Democrats plan to introduce bill to blunt ruling on political spending

By Dan Eggen
Washington Post staff writer
Friday, April 23, 2010

Democrats plan to introduce legislation next week that would sharply limit the ability of foreign-connected companies to participate in U.S. politics and require greater transparency from corporations, unions and nonprofit groups that pay for political advertising, according to a confidential summary of the bill.

The proposal, spearheaded by Rep. Chris Van Hollen (D-Md.) and Sen. Charles E. Schumer (D-N.Y.), is aimed at blunting the effect of a Supreme Court ruling in January that permits companies and unions to spend unlimited amounts of money for or against political candidates. President Obama has sharply attacked the ruling, and many Democrats fear it will unleash a flood of corporate spending that is likely to favor Republicans.

According to the summary, obtained by The Washington Post, the legislation would require corporate chief executives or group leaders to publicly attach their names to ads, much like political candidates are required to do. It would also mandate disclosure of major donors whose money is used for "campaign-related activity."

The latter measure would require powerful trade groups such as the U.S. Chamber of Commerce for the first time to identify the companies that fund its political-related spending.

The measure would also tighten political restrictions on foreign-based corporations, which would be defined as any company that has 20 percent foreign voting shares, a majority of foreign directors or a foreign national leading U.S. operations. If enacted into law, that provision could affect a significant number of familiar companies, including Budweiser, T-Mobile and Research in Motion.

Other provisions would mandate public disclosure of political spending and would bar companies that receive federal contracts worth more than $50,000 from spending money to influence federal elections, the summary says.

Even before the legislation's formal introduction, Republicans and corporate groups have criticized its ideas as excessive and aimed at discouraging organizations from exercising their First Amendment rights.

Nancy McLernon, president of the Organization for International Investment, which represents U.S. subsidiaries of foreign-based firms, said the legislation ignores the rights of U.S. citizens who work for companies based overseas.

"These firms are incorporated in the U.S. with the same rights and obligations as any U.S. company," McLernon said. "If other initiatives follow this bill's lead, it would have a detrimental impact on the ability for these companies to do business in the U.S. and support jobs here."

But Democratic leaders are hoping that GOP opposition will soften in light of the public mood against large corporations, and they announced last week that Rep. Michael N. Castle (R-Del.) had agreed to be a co-sponsor of the legislation in the House. The White House has also signaled its intent to make the Supreme Court case a central part of its legislative agenda this year.

"We hope that people on both sides of the aisle can agree that Americans have a right to know who is spending money on elections," according to Democratic talking points attached to the bill summary. "We can't flood our democracy with millions of dollars in political expenditures and then keep people in the dark about who is trying to influence them."

In a 5 to 4 decision, the Supreme Court ruled in Citizens United v. Federal Election Commission that corporations have the same rights as individuals when it comes to political speech and can therefore use their profits to support or oppose individual candidates, as long as they do not do so in direct coordination with campaigns.

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