DISCLOSE Act still overwhelmingly favors unions

July 23, 2010   •  By Sean Parnell
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Yesterday and today have produced the latest round of deception and obfuscation when it comes to the DISCLOSE Act and the privileged status as political speakers that unions would enjoy while much of the business community would be silenced.

Building on Fred Wertheimer’s misleading and since-debunked statements earlier this week, so-called campaign finance “reformers” are now pushing the line that the removal of only one of the many special deals for unions in the DISCLOSE Act somehow means that the legislation now treats both unions and business the same.

Needless to say, this spin is pure nonsense.

Roll Call today reports the following:

Reid Sets Up Showdown on Campaign Finance Bill

Senate Majority Leader Harry Reid (D-Nev.) has committed the Senate to a showdown on campaign finance legislation aimed at undoing a controversial Supreme Court ruling, despite the fact that he does not have the votes to break a GOP filibuster…

Democratic Conference Vice Chairman Charles Schumer (N.Y.), the primary sponsor of the bill, has made concessions aimed at drawing the support of moderate Republicans such as Sens. Olympia Snowe and Susan Collins of Maine and Scott Brown of Massachusetts.

Likewise The Hill writes about these supposed concessions:

The legislation… has been modified by Sen. Charles Schumer (D-N.Y.) to try to win the support of centrist Maine GOP Sens. Olympia Snowe and Susan Collins, who have both supported restrictions on campaign finance in the past.

Schumer has stripped and changed some provisions in the House-passed version of the Disclose Act that Collins and conservative groups have criticized as creating an unfair political advantage for unions over corporations…

[The changes] could play to the Democrats’ advantage and help them court Snowe, Collins and some conservative Democrats wary of the House bill’s exemptions for unions and other special interests.

And what concessions and changes exactly have been made? The “new” DISCLOSE Act introduced by Schumer is in most regards the same bill that passed the House at the end of June. The only notable difference is that the special exemption for union transfers between affiliates has been removed.

And indeed, this appears to be the concession (singular, not plural) that Senator Schumer has made in an effort to get the votes of Snowe, Collins, and Brown. As Politico reports:

…[Schumer] has removed other language that had been backed by the AFL-CIO and other unions excusing the labor organizations from having to report money transfers between affiliates.

An AFL-CIO spokesman said the giant labor organization hasn’t decided whether it will oppose the Schumer bill yet, but noted that union officials were displeased that the senator has stripped the affiliate transfer. Though it might ultimately cost the unions’ support, Schumer believes the move will pre-empt GOP attacks that the bill panders to such groups.

But suggesting that the removal of this one special exemption for unions should somehow be enough to insulate the legislation from criticism that it favors organized labor is absurd.

The exemption of union transfers among affiliates was only inserted into the House bill at the last minute as part of the manager’s amendment that was unveiled only hours before the Rules Committee hearing on June 23, a day before the House took up and passed the bill on the 24th.

Well before this special deal for labor was exposed, it was widely understood that the DISCLOSE Act significantly tilted the political playing field in favor of unions.

For example, on April 30, the day after the language of the first version of the DISCLOSE Act emerged from the shadows, the Center for Competitive Politics sent a letter along with a detailed analysis of the bill to Senator Schumer noting our concerns about the bill. The letter notes that the bill “imposes dissimilar burdens on business corporations, unions, and advocacy organizations.”

Addressing the ban on government contractors engaging in political speech, the analysis states the following:

The provision is also discriminatory by not imposing a similar burden on unions that directly negotiate for salary and benefits or receive government grants… In addition, it leaves out unions that represent workers at government contractors, who obviously have a substantial economic interest in whether the firm receives government contracts.

The following month on May 19, as the Committee on House Administration was preparing to hold hearings on the DISCLOSE Act, eight former members of the Federal Election Commission sent a letter to Committee members. In that letter the former Commissioners noted that:

…we are concerned that DISCLOSE threatens to upend Congress’ longstanding tradition of treating corporations and unions in parallel fashion, with similar burdens on each… Failure to maintain that even-handed approach towards unions and corporations threatens public confidence in the integrity of the electoral system.

Then as now, the two main provisions of DISCLOSE that severely restrict the First Amendment rights of business corporations while ignoring unions with similar alleged conflicts are the ban on government contractors and on business corporations with even minimal foreign investment making expenditures.

The contractor ban is the most sweeping and far reaching, and would effectively prohibit political speech by most large corporations in the country. The fact is that most companies of any large size in the country probably has some government contract.

PepsiCo is an example of just how broad the ban is – the military PX system buys tens of millions of dollars of Pepsi products each year, to be resold to our servicemen and women. These sales account for a miniscule fraction of Pepsi’s sales, but because of this the DISCLOSE Act would silence them.

Over half of the 100 Fortune 100 companies would be silenced by this ban.

Meanwhile, unions who represent workers at these companies are free to run all the ads they want. While there have been a few feeble attempts to justify this sort of disparity, the fact is that the likelihood of undue influence, corruption, or its appearance is identical at government contractors as it is with the unions at government contractors.

