Groups that didn’t provide any information about their donors accounted for about half the money spent by outside groups in the last election — more than $135 million. Thus far in the 2012 presidential contest, about 40 percent of TV advertising — more than $24 million worth — has been funded by nonprofit groups that will never reveal their contributors. Six of the ten Super PACs that raised the most money last year took money from groups that won’t disclose any information about their donors.
Some of the blame for allowing nonprofits to spend millions on electioneering while shielding donors’ names falls on the IRS, which hasn’t said clearly how much nonprofits dedicated to “social welfare” can spend on politics without losing their tax exemption. But the FEC has exacerbated the problem.
Under federal law, organizations — including nonprofits — that run political advertisements must disclose the name of every donor who contributed more than a certain amount to the organization. The duty to disclose in the federal statute is clear. But the FEC has issued rules that eviscerate the requirement.
The FEC’s rules say a group only has to report a donor if he or she specifically earmarks the contribution for the advertisement. Almost nobody does so — contributors just write checks with a wink and a nod, knowing the money will be used for political advertising, and knowing that they’ll remain anonymous.
Because of the FEC’s swiss-cheese regulations, secretive nonprofits are poised to dominate the 2012 election. Thankfully, there are champions of transparency in Washington willing to fight against the secret money trying to hijack democracy.
Rep. Chris Van Hollen (D-Md.) deserves special praise. He filed a petition with the FEC asking it to overturn one of its faulty regulations, and he has brought a lawsuit to force the agency to implement, and not undermine, federal disclosure law.
Last week, Van Hollen — along with Rep. Robert Brady and other representatives—introduced the DISCLOSE 2012 Act, which represents a critical step forward. The bill builds on the original DISCLOSE Act introduced in response to the Citizens United ruling in 2010. Unlike its predecessor, which would have restricted election spending by various groups, the new bill focuses exclusively on disclosure — and presents a clear question for members of Congress: Do you support transparency or secret money in elections?
The DISCLOSE 2012 Act would require reporting of campaign expenditures over $10,000 by Super PACs, unions, corporations, and other groups. It would require these groups to approve their messages, and to disclose top donors in their ads. The bill would make unions and corporations disclose their political spending to their members or shareholders. Finally, it would mandate that lobbyists report their political expenditures, to ensure that the public can monitor attempts to purchase influence over elected officials.
There is much that Congress can do to fix the current campaign finance fiasco, including reforming — or replacing — the FEC. In the meantime, adopting the DISCLOSE 2012 Act would bring immediate — and needed — change.
The Act will provide voters with the information they need to make informed decisions. It will let shareholders and members hold corporations and unions accountable for their political spending. And it will grant the public the tools it requires to detect corruption engendered by currently anonymous campaign spending. Congress should pass it without delay.
Skaggs serves as senior counsel for the democracy program at the Brennan Center for Justice at NYU School of Law.