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How Obama Can Help Fix Big-Money Disclosure Without Congress

There’s little chance legislators will do anything about exploding spending, so here are three things the White House can do on its own.

  • Avram Billig
Published: May 1, 2014

Crossposted at The Atlantic

Congress is waking up to the reality of secret election spending. On Wednesday, the Senate Rules Committee investigated the sharp increase in campaign dollars coming from anonymous sources. President Obama has called this trend “a threat to our democracy” and pushed for reform. In a gridlocked Congress, there’s little chance for serious reform any time soon. But one step that’s been overlooked is the ways Obama could use executive action to force more disclosure.

In 2012, political spenders filtered more than $300 million through so-called “dark money” groups that hide their donors’ identities. That left Americans unaware of who was trying to influence their vote. In the 2014 cycle, dark-money groups have spent three times more than they did at this point in 2012, which is especially surprising since there is no presidential election.

Secrecy is becoming a fixture of American elections, but it wasn’t supposed to be this way. When the Supreme Court legalized unlimited campaign spending in the 1970s, the justices praised disclosure as an answer to corruption concerns. In its Citizens United decision, the Court argued that full disclosure would let shareholders hold companies accountable. Instead, anonymous spending is now skyrocketing. But there is much that the president could do.

Start with government contractors—groups that receive taxpayer money in exchange for goods and services. Because contractors receive federal funds, their relationships with politicians are especially prone to corruption. That’s why they are prohibited from contributing to candidates’ campaigns. Yet the same groups can spend unlimited sums to elect politicians without any public scrutiny. The president can correct this inconsistency by requiring any contractor who receives taxpayer funds to disclose its dark-money spending. In 2011, the administration drafted an executive order to do just that, but it was leaked and quickly quashed by Republicans in Congress. Since then, the problem has only gotten worse. It’s time to reintroduce the proposal. Just as Obama led on minimum-wage reform by raising contractors’ pay floor, he can lead on transparency by requiring more contractor disclosure.

Then there’s the matter of corporate spending. When corporations hide their political activity, shareholders have no way of knowing if their money is used to support causes they disagree with. In 2013, for example, a D.C.-based trade group spent $11 million to oppose a Washington state initiative to require genetically-modified-food labeling. The measure failed, and a state investigation revealed the money came almost entirely from corporate backers like Coca-Cola and General Mills. If not for the investigation, shareholders would have been unaware of their contribution to defeating the GMO-labeling initiative. The Securities and Exchange Commission is responsible for providing shareholders with information about the companies they finance. Obama could encourage the agency to require publicly traded corporations to reveal their dark-money spending.

How about political ads themselves? The president could request that the Federal Communications Commission require ad disclaimers—the text at the end of an ad identifying the sponsoring organization—to actually reveal who is funding the organization. That way, top funders would no longer be able to hide behind vaguely named groups like Winning Our Future or American Tradition Partnership (two groups cited for campaign-finance violations).   

Of course, Congress needs to be part of the process of increasing disclosure. But as government reformers know, it is difficult to convince legislators up for reelection to alter the system that got them elected in the first place. Democracy would be better off if Obama used the power of the executive to fight back against secret election spending.


(Photo: AP)