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Trust but Verify…

As elections turn into fundraising arms races, we need stricter disclosure laws to shine a light on spending. Voters must be able to “trust but verify” the true source of money in politics.

Published: March 2, 2011

Crossposted at The Hill.

A few weeks ago, we were reminded that President Ronald Reagan — had he lived — would have been 100 years old this year. We all have many, contrasting memories of President Reagan, but one signature phrase many can recall is “trust but verify.” Reagan said this while negotiating with the Soviet Union for increased transparency of our respective nuclear arsenals during the Cold War.

In 2011, nuclear arms races aren’t the only ones that could benefit from greater transparency. Too many American elections turn into a fundraising arms race where each side tries to spend the other into the ground. Like the Cold War — where there were proxy battles in Cuba, Vietnam and Korea instead of direct fights between the super powers — in elections there are also proxy battles, not between the candidates themselves, but among their ideological and financial supporters.

Unfortunately, an increasing percentage of political spending has turned stealth. The voting public cannot tell who is paying for a growing percentage of political ads, leaving them in the dark about who is trying to sway their vote — we’re told to trust, but can’t verify.

At the federal level, political spending can slip through the cracks between the tax code and election law. If political spenders try hard enough, they can conceal their identity, typically by spending through nonprofits like 501(c)(4)s or 501(c)(6)s instead of a transparent political action committee (PAC).

This problem has the potential to metastasize after Citizens United. For-profit corporations now have carte blanche to spend on federal elections using nonprofits as cover, an ability they did not have prior to the decision. Congress failed to pass 2010’s DISCLOSE Act, but it could still act this year to provide transparency to voters for the 2012 federal election — it may be easier to fix the law now in a non-election year. Support for transparency is at 92 percent and crosses party lines. This should be a win-win for both parties.
In 33 states there is a deeper problem than just abusing nonprofits to hide political spending. In these states, there is zero regulation of electioneering communications, or so called “sham issue ads,” which trash a candidate on TV right before an election. Spenders can get away with these attacks without any disclosure so long as they leave out magic words like “vote” or “support.” Clearly anyone sophisticated enough to run a TV ad is likely to learn how to avoid the words that trigger regulation. Meanwhile, six states fail to require reporting of classic “vote for Sarah” election ads if they are funded independently — that is, not by a candidate.

Fortunately, some of the states with the weakest disclosure laws, like Maryland and New Mexico, are stepping up to the plate to address their loopholes through new legislation. But they aren’t alone in having flawed disclosure laws. Political courage is needed across the nation to grapple with giving campaign finance disclosure laws a long overdue tune up so that election spending is transparent.

Voters — like Reagan — have a right to demand that, when it comes to political spending, they can “trust but verify” the true source.