Skip Navigation
Archive

DISCLOSE Act Crucial to Transparency of Federal Election Spending

The DISCLOSE Act is crucial to ensuring voters know who is trying to influence their votes on Election Day — and the votes of their representatives in Congress after the election is over.

  • David Earley
July 23, 2014

Cross­pos­ted on The Hill.

The Senate Commit­tee on Rules and Admin­is­tra­tion today will hold a hear­ing on the DISCLOSE Act of 2014, a bill to improve disclos­ure of polit­ical spend­ing in federal elec­tions. The meas­ure, cosponsored by 50 senat­ors, is crucial to ensur­ing voters know who is trying to influ­ence their votes on Elec­tion Day — and the votes of their repres­ent­at­ives in Congress after the elec­tion is over.

Since the Supreme Court’s 2010 Citizens United decision, outside spend­ing in federal elec­tions has skyrock­eted. Outside groups spent over $1 billion in the 2012 federal elec­tions — the most ever. Shock­ingly, 2014 could have a compar­able figure, despite the lack of a pres­id­en­tial elec­tion. 

This explo­sion of outside spend­ing includes a dramatic rise in undis­closed elec­tion spend­ing. This anonym­ous spend­ing occurs in three ways, all of which the DISCLOSE Act addresses.

First, due to loop­holes in federal elec­tion and tax laws, some polit­ic­ally active groups, primar­ily social welfare nonprofits, are not required to disclose their donors. The amount spent by these groups quad­rupled from 2008 to 2012 — rising from less than $70 million to over $310 million. So far in 2014, over $35 million has been spent by nondis­clos­ing groups, which is almost triple the amount of undis­closed spend­ing at this time in the 2012 elec­tion cycle. 

The DISCLOSE Act would require all groups that engage in more than $10,000 in polit­ical spend­ing, includ­ing for-profit corpor­a­tions, labor unions, and social welfare nonprofits, to disclose their donors. 

Second, some spend­ers, like super PACs, must disclose their donors, but that disclos­ure is effect­ively mean­ing­less because the entit­ies disclosed are some­times shell organ­iz­a­tions. For example, suppose donor A contrib­utes to shell corpor­a­tion B, which then contrib­utes to super PAC C, which then engages in polit­ical spend­ing.  Even though super PAC C must disclose all its donors, only shell corpor­a­tion B will be listed on its reports; in this way, donor A will remain anonym­ous.

Under the DISCLOSE Act, if an organ­iz­a­tion trans­fers over $50,000 to another organ­iz­a­tion while know­ing the money will be used for polit­ical spend­ing, the donat­ing organ­iz­a­tion must disclose its under­ly­ing donors to the recip­i­ent organ­iz­a­tion, which in turn must list those donors on its disclos­ure reports. 

Third, some polit­ical spend­ing isn’t recor­ded at all.  If a polit­ical ad is run on tele­vi­sion or radio, but outside the “elec­tion­eer­ing commu­nic­a­tions window” (30 days before a primary elec­tion or 60 days before a general elec­tion) and does­n’t expressly call for the elec­tion or defeat of a candid­ate (by using words like “vote for Senator Smith”), no disclos­ure is required at all. Consequently, not only are the organ­iz­a­tion’s under­ly­ing donors not disclosed, but the amount spent goes undis­closed as well. 

The DISCLOSE Act would expand the elec­tion­eer­ing commu­nic­a­tions window.  For the pres­id­en­tial elec­tion, most tele­vi­sion or radio ads that mention a candid­ate run up to 120 days before any elec­tion would have to be disclosed. For congres­sional races, the same would be true for any tele­vi­sion or radio ad that mentions a candid­ate on or after Janu­ary 1 of an elec­tion year. The under­ly­ing donors that paid for these advert­ise­ments would also have to be disclosed.

The Supreme Court has endorsed strong disclos­ure provi­sions similar to the DISCLOSE Act. In the lesser-known second half of Citizens United, an 8–1 major­ity of the Court explained that prompt disclos­ure is needed “to hold corpor­a­tions and elec­ted offi­cials account­able for their posi­tions and support­ers.”  Moreover, just last month, the Supreme Court reaf­firmed the import­ance of disclos­ure in its McCutcheon decision, explain­ing that disclos­ure helps prevent “abuse of the campaign finance system.”

Though the DISCLOSE Act is the best way of address­ing dark money in our elec­tions, other solu­tions exist.  IRS Commis­sioner John Koskinen recently announced that the IRS intends to clamp down on polit­ic­ally active social welfare nonprofit groups.  Under the proposal, if a social welfare nonprofit spends a substan­tial amount on polit­ical activ­ity, the organ­iz­a­tion would lose its special tax status and would have to disclose its donors. 

Addi­tion­ally, the SEC has been asked to create a rule requir­ing publicly-traded compan­ies to disclose their polit­ical spend­ing to share­hold­ers. This would prevent these compan­ies from anonym­ously giving to polit­ic­ally active busi­ness leagues, most notably the U.S. Cham­ber of Commerce, which are not required to disclose their donors.

Disclos­ure helps voters under­stand the messages they receive before they go to the ballot box and guard against improper rela­tion­ships that might form between elec­ted offi­cials and their polit­ical bene­fact­ors. The DISCLOSE Act is the best way to address secret spend­ing in our elec­tions and Congress should enact it without delay.

(Photo: Morgue­file)