DISCLOSE Act: Democratic leaders push self-serving campaign finance law

Lawmakers are introducing a bill today designed to subvert the Supreme Court’s ruling in Citizens United v. Federal Election Commission and intimidate dissenting groups into silence as midterm elections approach.

“The First Amendment says ‘Congress shall make no law… abridging the freedom of speech,’ not ‘Congress should protect some speech, but feel free to hyper-regulate the political speech of businesses and nonprofits,'” said Center for Competitive Politics Chairman Bradley A. Smith, a former FEC Chairman.

Twenty-one Republicans voted for McCain-Feingold and still serve in Congress. The fact that Democrats were only able to persuade two Republicans to join their gimmicky bill indicates that the DISCLOSE Act would serve the interests of incumbents, especially the Democratic majority—not the public interest,” Smith said.

Rep. Chris Van Hollen, the chairman of the Democratic Congressional Campaign Committee, and Sen. Chuck Schumer, the immediate past chairman of the Democratic Senatorial Campaign Committee, spent three months crafting the bill behind closed doors after rejecting significant Republican input.

The legislation would ban many companies from airing political ads, give candidates a windfall subsidy in ad time to respond to independent ads, regulate long-protected issue advocacy with more restrictive coordination rules and force nonprofits and trade groups to disclose their donors-even if donors don’t intend their funds to be used for influencing elections.

Citizens United vindicated robust political speech no matter the speaker,” said CCP Vice President Stephen M. Hoersting. “The First Amendment does not need a fix from self-serving politicians seeking a monopoly on political speech.”

NOTE: The following analysis is based on publicly-available information about the DISCLOSE Act. It will be updated as the legislative language becomes available.

Ban on business political speech

The legislation would prohibit government contractors and U.S. subsidiaries of foreign companies from engaging in independent political expenditures. This provision is almost certainly unconstitutional after Citizens United, which held that independent corporate speech in any amount is not corrupting. Foreign nationals are already prohibited under existing law from even providing advice regarding political spending; this law would strip away the First Amendment rights of American staff and shareholders even if as many as 80 percent of shareholders in a company are U.S. citizens. Furthermore, this provision does not appear to similarly restrict unions that receive government funding, unions with significant international membership/leadership, or public employee unions—which depend on government revenue just as much as federal contractors.

Disclosure overkill

Disclosure in campaign finance law should be intended to allow citizens to monitor their government—not allow powerful incumbents and opposing activists to pressure and harass donors and members of nonprofits and politically-involved groups. That’s why the law requires disclosure for direct contributions to candidates, which may have the potential to corrupt, but not for issue ads. Some disclosure proposals, like the ‘Stand By Your Ad’ mandate, provide no informational benefit and reduce the amount of available political speech; they’re simply designed to intimidate speakers and dramatically raise the costs of participating in politics. The provision requiring groups to either disclose all their donors over $1,000 or establish a “Political Broadcasting Spending Account” is almost certainly unconstitutional. The Supreme Court has ruled that the government may not force groups to establish separate, segregated accounts to speak (Citizens United) nor require advocacy groups to disclose their backers (NAACP v. Alabama)—unless donors earmark their funds for influencing elections. Progressive groups have also raised concerns about the extent of the disclosure provisions.

Bailout for candidates

The bill contains a provision to provide candidates and parties the lowest advertising rate, triggered when an independent group airs ads in a given media market. This is a nakedly self-dealing attempt to punish independent groups for speaking out against Members of Congress. If the Sierra Club sought to air an ad informing voters that a congressional candidate is weak on environmental issues and that his opponent should be elected, the candidate would enjoy the lowest possible rate to push back. That’s simply unfair. Candidates, especially incumbents, already have easy access to earned media and often enjoy benefits like high name identification and franked mail. They shouldn’t get a taxpayer subsidy to drown out grassroots groups on the airwaves, too.

Draconian coordination restrictions

Citizens United freed independent groups to air ads independent of candidates. The proposed update to coordination restrictions between independent groups and candidates would sweep up protected issue advocacy and chill grassroots advocacy. The provision would cover speech that “Promotes, Supports, Attacks or Opposes” a candidate during a period beginning 90 days before a primary through the general election. Such a broad restriction would ensnare ads advocating for Supreme Court nominees and other issues not related to elections, similar to the circumstances of Federal Election Commission v. Wisconsin Right to Life (WRTL). Several liberal groups—not to mention conservative campaign finance lawyers and national GOP committees—argued at March FEC hearings that the agency should instead adopt a WRTL standard that only regulates speech advocating the election or defeat of a candidate in a limited pre-election window. Another provision to loosen the restrictions on coordination between candidates and parties “a bit” is a step in the
right direction, but that restriction—which doesn’t serve any anti-corruption interest and will put candidates at a disadvantage after Citizens United freed up incorporated groups—should simply be abolished. As Democratic National Committee General Counsel Marc Elias testified before the FEC, it was never meant to apply to parties, anyway.


Van Hollen-Schumer: McCain-Feingold rerun
Center for Competitive Politics one-pager on the DISCLOSE Act.

CCP’s analysis of the DISCLOSE Act
CCP provides a comprehensive overview of the constitutional and policy issues with the proposed legislation.

[April 23]

Schumer-Van Hollen deserves filibuster
Brad Smith’s most recent contribution to Politico’s Arena explains why the DISCLOSE Act is a partisan campaign push, not a legitimate attempt to update campaign finance laws after Citizens United.

[April 25]

Money, money, money: Democrats push for campaign finance regulations
CCP Vice President Steve Hoersting discusses the proposals with Rep. Van Hollen and local NPR host Patt Morrison. [mp3]

[April 21]

How many Republicans does it take to screw over free speech?”
Although McCain-Feingold was a terrible set of political speech restrictions, it actually was bipartisan-unlike the faux bipartisanship of Van Hollen-Schumer.

[April 20]

The Center for Competitive Politics is now the Institute for Free Speech.