Consider a company like Boeing. The alleged fear is that Boeing, with billions of dollars in government contracts, might chose to air ads urging citizens to vote for candidates that will favor spending that produces further contracts for Boeing. The ultimate benefit for Boeing in this scenario, of course, is additional profits.

How exactly is this different from unions representing Boeing workers choosing to run ads urging citizens to vote for candidates that will favor spending that produces further contracts for Boeing? After all, the union stands to benefit just as much – the additional spending will preserve or increase union jobs, and lead to further union dues.

Likewise, government employee unions are exempted from the DISCLOSE Act’s ban on political spending by government contractors, despite the fact that they negotiate significant contracts for wages, benefits, and working conditions with the government. If it’s a concern that for-profit companies will spend money urging the election of candidates who will look kindly upon their spending programs, why is it not a concern that government-employee unions will spend money urging the election of candidates who will favor them in contract negotiations?

Finally, unions do receive direct government funds, in the form of grants, typically for worker training and safety programs. Why are we supposed to believe that independent expenditures by businesses pose a threat of corruption when it comes to government contracts, but independent expenditures by unions pose no similar threat when it comes to government grants to unions?

The ban on business corporations with even modest foreign investment also hits businesses while exempting unions.

Advocates of DISCLOSE claim that there is simply no parallel between foreign investment in a business and union membership. For example, Fred Wertheimer of Democracy 21 recently stated:

The reason there is no similar provision for labor unions in the Act is that there are no American-based unions in which a foreign individual, a foreign union or a foreign country exercises a similar kind of control. No one has presented any example of a union that would be covered by such a provision if it did apply to unions.

But this is simply untrue. A glance at both our northern and southern borders provides ample evidence that at the very least the possibility of similar “control” by foreign citizens exist.

It is relatively well known that in the agriculture and construction industries, and parts of the service sector, a substantial portion of the workforce is composed of immigrants, legal or otherwise (CCP of course does not take any sort of position on immigration issues). On the legal side of things, many of these immigrants have become U.S. citizens, but of course illegal immigrants by definition are not U.S. citizens, and likely some portion of the legal immigrant workforce community remain foreign citizens.

Well, it turns out that organized labor, which does not ask for any evidence of citizenship, has in recent years attempted to recruit non-citizen illegal immigrants to become union members. Here’s one story on this effort:

Carpenters’ Union Courts Immigrants to Increase Clout

DENVER — Over the past three decades, the United Brotherhood of Carpenters and Joiners has seen its share of interior construction jobs in Colorado plunge to just 10% from 70%. That decline has prompted union leaders to reach out to workers once shunned as the enemy: illegal immigrants…

In Denver, Houston, Atlanta, Phoenix, Kansas City, Mo., and other cities across the U.S., leaders of construction and service-sector unions are reaching out to immigrants to try to bolster their sagging memberships and clout. The carpenters’ union, for one, is determined to attract more members, regardless of their immigration status.

“If you want to grow, you have to represent the people who are doing the work,” says Jim Gleason, the carpenters’ labor boss spearheading the campaign in Colorado, where he estimates that two-thirds of all construction workers are immigrants, more than half of them undocumented…

How successful organized labor has been in recruiting illegal immigrants into their fold, I don’t know – by definition it’s the sort of thing that defies good accounting.

But it seems reasonable enough to believe that it is at least possible, even probable, that there are some union locals around the country, likely in the construction, agriculture, and low-wage service industries, where non-citizens account for 20 percent or more of the local’s membership.

And 20 percent, as the DISCLOSE Act makes clear, is the magic number for determining that foreign citizens are able to exercise control or influence of an entity, and thus must be barred from exercising their First Amendment rights.

On our northern border, a similar situation may very well exist, although having less to do with immigration and more with cross-border commuting. I’m told, for example, that in Maine along the Canadian border there are paper plants with unionized workforces. Is it not possible, even likely, that some of these unionized workforces are composed of 20 percent or more Canadian citizens who commute across the world’s largest undefended border to go to work?

The point is, contrary to statements by “reformers,” there are situations in which unions may have membership that is composed of at least 20 percent non-citizens, but the DISCLOSE Act doesn’t treat them the same way as it does business corporations. Unions are not barred from speaking if they have 20 percent foreign membership, nor are their executives required to certify under penalty of perjury that their membership is not composed of 20 percent or more non-citizens.

Similarly, there are unions that most definitely do have foreign board members – the International Brotherhood of Electrical Workers, for example, has a Canadian citizen on its board. Yet the DISCLOSE Act does not address this sort of situation, while it does ban corporations that have a majority of foreign citizens on its board from speaking.

So now Senator Schumer and the self-styled campaign finance “reform” community are frantically spinning that removal of one provision snuck into the House version of DISCLOSE late in the House process, now-you-see-it-now-you-don’t, should somehow make the bill more palatable for Senators Snowe, Collins, and Brown.

In truth, the DISCLOSE Act included from the very beginning language that would silence a huge segment of the business community, whom Democrats fear will be critical of them heading into the November elections, while permitting more Democrat-friendly unions to speak despite having fundamentally identical issues to those that would keep business from speaking. The removal of one fleeting provision concerning transfers between union affiliates does nothing to change the fact that the DISCLOSE Act radically tilts the political playing field in favor of organized labor.

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Sean Parnell