In a recent report, self-styled reform organization Public Citizen decried the trend it sees in the 2010 campaign, where some groups speaking out about candidates are keeping the identities of their donors under wraps. Implicit in this report is a call for the Federal Election Commission to require donors to groups be identified, regardless of whether they meant to fund the group’s communications. The folks at Public Citizen support additional disclaimer and donor reporting such as those set forth in the DISCLOSE Act.
First, why is this year different? Well, because the FEC and activist groups are trying to reconcile an obsolete campaign finance statute with current constitutional doctrine. The statute says that donors to groups that make electioneering communications (broadcast communications that identify a candidate, are targeted to his district, and run within 30 days of a primary or 60 days of a general election) are to be disclosed if they gave $1,000 or more in this year or the last year, and that corporate and union money could not be used for the communication. But, the Supreme Court looked at this law in Federal Election Commission v. Wisconsin Right to Life and said the funding restriction could apply only if a communication was the functional equivalent of express advocacy. So, what the statute calls an electioneering communication for the funding restriction, and what the Court commanded, are two different things. What of the reporting requirements? They lingered.
Then in Citizens United v. Federal Election Commission the Court concluded that the corporate (and by extension, labor) ban on making independent expenditures was facially unconstitutional. The reporting requirement (any entity making an independent expenditure over $250 must file a statement, and report the identity of donors over $200 for the “purpose of furthering an independent expenditure” )—again—lingered.
Pre-WRTL and Citizens United, the reporting requirements applied to political groups, and a handful of ideological corporations, because regular corporations and labor unions were prohibited from making IEs and ECs. Today, any corporation or labor treasury can fund ECs and IEs. But what should they report? Public Citizen glosses over the serious interpretive debate present in the law after the Court’s recent decisions. The “Fading Disclosure” report attributes reductions in donor disclosure reports to evasion and “feckless” FEC enforcement. But that’s not fair.
Think of the possible alternatives for donor disclosure now. At one extreme, any person who transfers $200 to a union or corporation might be listed in an independent expenditure report; or $1,000 in this year or the year before for an EC report. After all, by moving money to the corporation, they “furthered” the expenditure of corporate money. But how useful would it be to comb through the independent expenditure reports of the U.S. Chamber or the AFL-CIO, if they listed every single monetary transfer over $200? Not very. Obviously this is a dysfunctional and overbroad standard. (Recall that the reports we are discussing are filed by “persons” who are explicitly not political committees, that is, their major purpose is something other than electing or defeating candidates. So, there is reason to expect that most of the entity’s receipts are for something unrelated to IEs or ECs).
At the other extreme, the law could require only disclosure of transfers of $200 (or $1,000 in the EC context) or more that the donor has specified can be used only for a specific ad buy, including script and dates. I doubt any IE contributions would be reportable under this extremely narrow interpretation, as a group’s supporters are (probably) not also involved in the details of communicating with the public, especially given the quick turnaround of broadcasting communications.
Assuming the law should be neither absurd nor meaningless, the useful and appropriate standard is somewhere in between. Obviously, the law should exclude money paid in an commercial exchange. Dues and fees owed the entity whether or not it makes a single IE or EC should be excluded. Money donated specifically for IEs and ECs is probably fair game. But that leaves a pretty broad gray area. And that assumes that disclosure serves a useful purpose.
We would ask a more fundamental question—what good does disclosure in this context do? How mysterious are the groups who today, we are told, are spending money without reporting its sources? Because entities making EC and IEs still file notices with the FEC, we can review that data and learn the names of these groups.
Many of the biggest EC and IE groups are political party committees. They already disclose, and in any case the public is well acquainted with the two major parties and what they stand for (or not). The other groups who, as of this writing have been active include the 60 Plus Association, Working America, and Crossroads GPS. Working America has a website at http://www.workingamerica.org, and under “about us” identifies itself as associated with the AFL-CIO. That is salient information that I acquired easily, and gives me enough to understand their agenda and political goals. Knowing that a union official, or local of some union, gave to this group doesn’t really tell me much more. The 60 Plus Association, website at http://www.60plus.org, identifies itself as the conservative alternative to the AARP. Two useful bits of information—that they are conservative and focus on issues relevant to seniors—are pretty much what I need. Knowing that Daddy Warbucks also gave then money doesn’t help much. Crossroads GPS has a website, too, http://www.crossroadsgps.org, which touts their support for free enterprise and lower spending. Of the groups, theirs is the least enlightening, but . . . what do I see on my Google search? Media coverage—a lot of it—identifying Karl Rove and Ed Gillespie as the founders of the group. I can’t imagine a donor whose name would have as much salience to the general public as Karl Rove’s name. If you care about politics, you love him or hate him. What else do you need to know?
Stepping back from the question of statutory interpretation helps place the disclosure issue de jour in perspective. Whether or not the FEC’s standard is the “best,” American voters aren’t being duped by “shadowy” groups. There’s little threat to the electoral system from groups communicating with the public, even when their donors remain undisclosed.
