Corporate money in politics

Sunday, May 9, 2010

THE SUPREME COURT'S ruling in the Citizens United campaign finance case opened a dangerous pathway for corporations to spend money in direct support of -- or in opposition to -- candidates for federal office. Under the decision, corporations -- and labor unions -- still can't give money directly to federal candidates, but they can spend unlimited sums in independent expenditures for or against them. Even more dangerous, because of preexisting gaps in campaign disclosure laws, the money can be spent, in effect, anonymously. The entity spending the money -- say, Americans for Really Good Government (ARGG) -- would have to register with the Federal Election Commission and report its activities, but ARGG would not have to disclose its donors. So Corporation A or Labor Union B could give unlimited sums to ARGG to run ads going after Candidate C -- and the public would have no clue. This troubling situation should be fixed in time for the next election.

Congressional Democrats, joined by two brave House Republicans -- Michael N. Castle (Del.) and Walter B. Jones (N.C.) -- introduced measures to blunt the impact of the Citizens United ruling. The legislation, crafted by Sen. Charles E. Schumer (D-N.Y.) and Rep. Chris Van Hollen (D-Md.), addresses the Citizens United ruling in two ways: first, by imposing limits on the kind of corporations that are allowed to try to influence elections, and second, by expanding disclosure rules. We have some concerns about the first part of the effort but enthusiastically support the second.

One piece of the legislation would prohibit companies that do business with the federal government from making campaign expenditures. This so-called "pay-to-play" provision goes too far; any company with a government contract or sales worth more than $50,000 would be barred from such spending. We would prefer a world in which no corporation or labor union could spend money advocating the election or defeat of federal candidates, but that is not the world that the Supreme Court has said is constitutionally permitted. However, it makes sense to protect against influence by foreign corporations. The measure would do that by prohibiting even U.S.-based corporations from making campaign expenditures if foreign ownership exceeds 20 percent or if "one or more foreign nationals have the power to control the decision-making process of the company" in its U.S. operations.

The most important provision, however, is disclosure. Here, the proposal would go beyond addressing the particular problems created by the Citizens United ruling and improve on existing law. It would require disclosure of the underlying donors in independent expenditures and broaden disclosure requirements for what are termed "electioneering communications" -- broadcast ads that mention particular candidates but do not advocate their election or defeat.

The Senate version of the bill would require disclosure of donors if the advertising mentioning the candidate is run at any time from 90 days before the primary through the general Election Day; in addition, groups such as trade associations, which are now exempt from reporting donors, would be covered. (The House time frame is shorter.) There are legitimate free-speech concerns involved, but the proposal addresses those by letting donors keep their identities private if they specify that their money is not to be used for campaign spending; organizations can further protect donors' identities by establishing a separate "campaign-related activities account" and only reporting the identities of donors to that fund. This strikes an eminently reasonable balance.

Corporate money in politics is bad enough. Secret corporate money is intolerable.

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