Despite backlash from Democrats, good government groups think the language in the year-end spending bill that alters campaign finance law benefits both parties’ pocketbooks too much for it to be carved out. The watchdogs were among the first to criticize provisions buried deep in the “cromnibus” released Tuesday night that would dramatically ease spending limits on individual contributions to national political party committees. House Minority Leader Nancy Pelosi followed suit. The California Democrat said she learned about the provisions only one day before the carefully negotiated agreement was released. Pelosi, one of the top fundraisers for the Democratic Congressional Campaign Committee, announced she’s “deeply troubled” by how that part of the package would increase by tenfold the amount of money wealthy individuals can contribute. Reps. Chris Van Hollen of Maryland and Steve Israel of New York, former chairmen of the DCCC, joined in the criticism of the legislation that would allow a single individual to contribute to each national party’s three committees a total of $1.5 million per two-year election cycle.
A top House Democrat plans to file a lawsuit in federal district court Wednesday challenging the Internal Revenue Service’s interpretation of a law that governs whether groups qualify for tax-exempt status as so-called social welfare organizations. Rep. Chris Van Hollen (D-Md.), the ranking member of the House Budget Committee, said Tuesday that he will serve as lead plaintiff in the case, which addresses one of the main concerns that surfaced with the recent IRS targeting controversy: differences between federal law and the IRS rules on eligibility for 501(c)(4) candidates. Current law says the organizations must engage “exclusively” in social welfare activities, but IRS tax code requires only that they are “primarily engaged” in such purposes. That discrepancy has led to confusion for application processors, who have struggled to determine what constitutes political activity and how much should disqualify groups from tax-exemption, according to agency officials.
Rep. Chris Van Hollen (D-Md.) said Tuesday that he and two campaign finance watchdog groups would sue the IRS, challenging regulations that allow nonprofit groups to be involved in politics if they’re “primarily” devoted to a social welfare purpose. Van Hollen said he and watchdog groups Campaign Legal Center and Democracy 21 would sue to clarify an IRS regulation that he said was at odds with the law, which requires certain groups to “exclusively” engage in social welfare to earn nonprofit status. The IRS regulation permitting groups “primarily” engaged in social welfare allows the organizations to participate in an undefined amount of political activity, said the congressman, a leading advocate of campaign finance reform and ranking member of the House Budget Committee.
The Democrat-authored campaign finance transparency bill known as the DISCLOSE Act failed to win approval in either the 111th or the 112th Congresses, but its backers have set out to try again in this session. Rep. Chris Van Hollen, D-Md., reintroduced the legislation on Thursday, calling the bill “a first step to clean up the secret money in politics.” The bill is unchanged from last year’s version; it would require all corporations, unions and super PACs to report campaign expenditures of $10,000 or more. The bill also covers financial transfers to groups that use the money for election-related activity. At the outset of the 113th Congress, the legislation’s prospects appear no better than they were previously.
Conservative groups pumping hundreds of millions of dollars into the 2012 campaign won a reprieve Tuesday when the U.S. Court of Appeals in Washington overturned a decision requiring organizations that run election-related television ads to reveal their donors. In an unsigned decision, a three-judge panel said a lower court erred in finding that Congress intended to require such disclosure. It sent a case brought by Rep. Chris Van Hollen (D-Md.) against the Federal Election Commission back to the district court and called on the FEC to defend its regulations or issue new ones. Practically, the ruling changes little in the short term: Nonprofit organizations such as the U.S. Chamber of Commerce, Americans for Prosperity and Crossroads GPS changed the type of ads they were running this summer in order to sidestep the lower-court ruling and keep their donors secret.
Since the mid-2000s, a small cadre of lawyers and activists has reshaped the role of money in American politics. Led by Senate minority leader Mitch McConnell (R-Ky.), attorney James Bopp, Jr., and law professor and activist Brad Smith, this group has won a string of victories that have imploded campaign finance laws. Citizens United? That was Bopp. Super-PACs? Thank Smith’s Center for Competitive Politics. The 2010 and 2012 DISCLOSE Act filibusters? All McConnell. But it’s been rough going for the deregulators as of late. They’ve lost a slew of cases intended to gut existing political disclosure laws. They’ve failed to knock down bans on contribution limits. And despite their objections, the Internal Revenue Service has said it might revisit how it regulates dark-money nonprofit groups, which outspent super-PACs 3-to-2 in the 2010 elections and unloaded at least $172 million through June of this election cycle. “The free speech crew’s winning streak has hit a bump in the road,” says Neil Reiff, an election law attorney who used to work for the Democratic National Committee.
The Federal Election Commission told political advocacy groups Friday that it would enforce new disclosure rules for some nonprofits under a recent court ruling, but many key groups have taken steps to evade the requirements. Legal experts said the FEC guidance makes it clear that nonprofit groups will have to reveal some of their major donors if they pay for electioneering communications — also known as “issue ads” — that name political candidates but stop short of urging viewers to vote for or against them. But advocacy groups such as the conservative Crossroads GPS still have many ways of evading disclosure, often simply by changing the tenor or language of their advertising, experts said. The rules also only apply to ads that run close to an election. Major advocacy groups had already stopped running issue ads close to primary elections this summer in anticipation of the FEC’s guidance. The U.S. Chamber of Commerce has said it will simply alter the language of its ads to avoid reporting contributors to the FEC.
