross-posted on RIght Wing Watch

Senate Republicans have called Tom Minnery of Focus on the Family, David Nimocks of the Alliance Defense Fund and Ed Whelan of the Ethics and Public Policy Center as witnesses in today’s hearing on the “Defense of Marriage Act.” The groups these witnesses represent have a long record of extreme rhetoric opposing gay rights:

CitizenLink, Focus on the Family’s political arm, is a stalwart opponent of gay rights in every arena:

• Focus on the Family has consistently railed against the repeal of Don’t Ask, Don’t Tell, demanding the discriminatory policy’s reinstatement.

• The group claims anti-bullying programs that protect LGBT and LGBT-perceived youth in schools amount to “homosexual indoctrination” and “promote homosexuality in kids.”

• The group insists that House Republicans investigate the Justice Department over its refusal to defend the unconstitutional Section 3 of DOMA.

The Ethics and Public Policy Center is backed by the far-right Sarah Scaife Foundation, the John M. Olin Foundation, the Lynde and Harry Bradley Foundation, and the Koch- backed Castle Rock Foundation, all well-known right-wing funders.

• George Weigel of EPPC wrote in June that “legally enforced segregation involved the same kind of coercive state power that the proponents of gay marriage now wish to deploy on behalf of their cause.”

• Ed Whelan spearheaded the unsuccessful and widely panned effort to throw out Judge Vaughn Walker’s 2010 decision finding California’s Proposition 8 to be unconstitutional on the grounds that Walker was in a committed same-sex relationship at the time of the decision.

The Alliance Defense Fund, which bills itself as a right-wing counter to the American Civil Liberties Union, is dedicated to pushing a far-right legal agenda:

• The ADF has been active on issues including pushing "marriage protection," exposing the "homosexual agenda" and fighting the supposed "war on Christmas."

• The ADF claims 38 “victories” before the Supreme Court, including: Citizens United v. Federal Election Commission, which allows corporations to spend unlimited money on elections in the name of “free speech” and Boy Scouts of America v. Dale (2000), which allowed the Boy Scouts to fire a Scout Leader because he was gay.

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GOP’s Corporate Backers Intent on Busting Unions, Not Solving Budget Problems

In both Wisconsin and Ohio, Republican governors are attempting to rush through legislation that would devastate workers’ rights that would in reality do little to help close their states’ budget shortfalls. Behind their proposals to strip public employees of their collective bargaining rights is actually a political power play to diminish the voice of organized labor in American politics, a move sponsored by corporate interest groups.

Wisconsin Governor Scott Walker’s desire to eliminate collective bargaining has more to do with political baiting than sound fiscal policy.

For example, Walker specifically exempts the four public employee unions that endorsed his gubernatorial bid in his plan to eliminate collective bargaining. Labor law professor Paul Secunda of Marquette University called it “the worst type of favoritism there could be.” And despite his claim to be a fiscal hawk, the Governor pushed through costly corporate giveaways that jeopardized the state’s balanced budget and rejected a Republican’s compromise bill that would permit only a temporary curb on collective bargaining while preserve unions’ financial concessions.

History shows that states that stripped their public employees’ collective bargaining rights did nothing to solve their fiscal problems. Policy Matters Ohio notes that while Indiana, Kentucky, and Missouri recently eliminated public workers’ bargaining rights, “the budget shortfalls of these states in 2010 ranged from 10.6 percent of general revenue fund (Indiana) to 14.5 percent (Kentucky) to 22.7 percent (Missouri), mirroring the fiscal crisis of states across the nation.”

Rather than solve the budget problems, doing away with a key right of workers only advances the agenda of the corporate interests funding Republican campaigns.

Jonathan Salant of Bloomberg looked into the ties between virulently anti-labor corporations like Koch Industries and Wal-Mart and the radical GOP proposals in Wisconsin and Ohio:

Koch, a closely held energy and chemical company based in Wichita, Kansas, is controlled by the billionaire brothers David and Charles Koch. Along with other corporations, Koch Industries has often opposed organized labor on regulation and free trade, Holman said. Now they see a chance to cripple unions in the name of balancing budgets, he said.

