The black box of corporate money

The Supreme Court did tremendous damage in the Citizens United case by awarding corporations the same First Amendment rights as people.  But the one silver lining in an otherwise abhorrent decision was its support for disclosure.
 
After Citizens United, we can expect more corporate money in politics, but the question is how transparent will this new spending be? Will this new corporate money be done through impenetrable black boxes?
 
Senator Schumer and Congressman Van Hollen have just introduced an omnibus bill to address the multiple problems Citizens United has unleashed called Democracy Is Strengthened by Casting Light On Spending in Elections Act (the “Disclose Act”). This act will address political spending by foreign owned corporations, the use of tax dollars by TARP recipients in politics and conflicts of interest presented by political spending by government contractors.
 
The Supreme Court in Citizens United, like the McConnell case from seven years before, held that full disclosure of who funds political ads is perfectly constitutional. Indeed in both cases, disclosure and disclaimers for political ads were upheld eight to one, with Justice Thomas as the lone dissenter.  But this endorsement by the high court of disclosure hasn’t stopped groups from hiding behind all sorts of artifices to conceal the true source of money in politics.
 
Now that corporations and unions can spend, the laws need to be adjusted to this new reality. A vital part of Schumer/Van Hollen’s reform package is its improvements to disclosure for federal campaign spending by corporations. The bill requires a new type of disclaimer on broadcast ads. Before, the law required the sponsor of the ad. The bill supplements this with the names of the top five donors to the ad. The bill also requires pictures of the CEO of the corporation who sponsored the ad to appear. And the bill requires more detailed reporting of who is contributing to entities sponsoring political ads.
 
These improvements to disclosure are needed because of the many disclosure loopholes in current law.
 
Sometimes, the subterfuge comes in the form of the benign-sounding political action committee. Some of my favorites include the Abraham Lincoln Leadership PAC, Americans for the Republic, the Democracy Believers PAC, and the Freedom and Democracy Fund. These all turn out to be largely funded by corporate PACs.
 
Another form of subterfuge is for a corporation to spend on politics through an intermediary who keeps their membership confidential. The classic example of this tactic is the U.S. Chamber of Commerce, a trade association organized under Section 501(c)(6) of the tax code. The public can’t tell who is behind a Chamber specific political ad, because all that the ad will say is that it was paid for by a Chamber of Commerce not the company footing the bill. This is troubling from the point of view of both the voter and the shareholders of the companies who are members of the trade association.  Neither the voter nor the shareholder knows where the money is really coming from.
 
Disclosure serves three masters: first the integrity of the political system. The public needs to know who is trying to curry favor through the purchase of expensive political ads to make sure that corporate interests are not trying to corrupt candidates through elaborate spending on their behalf.  But the second goal is equally important: informing the electorate of the source of the political ad so the voter can understand the import of the ad.  An ad from a coal company posing as an environmental group urging a vote for a West Virginia senator might carry a different sway from a bona fide environmental group running a similar ad. One seems like propaganda the other like an honest endorsement. Finally, disclosure enables campaign finance regulators to enforce other substantive campaign finance laws.
 
The Disclose Act is a step in the right direction. If corporate money is going to be a part of election process then it should not be from a black box.

Ciara Torres-Spelliscy is an attorney at the Brennan Center for Justice at NYU School of Law.

Learn more about the Brennan Center.


More in Op-Ed

A friendly warning from Canada to the new Republican Congress

Read more »