DISCLOSE and Disclosure

July 27, 2010   •  By Brad Smith
Default Article

As DISCLOSE careens toward a cloture vote this afternoon, it appears more and more like the purpose of the final vote is the same as the purpose of the original bill – to serve as a campaign tool for Democrats in Congress.  There is no evidence that the votes are there to break the a filibuster, and many supporters of DISCLOSE, from the President on down, have already shown themselves to be willing to shamelessly demogogue the issue, misrepresenting the Supreme Court’s holding in Citizens United v. FEC, misrepresenting history and experience, and misrepresenting the contents of the so-called DISCLOSE Act. Our Jeff Patch reviews a few of these misrepresentations here.

Some of these misrepresentations can only be said to reflect either gross ignorance of the bill’s contents or outright prevarication, as when supporters of DISCLOSE claim that the bill bans no speech.  As we have pointed out repeatedly, it quite clearly bans a good deal of corporate speech (but not union speech) that was legal not only after Citizens United, but speech that was legal even before Citizens United. Others might charitably be considered matters of interpretation and effect, such as when supporters claim it treats unions and corporations alike.  We suppose, for example, that it is true that both unions and corporations with 20% minority stock ownership are subjected to onerous limits, and seeing that unions don’t have stock, this is, as in the famous example of the novelist Anatole France, the type of equality that “forbids rich and poor alike to sleep under bridges… .”  But unions with foreign membership – the rough equivalent of stock ownership – and even foreign citizens on their boards, are exempt.

We have noted as well the special carve outs for some of the nation’s most powerful interest groups (the NRA and the Sierra Club, and also the AARP, although the latter insists it won’t use the exemption), the blatantly partisan intent of the bill’s sponsors, the rush of the final bill through the Senate without Committee hearings, and the seedy drafting of the bill by “public interest” lobbyists and Democrats with no bipartisan input. All of these would be valid reasons for a member to vote against the bill, which, frankly, do more to create an “appearance of corruption” than any corporate or union spending in an election this fall is likely to do. 

But at this final hour, it is worthwhile to go back one final time and review whether there is any serious reason for this bill; that is to say, is there really any need for more “disclosure?”  We have been over this before, but it worth it to review once more.

Here is the current federal law re disclosure of political spending:

1. All independent expenditures over $250, whether by individuals, corporations, or unions, are already subject to disclosure under 2 U.S.C. 434 (c).  This disclosure includes the name of any individual, corporation or union that contributes in excess of $200 for the expenditure; the name of any person who receives a disbursement of $200 or more for the expenditure; the date, amount and purpose of the expenditure; a statement as to what candidate the expenditure supports or opposes and the office sought by that candidate; and a certification that the expenditure was not coordinated with that candidate, his committee, or his agents.  These reports must be filed quarterly and again at least 12 days before the election.

2. If a corporation, union, or other entity using corporate or union money spends $10,000 or more for any “electioneering communications” (that is, an add that merely mentions a candidate’s name, regardless of whether it has anything to do with an election, within 30 days of a primary or 60 days of a general election), it must disclose within 24 hours of the expenditure the name of the person, corporation, or union making the expenditure; any other person sharing control over the expenditure; the principle place of business of the spender; the identification of each person to whom over $200 was disbursed for the expenditure; the election and the names of any candidates to whom the expenditure pertains; and the names and addresses of individual, corporation, or union contributing $1000 or more to the effort.  2. U.S.C. 434 (f).

3. In addition to the above requirements, if a corporation, union, or group accepts $1000 or more in contributions or makes $1000 or more in expenditures and has a “major purpose” of influencing elections, it becomes a “political committee,” and must register with the Federal Election Commission and report all of its spending and contributions in excess of $200, and the identities of the contributors and recipients, regardless of whether or not they are election related.  2 U.S.C. 434(a). 

4.  Any group which organizes under Section 527 of the Internal Revenue Code and but does not qualify as a “political committee” (a broad category that would include famous organizations such as MoveOn and Swift Boat Veterans for Truth) is required to report all of its donors over $200 to the Internal Revenue Service.  Section 527 of the Code is the section under which most political organizations are organized.