The $1.2 million in Koch support for Republican governors includes $1.1 million given to the Republican Governors Association, which spent more than $3.4 million in support of Walker, according to Common Cause, a Washington-based advocacy group that opposes the governor’s proposal.

In addition, Koch gave $43,000 directly to Walker, his single largest corporate source; $11,000 to the Wisconsin Republican party; $22,000 to Kasich; and $34,000 to the Ohio Republicans.

Koch also supported the 2008 campaign of Indiana’s Daniels, according to the National Institute on Money in State Politics. The Republican Governors Association, which received $25,000 from Koch, was the biggest source of campaign cash for Daniels, institute records show.

In addition, Americans for Prosperity spent $1.2 million in support of Republican candidates for Congress last year, Federal Election Commission records show. Koch Industries’ federal political action committee contributed $1.3 million to candidates for the 2010 elections, 90 percent of it to Republicans, according to the Center for Responsive Politics.

Wal-Mart Stores Inc., the Bentonville, Arkansas, subject of a campaign by the United Food and Commercial Workers Union, also contributed to the campaigns of Walker and Daniels, and donated more than $340,000 to the Republican Governors Association for the 2010 elections, according to the Internal Revenue Service and the National Institute on Money in State Politics.
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Roles of Justices Scalia and Thomas in Citizens United Under Scrutiny

Supreme Court Justices Antonin Scalia and Clarence Thomas raised eyebrows and ethics questions late last year when they attended a conference sponsored by Charles and David Koch, the billionaire brothers who head Koch Industries. A comprehensive expose from The New Yorker reported on the Koch Brother’s immense financial and ideological ties to right-wing and pro-corporate groups, and the Koch-sponsored event that Scalia and Thomas attended was held “to review strategies for combating the multitude of public policies that threaten to destroy America as we know it.” The Koch Brothers have greatly benefited from the Supreme Court’s pro-corporate rulings, including the Citizens United decision which allowed corporations to use funds from their general treasuries to finance, sometimes secretly, political organizations. Tomorrow is the first anniversary of Citizens United, and Common Cause is requesting that the Justice Department look into whether Justices Scalia and Thomas should have recused themselves from the case:

The government reform advocacy group Common Cause today asked the Justice Department to investigate whether Supreme Court Justices Clarence Thomas and Antonin Scalia should have recused themselves from the landmark Citizens United vs. Federal Election Commission decision because they were involved with an array of conservative groups that stood to benefit from it.

In the case, the Supreme Court by a 5-4 margin struck down a provision of the McCain-Feingold campaign finance act that prevented corporations and unions from spending an unlimited amount of money on electioneering, such as campaign ads. Scalia and Thomas sided with the majority in the decision, which was made a year ago this week.

In a letter addressed to Attorney General Eric Holder, Common Cause President Bob Edgar said both justices should have been disqualified from hearing the case because of their ties to Charles and David Koch, wealthy brothers who fund an array of conservative causes.

The justices both attended “retreats” held by Koch Industries, Edgar said, that focused on championing conservative ideas including opposition to campaign finance laws.

Their attendance raises the question of whether the two judges were impartial in their decision, Edgar said. He also questioned Thomas's impartiality because his wife, Ginny, ran a nonprofit group that Edgar said benefited greatly from the Citizens United decision.

“Until these questions are resolved, public debate over the allegations of bias and conflicts of interest will serve to undermine the legitimacy of the Citizens United decision,” Edgar said.
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Republican Freshmen Seek Out Corporate Donors

Members of the far-right GOP freshmen class have not been sworn in yet, but are already becoming entangled in the Washington web of lobbyists and corporate donors. The incoming congressmen, many of them Tea Party candidates, have quickly put together fundraisers to pay off their campaign debts and also to fund their 2012 reelection bids. Unsurprisingly, corporate interests have readily stepped up to the plate to support their fundraising efforts, and freshmen Republicans are more than happy to have the help.

Dan Eggen of the Washington Post reports that with the help of the Republican House leadership, many GOP freshmen are embarking on an all-out blitz for corporate cash to recharge their campaign war chests:

After Francisco "Quico" Canseco beat Rep. Ciro Rodriguez (D-Tex.) as part of the Republican wave on Nov. 2, the tea party favorite declared: "It's going to be a new day in Washington."

