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Exec­ut­ive Summary

Where do disclos­ure laws stand post-Citizens United? What does the 2010 U.S. Supreme Court ruling mean for state-based laws? And are disclos­ure laws consti­tu­tion­ally sound? This report exam­ines these ques­tions and urges trans­par­ency through modest changes to state-based elec­tion laws. The report finds that recent Supreme Court decisions reaf­firm the consti­tu­tion­al­ity of disclos­ure—and show an ongo­ing need to promote trans­par­ency in the money in polit­ics realm.

The first part of the report offers a primer on campaign finance laws in 2011. In case after case, the U.S. Supreme Court has upheld the consti­tu­tion­al­ity of both disclaim­ers and disclos­ures for two types of polit­ical ads: (1) inde­pend­ent expendit­ures which expressly advoc­ate for or against a candid­ate and (2) elec­tion­eer­ing commu­nic­a­tions.

The second part of the report shows an urgent need for states to improve their disclos­ure laws in the wake of the Citizens United decision. In 24 states, new polit­ical play­ers are now allowed into elec­tions. Yet even in states that were not directly affected by the recent Supreme Court ruling, there is an urgent need to ensure that extant disclos­ure laws are in step with the way modern elec­tions are conduc­ted. Moreover, this report shows that states focus not only on spend­ing by candid­ate commit­tees and polit­ical parties, but also on outside spend­ing by interest groups which is done inde­pend­ently of candid­ates or parties.

The third section explores the Consti­tu­tional interests states have in provid­ing the voting public with robust disclos­ure of the sources of money in polit­ics includ­ing:

  • The Voter Inform­a­tional Interest in Candid­ate Elec­tions;
  • The Anti-Corrup­tion Interest in Candid­ate Elec­tions;
  • The Anti-Circum­ven­tion Interest in Candid­ate Elec­tions;
  • The Elect­oral Integ­rity Interest in Ballot Initi­at­ives; and
  • The Due Process Interest in Judi­cial Elec­tions.

Policy sugges­tions are laid out in part four of this report. First, mimick­ing the campaign finance report­ing that is required in federal elec­tions, states should adopt laws to capture the funders of inde­pend­ent expendit­ures. Second, states should adopt disclos­ure for elec­tion­eer­ing commu­nic­a­tions (or what are often known as “sham issue ads”). However, these disclos­ure laws should be craf­ted care­fully to avoid captur­ing tiny polit­ical expendit­ures in state elec­tions. Third, states can consider adopt­ing disclos­ure laws that are more expans­ive than federal laws. For example, the federal law does not currently regu­late elec­tion­eer­ing commu­nic­a­tions that appear in print. But states may have many valid reas­ons for requir­ing disclos­ure of non-broad­cast sham issue ads.

Given the expan­ded use of non-profits to veil polit­ical spend­ing, states need to take a hard look at whether their current disclos­ure laws capture this type of spend­ing adequately. Examples from Cali­for­nia and Minnesota show how states might tackle this thorny issue through report­ing require­ments. An example from Connecti­cut also shows how states may achieve trans­par­ency through the use disclaim­ers which name top funders in the polit­ical ad itself.

Finally, this report encour­ages account­ab­il­ity for corpor­ate polit­ical spend­ing through modest changes to states’ corpor­ate laws in addi­tion to changes to their elec­tions laws. These changes could include requir­ing compan­ies to provide share­hold­ers with a compre­hens­ive list of polit­ical spend­ing on a peri­odic basis and/or allow­ing share­hold­ers the abil­ity to vote on a corpor­a­tion’s future polit­ical budget.

This report concludes that the Citizens United, Doe, and Caper­ton cases reaf­firm both the consti­tu­tion­al­ity of disclos­ure and the continu­ing need for trans­par­ency around who is fund­ing elec­tion battles. Consequently, states have wide latit­ude to require disclos­ures not only from clas­sic polit­ical commit­tees, but also any entity fund­ing inde­pend­ent expendit­ures or elec­tion­eer­ing commu­nic­a­tions in future state elec­tions.