The Influence Industry: Opponents of unlimited outside election spending take issue to FCC

March 23, 2011

Democrats and public-interest groups have been trying for more than a year to limit the impact of a Supreme Court decision allowing unlimited outside spending on elections. So far, they haven’t had much luck.

But now a telecommunications lawyer has come up with a novel idea: Take it to the Federal Communications Commission .

Andrew Schwartzman, policy director for the Media Access Project, a consumer advocacy group, filed a petition with the agency this week arguing that it should force political groups to disclose information about their top donors when they run political ads.

In fact, Schwartzman asserts, the FCC has had the power to do so for decades.

Under current regulations, some of which date to the 1940s, the FCC requires disclosure only for the group claiming responsibility for the ad, no matter how the group paid for it.

But Schwartzman says the Communications Act of 1934 and subsequent legislation calls for a much broader standard: disclosure of those actually paying for the message.

The petition asks that the FCC revise its rules to require groups to disclose financial backers who contribute more than 10 percent of the groups’ budget, in public documents filed with broadcast stations.

The proposal would also require on-air disclosures for donors who provide more than a quarter of a television commercial’s budget or more than a third of the cost of a radio commercial.

“The statutory objective of informing the electorate about who is the ‘true’ sponsor of political messages is not being met,” Schwartzman wrote in the media project’s petition. He added: “Existing campaign finance and IRS regulations allow organizations which are often hollow shells for one or a few organizations or individuals to purchase commercials without identifying the source of their funding.”

The petition is the latest volley in the ongoing battle over campaign finance regulations following last year’s decision in Citizens United v. Federal Election Commission , which allows corporations and unions to spend unlimited amounts on elections. The White House and congressional Democrats responded with legislation that would impose greater disclosure requirements, but Senate Republicans blocked the measure.

Needless to say, many conservatives don’t like the idea of forcing more disclosure through FCC regulations, either. The Center for Competitive Politics, which has supported the Citizens United case and other challenges to federal campaign-finance law, said the proposal was an attempt to impose “onerous” political restrictions through the “back door” at the FCC.

“The rule is completely unworkable and would provide voters with clutter at best and misinformation at worst,” said Allison Hayward, the group’s vice president of policy. “The FCC should reject this proposal for junk disclosure.”

Although the courts and Congress have not been kind to campaign finance rules lately, the FCC may be more promising for pro-regulation groups. The commission is split 3 to 2 in favor of Democrats, including Chairman Julius Genachowski, who has close ties to President Obama.

The other two Democratic commissioners, Mignon Clyburn and Michael J. Copps, signaled support for the idea this week. Copps said the FCC should “exercise the authority I believe it already possesses to require full and complete disclosure of political ad sponsorship.”

“The law of the land issued in the Citizens United decision by the U.S. Supreme Court allows unions and corporations to buy political advertisements, but it does not mean that citizens should be left in the dark as to who is making an argument to voters,” he said.

A swipe at fee limits

A roiling Capitol Hill debate over debit-card fees has attracted input from banks, credit unions, retailers, mom and pop stores, universities and a host of other players.

Now we can add teachers to the mix.

The National Education Association — the influential teachers’ union — sent a letter to House and Senate leaders this week urging a delay in implementing limits on “swipe fees” for debit cards that were enacted as part of last year’s financial regulatory overhaul.

“We believe that this amendment, while well-intentioned, could have a significant negative impact on the cost of mainstream banking services to middle and lower-income consumers, including teachers and education support professionals, because of the benefits currently made possible by debit cards,” the NEA said in its letter.

The NEA, which offers its members branded credit cards, joins major banks and credit unions in opposing the limits, arguing that they will force financial institutions to swallow losses or pass costs on to consumers.

But proponents of swipe-fee limits, including major consumer advocacy groups and mega-retailers such as Wal-Mart, say large banks and credit-card companies were gouging merchants with arcane and hidden fees. Other major unions and education groups have come out in favor of the limits.

The main focus of opponents now is an attempt to head off the Federal Reserve, which has proposed limiting the debit swipe fee to 12 cents, which is about 70 percent lower than the average fee on such transactions last year. Congress is considering bills that would halt implementation of the limits to study the issue further.

Deputy editor, National politics
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