Two weeks later, Canseco was in the heart of Washington for a $1,000-a-head fundraiser at the Capitol Hill Club. The event--hosted by Reps. Pete Sessions (R-Tex.) and Jeb Hensarling (R-Tex.)--was aimed at paying off more than $1.1 million in campaign debts racked up by Canseco, much of it from his own pocket.

After winning election with an anti-Washington battle cry, Canseco and other incoming Republican freshmen have rapidly embraced the capital's culture of big-money fundraisers, according to new campaign-finance reports and other records.

Dozens of freshmen lawmakers have held receptions at Capitol Hill bistros and corporate townhouses in recent weeks, taking money from K Street lobbyists and other powerbrokers within days of their victories. Newly elected House members have raised at least $2 million since the election, according to preliminary Federal Election Commission records filed last week, and many more contributions have yet to be tallied.

The aggressive fundraising efforts underscore the financial pressures facing new members of Congress even before they take their seats. The contributions also represent a symbolic challenge for the Republican class of 2010, many of whom gained office by running against the ways of official Washington and monied interests.

"The lobbyists are all saying, 'Welcome to Washington; let me help pay off your debt,'" said Nancy Watzman, who tracks political fundraisers for the Sunlight Foundation, a watchdog group. "It's particularly interesting when so many of this year's freshmen were running against Washington. But as soon as they get elected, they come to Washington and put out their hand."



Rep.-elect Bill Flores (R-Tex.), a retired energy executive who held a debt-retirement reception Nov. 17, received post-election contributions from political-action committees for, among others, Deloitte, ExxonMobil and the National Association of Insurance and Financial Advisors. Flores, who ousted Democratic veteran Chet Edwards, also forgave himself more than $600,000 in personal loans, FEC records show.

The financial advisors group also gave $2,500 each to more than a dozen other incoming legislators including Rep.-elect Dan Benishek (R-Mich.), who held a Nov. 18 fundraiser, records show. Benishek took in last-minute donations from Johnson Controls, Delta Airlines and the K&L Gates lobbying firm, records show.

Benishek is a surgeon and abortion opponent who won the seat being vacated by centrist Democrat Bart Stupak (D-Mich.). He campaigned against "ungodly spending" in Washington and pledged not to seek earmarks, which designate federal funds for local projects.



Meredith McGehee, policy director at the Campaign Legal Center, said debt-retirement events and other post-election fundraisers "are God's gift to special interests," allowing corporate PACs and lobbyists to curry favor with grateful lawmakers. It also allows some donors to pitch in with a candidate that they had previously ignored or opposed, she said.

"If you were on the wrong side or just AWOL during the election, this is your chance to make it up," McGehee said. "It' s a great way to get in good with members of Congress."
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New Details on the Money Behind American Crossroads

A new Center for Responsive Politics report uncovers some more details about the money behind American Crossroads, one of the most powerful right-wing spenders in the 2010 elections.

The Karl-Rove founded group acted as a “Shadow RNC” in this year’s elections, collecting and distributing money from wealthy donors who were shying away from the embattled party committee. But it also had a brand new leg up: the Supreme Court’s decision earlier this year to allow corporations to spend unlimited amounts of money on influencing elections. A full third of American Crossroad’s $28 million in funding came from corporate donors, CRP found. And a big chunk of American Crossroad’s remaining cash—54%--came from just four wealthy donors.

And that’s just the branch of American Crossroads whose funding we know about. The group’s sister organization, Crossroads GPS, spent $17 million on elections, and according to CRP,” saw its preferred candidates win in 71 percent of the races in which it invested money.” We can’t know for sure about the sources of GPS’s funding, since it doesn’t have to report its activities to the Federal Election Commission, but we do know that it received significant funding from Wall Street bankers. Once source told Politico in October that “most of the GOP corporate money is believed to be moving through [Crossroads GPS], so that it isn’t disclosed publicly.”

Rove himself has said that the Citizens United decision made the success of American Crossroads and American Crossroads GPS possible. In turn, his groups helped to define what political spending looks like in the post-Citizens United era, where corporations and a few wealthy individuals have enormous power over elections—but rarely have to own up to it.