Secretive outside groups shelling out millions of dollars for political advertisements could now be required to disclose the donors who cut them big checks. Responding to a recent court decision, the Federal Election Commission said Friday that it will force nonprofit groups that air ads that refer to specific federal candidates, but don’t overtly advocate for or against them, to report the names and addresses of donors who give more than $1,000. The FEC’s enforcement could affect nonprofits such as the Karl Rove-backed conservative group Crossroads GPS, the U.S. Chamber of Commerce and the Democratic group Priorities USA. Those groups have been able to raise unlimited amounts from donors, but haven’t been forced to disclose their names. The agency will require groups to report their donors retroactively, it said Friday. Groups will be forced to report donors who gave more than $1,000 since March 30, 2012.
Democrats launched another push for campaign finance transparency on Thursday, aiming to combat the Supreme Court’s Citizens United ruling as Republicans outraise them on the campaign trail. Minority Leader Nancy Pelosi (D-Calif.) dedicated the bulk of her weekly press conference to the DISCLOSE Act — which would increase disclosure requirements for campaign contributions — and Senate Democrats held a press conference Thursday afternoon to plug the bill, which will go before the Senate next week. Rep. Chris Van Hollen (D-Md.), who joined Pelosi at the conference, said Democrats have filed a discharge petition for the bill in the House. “This is a House of Representatives that is pretending that it is one of the most open House of Representatives in recent times, and yet they have refused to even hold a hearing on the DISCLOSE Act,” Van Hollen said. Indeed, Democrats have been banging this drum for months to no avail, and there’s nothing to indicate their latest attempt will yield a different result.
Alexi Giannoulias “can’t be trusted,” the 2010 election ad said. His family’s bank loaned money to mobsters, he accepted an illegal tax break and he even squandered money that families were saving for college. If the charges were true, the U.S. Senate candidate from Illinois must have been a real creep. But they were bogus. Giannoulias, the Democratic candidate, lost anyway. His accuser was not his opponent. It was an anonymously funded, pro-Republican nonprofit called Crossroads GPS, a “social welfare” organization that, thanks to the U.S. Supreme Court’s Citizens Uniteddecision, can accept unlimited donations from corporations, wealthy individuals and unions, and run attack ads. In short, it functions just like the better-known super PACs but with a major distinction — it is not required to disclose its donors, despite the high court’s consistent support for disclosure rules.
Editorials: Is Campaign Disclosure Heading Back to the Supreme Court? – Don’t expect to see Karl Rove’s Rolodex just yet | Rick Hasen/Slate Magazine
The news this week that a federal appeals court has refused to block a lower court ruling requiring the disclosure of more funders of campaign ads has campaign finance reformers tasting their first victory in a long time. “It’s the first major breakthrough in overcoming the massive amounts of secret contributions that are flowing into federal elections,” Fred Wertheimer of Democracy 21 told the Los Angeles Times. But don’t expect to see Karl Rove’s Rolodex just yet. Crossroads GPS and other groups have found that raising money from donors who don’t want to be disclosed is good for business, and they’ve got a few ways to keep the unlimited money poured into campaigns secret yet. And before you get too excited it’s worth considering that the Supreme Court could well help them keep their secrets in 2012, even though the court has so far been a big supporter of disclosure laws.
Since 1974, federal campaign finance law has required the disclosure of campaign donors and spenders. Opponents of disclosure have long argued that at least some disclosure is unconstitutional under the First Amendment’s guarantee of free speech and association, because compelling someone to reveal the names of those funding political speech will chill vigorous participation in politics. As I’ve explained, the Supreme Court rejected that constitutional challenge in the 1976 campaign finance case, Buckley v. Valeo. Confronted in that instance with a law that required disclosure of even very small contributions, the court held that the disclosure laws were justified by three important government interests: First, disclosure laws can prevent corruption and the appearance of corruption. Second, disclosure laws provide valuable information to voters. (A busy public relies on disclosure information more than ever.) Third, disclosure laws help enforce other campaign finance laws, like the ban on foreign money in elections. But the court has repeatedly said that if someone could demonstrate a real threat of harassment, they could be exempt from the disclosure laws.
Rep. Chris Van Hollen (D-Md.) has won another victory in his legal battle to force the Federal Election Commission to write stricter disclosure rules for certain types of political ads. A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit rejected a request by two conservative groups that it stay a March federal district court ruling that sided with Van Hollen. Van Hollen sued the FEC last year, arguing that its disclosure regulations for “electioneering communications” were too narrow and contrary to the 2002 Bipartisan Campaign Reform Act. The appeals court ruling, which came late on Monday, raises the prospect that politically active trade associations and nonprofits will have to more fully report who funds the ads they run on the eve of an election.
Advocacy groups spending millions of dollars to influence the 2012 election now face the prospect of having to reveal their secret donors, after a federal appellate court panel refused to block a lower-court order requiring the disclosure. In a 2-to-1 decision issued Monday evening, a U.S. Court of Appeals panel here declined to stay a ruling by a federal judge requiring tax-exempt organizations that run election-related television ads to disclose their donors. The panel’s decision was a significant victory for campaign finance reform advocates who have been fighting against the deluge of money — much of it from undisclosed donors — that has flooded the political landscape in the wake of several Supreme Court decisions, including the 2010 Citizens United case.