As Sens. Olympia Snowe and Susan Collins, both Maine moderate Republicans, follow in the footsteps of Sen. Scott Brown (R-Mass.) and pan the DISCLOSE Act, campaign finance “reformers” are getting desperate.
Take a 1,500 word missive penned by Democracy21 President Fred Wertheimer to supposedly shed light on the “Myths and Realities Regarding Claims that Labor Unions are Treated More Favorably than Corporations by the DISCLOSE Act…”
The piece, dripping with self-righteous condescension toward anyone who dare disagree with the erudite “reformer,” falsely asserts that the DISCLOSE Act “does not tilt to Democrats or Republicans” because “[d]isclosure laws do not advantage either party.” Throughout this rant, Wertheimer obfuscates the plain fact that the DISCLOSE Act includes myriad speech prohibitions and added layers of regulation beyond simple disclosure provisions.
The theme of Wertheimer’s piece is that all the provisions of the DISCLOSE Act apply with equal force to corporations and unions. However, Wertheimer’s fallacy is treating the proposed prohibitions on corporate speech as if they were some sort of tablet of regulations handed down from Moses rather than partisan provisions crafted by Democrats behind closed doors. It’s as if Congress crafted a cookie selling ban and then claimed it simply applied to Boy Scouts and Girl Scouts equally.
Four provisions in the DISCLOSE Act provide uneven benefits for labor unions while meting out disproportionate prohibitions or regulations for companies. One would have to be incredibly naïve to think that these provisions were written to apply evenly to business and labor interests.
First, Wertheimer claims that the $600 disclosure threshold is not a threshold that benefits labor unions because the trigger amount was simply meant to require disclosure of “significant donors” and not simply every person who provided funds to an organization. Again, Wertheimer willfully obfuscates that this bill was written in secret by majority Democrats without input from the minor party. Anyone looking critically at the impact of this provision would realize that it would cover a large number of business and trade groups and exempt most labor unions (average labor union dues are $377). You’d have to be living in fantasy land to think all these advantageous provisions were coincidences.
Second, companies with government contracts over a certain threshold are prohibited from making political expenditures. There’s no added disclosure, just a blanket ban. This would prevent over half of the top 50 U.S. companies from spending money on politics. It would prohibit no labor unions from political spending. Furthermore, that there’s no legitimate rationale for restricting the political spending of companies with competitively-bid, transparent government contractors after the Supreme Court ruled in Citizens United that independent expenditures are not corrupting. Perhaps, in a technical sense, this provision applies equally to labor unions and companies, but it was clearly written to impact corporations and labor unions much differently.
Wertheimer claims that this provision simply extends the prohibition of campaign contributions by government contractors. But as any campaign finance lawyer knows, independent expenditures are treated under a different standard than direct campaign contributions, which the Supreme Court has ruled can cause the appearance of corruption. In any event, if Democrats are just going to make up categories of people who can have their First Amendment rights stripped away, labor unions that represent government contractors or labor unions who negotiate for collective bargaining agreements from the government have the same financial interest as government contractors, and should also be included in a political expenditures prohibition.
Third, U.S. companies with minimal foreign investment (20 percent of voting shares or 5 percent of foreign government ownership) would be prohibited from making political expenditures. Again, Wertheimer claims this is fair by asserting that no labor union would meet such criteria. Well, that’s the point: Democrats crafted these speech prohibitions to hamstring their opponents without touching their allies.
Setting aside the aforementioned fact that there’s no rationale for stripping away the First Amendment rights of U.S. companies with a minimal foreign association (and the fact that foreign nationals are already prohibited from making political expenditures), if the goal were really removing foreign influence, then a similar provision to restrict unions with foreign members and board members—such as the Service Employees International Union and the International Brotherhood of Electrical Workers—would have been included.
Fourth, and finally, the DISCLOSE Act contains an exemption from disclosure requirements—inserted hours before the House vote on the bill—for labor union transfers between affiliates. The provision theoretically applies to other dues-paying groups, but it’s written in a way to principally advantage labor unions. When business groups transfer money to state affiliates, they will have to put opposing interests on notice that they’re planning to spend on politics in certain areas. Not so for labor unions. Even Wertheimer concedes that “[t]his exemption from the $50,000 reporting threshold is a confusing and unnecessary provision that should be eliminated.”
These four provisions were not written in a vacuum. They provide clear advantages to labor unions and prohibit the political speech of many business groups. The majority party was not unaware of these implications when writing the bill.
That’s why Republicans like Sens. John McCain, Olympia Snowe, Susan Collins, Scott Brown and others who are generally sympathetic to campaign finance regulation have balked at the DISCLOSE Act: it’s a nakedly partisan attempt to rewrite campaign finance law in the midst of an election.