 UPDATE: Mother Jones has more on the Big Four donors to Crossroads.

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Secret Money in 2010 Election Doubled All Outside Group Spending in Last Midterm

The rapid growth and increased prominence of outside groups attempting to influence voters in the 2010 midterm election was apparent to all Americans who saw the deluge of campaign spending and TV ads this year. But the matter of who actually financed such groups is far less clear, as the Supreme Court’s Citizens United decision made it much easier for groups to raise secret money from individuals and corporations to advance their political agendas. A new report by Public Citizen, Disclosure Eclipse, details how 2010 became a watershed moment for groups who do not publicly disclose the sources of their funding:

Of 308 outside groups, excluding party committees, that reported spending money on this year’s elections, just 116 (53.9 percent) provided any information about the sources of their funding, according to Public Citizen’s analysis of Federal Election Commission (FEC) data.

Of the 10 top spending groups, only three provided information about their founders. These top 10 groups – which collectively spent $138.5 million, equal to 52 percent of the $266.4 million spent by all outside groups in the 2010 to influence this years election – disclosed the sources of only 27.1 percent, of the money they spent.

Groups not disclosing any information about their funders collectively spent $135.6 million to influence this year’s elections. That was almost exactly double the $68.9 million grand total spent by outside groups in 2006, the most recent midterm election cycle.

Although the Supreme Court’s opinion in Citizens United lauded the virtues of disclosure, the effect that decision and the court’s earlier retrenchment of campaign finance regulations in 2007 has been less disclosure.



Such disclosure, [Justice] Kennedy wrote, would enable citizens to “see whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

But, even for independent expenditures, no provision requires the type of disclosure that Kennedy discussed. The plain rules of [Bipartisan Campaign Reform Act] require such disclosures, but the FEC has gutted them.

In 2010, as mentioned above, only 70 percent of 30 top spending groups provided any information about their funding sources. These groups disclosed only 55.4 percent of their independent expenditures.

People For the American Way’s Citizens Blindsided: Secret Corporate Money in the 2010 Elections and America’s New Shadow Democracy report shows how undisclosed money is flowing into groups with a specifically pro-corporate political agenda. Members of Congress who supported measures to reform Wall Street and the health insurance system found themselves in the crosshairs of shadowy organizations which did not reveal their donors to the public. As this Public Citizen analysis demonstrates, Supreme Court rulings and the resulting FEC actions dismantled campaign finance rules to the point where secret money took off in the 2010 election, mostly to the benefit of pro-corporate politicians and causes.

 

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Americans Still Oppose Court’s Citizens United Decision

Nearly ten months since the Supreme Court drastically expanded the ability of corporations to influence the political process, the public is still greatly troubled by the Court’s ruling in Citizens United. The majority Americans do not buy the absurd arguments of Congressional Republicans that Citizens United was as significant a step forward as the Court’s landmark decision in Brown v. Board of Education, as most people believe that corporations should not be allowed to spend unlimited sums from their general treasuries to fund political efforts. A Hart Research poll conducted on behalf of People For the American Way found that 77% of Americans want Citizens United to be overturned, and that corporations already have too much political power.

A recent “Constitutional Attitudes Survey” by Harvard and Columbia University professors found that while self-described liberals and conservatives all found Court decisions they agree with, Citizens United stands out as the most unpopular among all respondents:

One notable decision that stuck in respondents' respective craw, however, was Citizens United v. Federal Election Commission, the January 2010 opinion that struck down a federal law prohibiting corporations from airing advertisements endorsing a political candidate.

Fifty-eight percent of survey respondents disagreed with the statement, "Corporations ought to be able to spend their profits on TV advertisements urging voters to vote for or against candidates." Only 40 percent agreed with the statement.

Additionally, an overwhelming 85 percent of respondents answered yes to the question, "Should corporations be required to get approval from their shareholders for expenditures related to political campaigns?" Indeed, Persily told the Spokane, Washington-based Spokesman Review that the Citizens United opinion is "very out of step with public opinion."