5. Any individual, corporation or union that pays for any public ad must clearly include on the ad the name and address or phone of the person, corporation, or union paying for the ad, and state whether or not the ad was authorized by any candidate or candidate campaign committee.  Radio and television ads must also include a clearly spoken statement identifying who “is responsivle for the content of this advertising.”   This must also appear clearly on the screen for at least 4 seconds. 2 U.S.C. 441d.

Despite all these existing provisions in the law, DISCLOSE backers keep weaving hypotheticals claiming that DISCLOSE is necessary if we are to know “who is paying for these ads.”  Yet we have yet to see a single example in which the payer of the ads, or at a minimum their orientation (pro-business, pro-Democrat, closely tied to unions, etc.) could not be found either on the face of the communication, in the reports already required by law, or within a 5 second Google search.

DISCLOSE is bad enough, and shameless enough, on the policy merits that we have not much waded into the Constitutional issues involved.  But we do think a mention of the Constitution may be worthwhile in this constitutional republic. 

Disclose advocates have regularly stated that the Supreme Court has blessed anything called “disclosure.”   This is simply not true.  In fact, this is still an area of considerable controversy and uncertainty within the law.  While it is certainly possible that the Supreme Court would uphold the provisions of DISCLOSE, it is also possible that it would not. 

Most of the disclosure provisions of DISCLOSE have never gone before the Supreme Court, or indeed any court.  To give just one example, we have calculated that the required on-air disclaimers in DISCLOSE  would take up nearly half of every 30 second television ad.  Such a requirement is previously unheard of.  It is not at all clear that the Court would allow the state to so hijack the speaker’s message for such nebulous benefit, given all the other disclosure (outlined above) already required by the law.  The Court has long limited the government’s ability to compel speech or to compel a speaker to deliver his message in a particular fashion.  See e.g. West Virginia State Board of Education v. Barnett (1943); Wooley v. Maynard (1977).  The Court has allowed more flexibility in the realm of campaign finance, true, but it has never given Congress a blank check to legislate in the area, and it should be remembered that the general First Amendment rule is that the government may not compel speech.  Similarly, the Court has often protected donor identities. For example, in McIntyre v. Ohio Elections Commission, a 1995 case, the Supreme Court ruled that the state of Ohio could not require an individual circulating leaflets on a ballot issue to include a disclosure notice on the material.  In NAACP v. Alabama (1957), the Court prohibited the state from requiring the NAACP to reveal its donors and members.  Again, while the Court has given Congress more leeway to legislate disclosure in the campaign finance context than elsewhere, the general First Amendment rule remains that the right to speak anonymously is protected by the First Amendment, and the Court has not approved of all campaign finance disclosure requirements (it also rejected certain requirements as applied to some groups in Buckley v. Valeo).  In each such case, in order to overcome the presumptive First Amendment rights, the legislature must show a compelling interest in obtaining the desired disclosure.  Again, given the extensive disclosure already required and the duplicative nature of the provisions of DISCLOSE, it is not clear that the Court would uphold these measures.  There is certainly some support in the precedents, for arguing that it would.  But it is not the slam-dunk its proponents have been claiming, nor are these requirements settled law.  There will be court challenges should DISCLOSE pass, and we would predict that some of those challenges would be successful given the bill’s shotgun, overkill approach.

Beyond disclosure, the other big argument – the one the President demogogued yesterday and the one we expect to see demogogued relentlessly in this fall’s campaign – is that DISCLOSE is necessary to prevent foreign influence in campaigns.  Here it is once more worth noting that any corporation that is headquartered or incorporated outside of the U.S. is already prohibited from any spending in any U.S. political campaign.  2 U.S.C. 441e. Furthermore, the FEC prohibits any foreign national from being involved in any decision about spending – in other words, even if the corporation is a U.S. corporation, foreign nationals may not play a role in decisions about political spending.  11 C.F.R. 110.20(i). 

If anyone wants to know why Congress has such a low public reputation nowadays, one need look no further than DISCLOSE.  Now, a Senate that hasn’t passed a budget and is not even having hearings on such is going to use time today to debate a measure for no seeming purpose but to give the majority party an issue to demogogue this fall.  We suspect the public will see through the ruse. 



Brad Smith

Share via
Copy link
Powered by Social Snap