Democrats to tweak campaign bill after complaints over PACs

Democrats to tweak campaign bill after complaints over PACs

House Democrats are planning changes to a campaign finance bill in response to attacks from business groups that argue the measure will sound the death knell for political action committees (PACs) run by foreign-owned companies like Anheuser-Busch.

In a flurry of letters sent to members of the House Administration Committee, business groups are targeting a provision in the measure they argue would prevent thousands of Americans citizens from making voluntary contributions to their employers’ PACs.


The groups don’t specify the corporate PACs that would be affected, but privately say PACs run by the domestic subsidiaries of Anheuser-Busch, Shell Oil, Miller Brewing Co., John Hancock Financial Services and Food Lion, all foreign-owned corporations with large U.S. subsidiaries, would be affected, according to several sources on K Street and Capitol Hill.

The provision is just one piece of a larger measure of the Disclose Act, which aims to blunt the impact of the Supreme Court’s landmark Citizens United case, issued earlier this year. The high court’s decision lifted limits on corporate and union funding of political advertisements, and critics, including President Barack ObamaBarack Hussein ObamaBiden hits 59 percent approval rating in Pew poll Cuba readies for life without Castro Biden can make history on nuclear arms reductions MORE, warned of an avalanche of corporate-funded campaign ads in its wake.

House Democrats will make up the legislation on Thursday and hope to pass the bill on the House floor by Memorial Day and the entire Congress by July 4 so the legislation can affect this year’s election.

The language in question is aimed at barring foreign nationals and corporations controlled by them, such as Hugo Chavez’s Citgo, from funding political advertising.

But critics warn that it would also force PACs of companies to shut down because it expands the definition of a foreign national to include “any company of which 20 percent or more of the voting stock is owned by a foreign national, a majority of the board is made up of foreign nationals, or which is under the director or control of one or more foreign nationals either generally or with respect to its political activities in the U.S.”

Rep. Chris Van Hollen (D-Md.), the chief House author of the Disclose Act, is trying to assure the business groups that the bill was not intended to shut down PACs of any kind. Van Hollen and House Administration Committee staff are working on a manager’s amendment that would rewrite the language to ensure it does not affect PAC donations to members, among other technical fixes, they say.

“Congressman Van Hollen is committed to ensuring that Americans who choose to participate in our democracy through PACs are able to do so, and has no intention of restricting PACs of domestic subsidiaries of foreign parent companies, comprised of American citizens, from being able to continue to function and operate,” said Van Hollen spokeswoman Bridgett Frey. “This issue will be clarified through a technical correction to the bill.”

The bill is titled the Disclose Act, which reflects the authors’ emphasis on transparency. The acronym stands for Democracy is Strengthened by Casting Light on Spending in Elections.


The measure would force strict disclosure requirements for ads, including a mandate that CEOs, top officials and donors appear on camera to “approve” messages. It also wouldn’t let major political donors hide behind other groups in their advertisements.

The measure has attracted 100 co-sponsors, many of whom have accepted donations from the PACs in question. Anheuser-Bush’s PAC, for instance, has already doled out $496,000 to candidates so far this cycle, cutting checks to a dozen co-sponsors of the Disclose Act, including Reps. Walter Jones (R-N.C.), Mary Jo Kilroy (D-Ohio), Gabrielle Giffords (D-Ariz.), Ike Skelton (D-Mo.), Tim BishopTimothy (Tim) Howard BishopOn The Trail: The political losers of 2020 Dem candidate 'struck by the parallels' between Trump's rise and Hitler's Dems separated by 29 votes in NY House primary MORE (D-N.Y.), Earl Pomeroy (D-N.D.), John Boccieri (D-Ohio), Patrick Murphy (D-Pa.) and Steve Kagen (D-Wis.).

Business groups, led by the Organization for International Investment (OFII), argue the expanded definition of foreign nationals would trump previous definitions that allowed domestic subsidiaries of foreign companies to operate PACs.

“We have already had constructive conversations with the bill’s sponsors regarding our strong concerns over the impact on U.S. subsidiaries’ PACs,” said Nancy McLernon, OFII’s president. “The problem for us begins and ends with how the bill redefines U.S. subsidiaries, which employ 5.5 million Americans, as foreign entities that have goals other than furthering their commercial business in the U.S.”

In recent weeks, OFII, the American Council of Life Insurers, as well as the National Association of Business PACs, or NABPAC, all have lobbied against the foreign-nationals provision as originally written.

“[The Disclose Act] bans PACs at companies formed in the U.S., which employ U.S. citizens, thereby creating a two-class campaign-finance structure for American employees working for American companies,” Geoff Zeibart, the executive director of the National Association of Business PACs, or NABPAC, wrote to committee members.

Zeibart said the foreign-national provision is not the only provision NABPAC opposes, but it is the most offensive part of the bill.

“The most grave and troubling provision is that which takes the rights to participate in an employer-sponsored PAC,” he said. “This goes far beyond any expectation we had for this legislation, and from our perspective is a provision far beyond the scope of the legislative intent.”