The survey's results are consistent with those of a Washington Post-ABC News poll taken in February, shortly after the case was decided. A full 80 percent of respondents in that poll disagreed with the court's holding, and 65 percent labeled themselves "strongly" opposed. Surprisingly, that poll found that views of the decision did not split along party lines -- fully 76 percent of Republicans and 81 percent of independents, along with 85 percent of Democrats, disagreed with the decision.
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Chamber’s Foreign Funding Demonstrates the Need to Revisit Citizens United

Coming on the heels of a report by ThinkProgress on how the US Chamber of Commerce uses membership dues from foreign corporations to pay for political advertisements in American elections, the Supreme Court’s ruling in Citizens United is facing new scrutiny for opening up the floodgates of corporate spending. People For the American Way has spoken out against the Chamber’s practices of collecting “hundreds of thousands of dollars from foreign owned businesses, including companies owned by foreign governments,” and the editorial board of the New York Times is also sounding the alarm. The Times editors write that the election system is broken as a result of Citizens United and actions by Republicans in Congress and the FEC to weaken the remaining regulations of campaign finances:

Because the United States Chamber is organized as a 501(c)(6) business league under the federal tax code, it does not have to disclose its donors, so the full extent of foreign influence on its political agenda is unknown. But Tuesday’s report sheds light on how it raises money abroad. Its affiliate in Abu Dhabi, for example, the American Chamber of Commerce, says it has more than 450 corporate and individual members in the United Arab Emirates who pay as much as $8,500 a year to join.

Because of a series of court decisions that culminated in the Supreme Court’s Citizens United ruling earlier this year, these and similar 501(c) nonprofits have become huge players in the year’s election, using unlimited money from donors who have no fear of disclosure. (Not surprisingly, the chamber has been a leading opponent of legislation to require disclosure.) One such group, American Crossroads, organized by Karl Rove, announced on Tuesday a $4.2 million ad buy to support Republican candidates, bringing the group’s total spending to about $18 million so far.

The possible commingling of secret foreign money into these groups raises fresh questions about whether they are violating both the letter and spirit of the campaign finance laws. The Federal Election Commission, which has been rendered toothless by its Republican members, should be investigating possible outright violations of the Federal Election Campaign Act by foreign companies and the chamber.

Now, Minnesota Senator Al Franken is calling on the FEC to look into the Chamber’s finances, the Star Tribune reports:

Franken’s letter says that the Chamber’s mixing of funds under current FEC rules “is not per se illegal.” But he wrote that the company had to demonstrate that its foreign funds were not used for political purposes, and pushed the FEC to launch an investigation.

In addition, Franken’s letter asked the FEC to change its regulations allowing foreign companies to spend on elections — which is legal so long as the company is incorporated in the U.S. and creates a special election committee staffed by Americans.

 

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Pro-GOP Outside Groups Eclipse Parties in Spending

Traditionally, political parties and their campaign arms spend the most amount of money promoting their congressional and senatorial candidates across the country. Following the Supreme Court’s decision in Citizens United, however, a flurry of outside groups has materialized with gigantic war chests. As profiled in After Citizens United: A Look into the Pro-Corporate Players in American Politics, the Court’s decision allowed for new groups to surface and older organizations to increase their fundraising capacities. In the midterm elections, Kristin Jensen and Jonathan D. Salant of Bloomberg report that political committees supporting Republicans and attacking Democratic officials have so-far outspent both the Republican and Democratic parties’ campaign arms in 2010:

Republican-leaning groups outspent the two political parties combined during September’s first four weeks in a bid to sway the U.S. congressional elections, Federal Election Commission reports show.

The groups -- including Crossroads GPS, advised by Republican strategist Karl Rove, and the U.S. Chamber of Commerce -- spent more than $33 million, mainly on advertising. That compares with just under $20 million spent by the Republican and Democratic committees charged with electing their party’s candidates.

Outside organizations are focusing most of their fire on Senate races, particularly in California, Colorado, Florida, Missouri, Nevada and Pennsylvania, their reports to the FEC show. Many of the groups are registered as nonprofits that don’t have to disclose their donors, drawing protest from Democrats including President Barack Obama and Montana Senator Max Baucus.

“Republican operatives in the shadows are clearly winning the hidden money game,” said Linda Fowler, a government professor at Dartmouth College in Hanover, New Hampshire.

