Today, the Federal Election Commission will hold a public forum to explain its campaign spending reports, and to solicit input on a new “disclosure portal” it hopes will “provide one-stop shopping for campaign finance data.” Shedding light on how government works is commendable. But an FEC forum on disclosure sounds a bit like a seminar on responsible home finance run by the banks that just agreed to pay $26 billion for their mortgage lending abuses.
Federal law requires the FEC to collect and publish data on spending by candidates and groups seeking to influence federal elections. The data is useful in the horse race handicapping that constitutes contemporary political analysis: FEC numbers show what candidates raised the most, and who has the most cash on hand.
But the FEC has carved loopholes in federal law that allow the real sources of much of today’s political spending to remain hidden. The agency charged with shining disinfecting sunlight on political spending is allowing millions of dollars of dark money to swamp our elections.
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.
Recent reports from Karl Rove’s Crossroads groups prove that donors willing to spend millions of dollars in elections often prefer to do so secretly. To support Republican candidates, Rove set up two groups in 2010, American Crossroads and Crossroads GPS — one a Super PAC that names its donors, the other a nonprofit that doesn’t. Nearly two-thirds of the more than $50 million the groups raised last year went to the nonprofit that conceals its donors from the public.
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.
Representative Chris Van Hollen of Maryland 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.