Obama has used two of his recent weekly addresses to blast Republicans for blocking legislation that would make groups engaged in political activity report their contributions. Baucus, the Senate Finance Committee chairman, today asked Internal Revenue Service Commissioner Doug Shulman to investigate the organizations.

While political parties and their campaign arms must disclose their donors and have caps on contribution amounts, many outside groups accept unlimited amounts of money from individuals and corporations and do not have to disclose the sources of their funding. Thanks to such organizational advantages, such outside groups are now overshadowing political parties as regulations concerning transparency and spending fall by the wayside.

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So Much for "Prompt Disclosure"

When the Supreme Court decided earlier this year to allow corporations to spend unlimited amounts of money to influence elections, the justices in the majority (save Justice Clarence Thomas) took care to note that “prompt disclosure” of political spending would allow citizens to hold candidates, and their funders, accountable. It’s a nice idea…but things haven’t exactly worked out that way.

Instead, Public Citizen reported last week, in the first election after Citizens United, groups funneling money to political activities have increasingly been hiding where their money comes from.

Only 32 percent of the organizations broadcasting electioneering communications in the 2010 primary season revealed in their filings with the Federal Election Commission (FEC) the identities of donors funding their advertisements, according to Public Citizen’s analysis of FEC filings. In contrast, nearly 50 percent revealed their donors in the 2008 election cycle, and close to 100 percent did so in the 2004 and 2006 cycles. Electioneering communications are campaign ads run shortly before elections that focus on candidates but don’t expressly urge a vote for or against them.

Only 10 percent of Republican groups disclosed their funders, in contrast to 50 percent of Democratic groups.

This shouldn’t come as a surprise. As Target learned the hard way this summer, shareholders, consumers, and voters aren’t particularly keen on large corporations bankrolling political campaigns. Funneling money through secretive groups allows corporate political spenders to have the best of both worlds: they can fund the campaigns of candidates favorable to them, and never have to be held accountable.

An attempt this summer to patch up the loophole that allows corporations to keep their election spending secret ran up against stiff opposition from corporate lobbyists and a unified filibuster from the GOP. President Obama summed up the result in his weekly radio address Saturday:

What is clear is that Congress has a responsibility to act. But the truth is, any law will come too late to prevent the damage that has already been done this election season. That is why, any time you see an attack ad by one of these shadowy groups, you should ask yourself, who is paying for this ad? Is it the health insurance lobby? The oil industry? The credit card companies?

But more than that, you can make sure that the tens of millions of dollars spent on misleading ads do not drown out your voice. Because no matter how many ads they run – no matter how many elections they try to buy – the power to determine the fate of this country doesn’t lie in their hands. It lies in yours. It’s up to all of us to defend that most basic American principle of a government of, by, and for the people. What’s at stake is not just an election. It’s our democracy itself.

This fall, the Senate will have another chance to bring the DISCLOSE Act to a vote. As the New York Times pointed out yesterday, the vote should be a no-brainer for moderate senators like Susan Collins and Olympia Snowe of Maine:

The Citizens United decision, paradoxically, supported greater disclosure of donors, but Senate Republicans have filibustered a bill that would eliminate the secrecy shield. Just one vote is preventing passage. That act is coming back for another Senate vote. The two Republican senators from Maine, Susan Collins and Olympia Snowe, might want to read a recent poll by the Maine Citizens for Clean Elections, which showed that 80 percent of the state’s voters support public disclosure.

In a poll we commissioned in June, 85% of Americans said that corporations already have too much influence over the political process. Voters want information. Will Congress provide it?
 

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New Groups Taking Advantage of Concealed Election Spending

Can we have the DISCLOSE Act now? USA Today reports that more than a dozen groups have been organized since June to take advantage of the lax election spending rules left by the Citizens United decision earlier this year…and most of them aren’t going to tell us who’s funding them:

In many cases, the public will not know who has funded the ads until long after they have aired.

"This is the new order of political finance," says Sheila Krumholz, executive director of the Center for Responsive Politics, which tracks money in politics. Outside groups can "sling mud with hidden money."

Since June 1, at least 15 organizations have launched these operations to influence congressional races, according to filings with the Federal Election Commission.

In Mother Jones, Peter Stone explains one reason why corporate interests are jumping through hoops to influence elections without being noticed:

You might wonder: Given that Citizens United allowed companies, say General Motors or Aetna, to get involved in elections directly, why would they need to go through groups like BIPAC or the US Chamber of Commerce? The problem, says Larry Noble, a former general counsel at the FEC, is that the decision is so unpopular many companies may not want to be seen as taking advantage of it. (In the wake of President Obama's attack on the Citizens United ruling in the State of the Union address—he noted that it would allow special interests and "foreign corporations to spend without limits in our elections"—80 percent of Americans told pollsters they disagreed with the ruling.)

Then, there’s also the powerful example of Target, which taught corporations that it’s ok to give money to political causes—as long as you don’t get caught.
 

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What Citizens United has to do with Rod Blagojevich

Last night, a federal jury in Chicago convicted Illinois governor Rod Blagojevich on just one of 24 counts of political corruption. On the rest of the counts, the jury was hopelessly deadlocked.

Scott Turow, the bestselling novelist who started his career as a US Attorney prosecuting political corruption cases in Chicago, writes in the New York Times that whatever the fuzziness of fact in the Blagojevich case, what is even fuzzier is the way our legal system deals with political corruption. The influence of big money is everywhere in our political process—and the Supreme Court’s decision in Citizens United opened the door for less showy, but equally problematic, versions of the corruption that Blagojevich is accused of.

Indeed, in Citizens United v. Federal Election Commission, the court decided that such organizations could spend as much as they wished at any time, assuming there was no direct coordination with the candidate. In doing so, the court overturned its own precedents and refused to distinguish the free speech rights of corporations and unions in any way from those of actual people.

The problem with this logic is that corporations have a legal duty not to spend money unless it is likely to improve profits. Unions, too, are expected to make only contributions that will benefit members. As a result, no idealistic patina of concern about good government or values-driven issues can burnish these payments.

The future of other campaign finance restrictions looks bleak. Thirty-four years ago, when the Supreme Court first declared in Buckley v. Valeo that the First Amendment protected election spending, it nonetheless approved contribution limits “to prevent ... the appearance of corruption.” In Citizens United, the Roberts Court gave short shrift to any concern about appearances. Limits on direct contributions to candidates appear likely to be the next campaign safeguard to fall.

In any case, the bevy of ways in which donors can get around current spending laws, combined with the Supreme Court’s elastic approach to the First Amendment, have left our campaign finance system as little more than a form of legalized influence-buying. Only those as naive as Wanda Brandstetter or as crass and ham-handed as Rod Blagojevich find themselves subject to prosecution, while others wise enough to say less out loud find snug protection in the First Amendment, no matter how bald their desire to influence government actions.

We see daily examples of this sort of dynamic happening in elections—take the Florida governor’s race--where any causal relationships between campaign cash and policy decisions can never be fully sorted out. It’s a dangerous thing for democracy…and one, as Turow points out, we aren’t going to fix without a Constitutional amendment.
 

PFAW

Corporate Spending in Judicial Elections Skyrocketing

For those still in doubt about the potential for corporate influence in national elections in the post-Citizens United world, it might be helpful to look at the growing sway of corporate money in state-level judicial elections.

Eliza Newlin Carney at the National Journal found some staggering statistics:

Predictions that the Citizens United v. Federal Election Commission ruling will unleash a torrent of corporate money are wildly overblown, free speech advocates insist. As evidence, they argue that corporate money has yet to flood elections in the 26 states that already impose no limit on corporate spending.

But a closer look at state-level elections suggests that independent political expenditures by corporations, unions and other special interests are substantial. This is particularly true in judicial elections, which have gotten dramatically costlier, nastier and more controversial over the past decade. The Citizens United ruling may impact judicial races even more drastically than federal elections, some experts argue.

Campaign spending in state Supreme Court elections for the 2008 cycle topped $45 million, continuing a trend that started in the early 1990s, according to Justice at Stake, a nonprofit promoting judicial impartiality. Judicial campaign fundraising totaled $206.4 million between 2000 and 2009, according to a forthcoming Justice at Stake report, more than double the $83.3 million raised between 1990 and 1999.

Corporate money dominated those expenditures, according to Justice at Stake spokesman Charles Hall, who said some 30 percent of the $206.4 million had "clear links" to the corporate sector. Other big judicial campaign money sources were lawyers and lobbyists, who accounted for about 28 percent of the $206 million-plus total.

The Supreme Court itself highlighted the dangers of this trend in last year’s decision banning a West Virginia Supreme Court justice from participating in a case involving a man who had spent $3 million helping him get elected. The funder in question was Massey Energy Company owner Don Blakenship—who has recently earned criticism as an example of what can happen when corporations have more regulatory influence than the citizens they employ.

PFAW

Senators Dodd and Udall call for a constitutional amendment

Yesterday, Senators Christopher Dodd and Tom Udall introduced a constitutional amendment to correct the Supreme Court’s recent ruling in Citizens United v. Federal Election Commission. According to Senator Dodd:

Ultimately, we must cut through the underbrush and go directly to the heart of the problem, and that is why I am proposing this constitutional amendment: because constitutional questions need constitutional answers.

People for the American Way applauds Senators Dodd and Udall, Senator John Kerry, and House members like Donna Edwards, John Conyers, and Leonard Boswell, for pushing constitutional amendments. We believe that this is the only complete remedy for the grave threat posed to our democracy by the Roberts Court and its equation of corporations with individuals – a perversion of the First Amendment.

While legislation is a crucial part of the effort to repair this decision, it should be only a part of our response. Constitutional amendments are warranted in only the most extreme circumstances. This is one of them.

You can join People For the American Way’s call for a constitutional amendment by signing our petition at http://www.pfaw.org/Amend.

PFAW

Ronald Reagan's Court

By any measure, the Supreme Court has moved far to the right in the last few years.  In the Los Angeles Times today, David Savage writes about how the decision in Citizens United shows how far the court has moved on corporate issues.

In the 1970s, Justices William H. Rehnquist and Byron R. White said business corporations were "creatures of the law," capable of amassing wealth but due none of the rights of voters.

By contrast, the court's current majority described a corporation as an "association of citizens" that deserves the same free-speech rights as an individual. Because speech and debate are good for democracy, they said, the public should welcome more corporate-funded campaign ads.

He also makes a cogent observation about the origin of this pro-corporate tilt.

All five justices who made up the majority in last month's case, Citizens United vs. Federal Election Commission, were either appointed by Reagan or worked as young lawyers in the Reagan administration.

A reminder that the Supreme Court is often one of a President's most enduring legacies.

PFAW

It’s More than Balls and Strikes

The Supreme Court is about to hear argument in a case, Citizens United v. Federal Election Commission, that should put an end to the myth advanced by Chief Justice Roberts at his confirmation hearing that he, as a Justice, is simply serving as an umpire, calling balls and strikes about what the law provides without any intention of influencing the direction of the law.  

After hearing oral argument last term, the Court postponed a decision in Citizens United, which involves the FEC’s attempt to treat an anti-Hillary Clinton movie as an impermissible “electioneering communication,” and ordered the parties to submit briefs that address the question of whether regulating corporate expenditures in candidate elections is constitutional. So instead of deciding the case in front of them, those who had been on the losing side in the past have reached out to redecide an issue that had been settled. 

Regardless of where you are on the merits of regulating express candidate advocacy by corporations – the issues of campaign finance regulation and the question currently being addressed by the Court are extraordinarily complex and weighty – it seems likely that those formerly in the minority, including Justice Roberts, seeing a change in the make-up of the Court (with Justice Alito replacing Justice O'Connor, who originally helped decide the quesiton), have seized a potential opportunity to re-make the law.  

So let’s be clear. Chief Justice Roberts isn't just calling balls and strikes: he's actually determining which pitches get thrown. 

Judges bring their own legal ideology to the table when they decide cases. It makes a difference whether the next nominee to the Supreme Court understands that the law and the Constitution mandate protections for average Americans against the interests of the more powerful. It makes a difference whether the next nominee to the Supreme Court understands that the law and the Constitution protect important privacy rights. It makes a difference that the next nominee appreciates that the law and the Constitution affect the realities of Americans’ everyday lives. It’s not just balls and strikes. Judicial philosophy matters.

PFAW