The Influence Industry: Disclose Act could deter involvement in elections

By T.W. Farnam
Washington Post Staff Writer
Thursday, May 13, 2010

Next week, a House committee is expected to mark up legislation responding to the Supreme Court's decision to loosen restrictions on political spending by corporations. But lawmakers have something else on their minds these days: elections -- and the anti-Washington mood swirling through the country.

If the legislation, called the Disclose Act, lived up to its name, it might be uncontroversial. People across the ideological spectrum tend to say that forcing corporations and others to disclose their contributions is a good response to the pernicious influence of money on politics.

In the landmark Citizens United v. Federal Election Commission case, eight members of the Supreme Court agreed on the need to maintain disclosure of corporate spending. Last week, during oral arguments on another case, some justices seemed skeptical of a request to keep signatures supporting a ballot initiative from the public. Even one of the court's most conservative members, Justice Antonin Scalia, said that "running a democracy requires a certain amount of civic courage."

One of the most ardent opponents of campaign finance regulation, Senate Minority Leader Mitch McConnell (R-Ky.), once praised disclosure as an alternative to regulation. During the last major fight over regulating money in politics, he asked, "Why would a little disclosure be better than a lot of disclosure?"

The problem is that the bill in Congress goes beyond disclosure, and even its authors say that it could, in practice, limit the involvement of corporations and unions in elections. "The deterrent effect should not be underestimated," Sen. Charles E. Schumer (D-N.Y.) said in unveiling the bill.

Many have said that the problem with campaign finance laws is that the people writing them have a distinct interest at stake in campaigns: their own jobs. This year, there is extra reason for them to worry, with incumbents in Utah and West Virginia losing early battles and others at risk next week.

The legislation is co-sponsored by Rep. Chris Van Hollen (Md.), chairman of the Democratic Congressional Campaign Committee, and Schumer, a former two-time chairman of the Democratic Senatorial Campaign Committee. The House Administration Committee is expected to mark up the legislation next week, but prospects for the bill, which has only nominal Republican support, are uncertain.

The bill would increase disclosure requirements by expanding the window before an election during which outside groups are subject to regulation of their ads. It also would require more information from donors so that "shadow corporations" couldn't be used to mask the true source of money.

The bill would also create a number of expensive barriers for corporations, unions and other outside groups. It includes a "stand by your ad" provision that would require the chief executive and the top donor to the group to include in an ad their names and titles -- in some circumstances, twice or three times -- and to appear in the ad stating their approval. Opponents of regulation say the disclaimers could take up to half of a 30-second spot.

The bill would require groups putting ads on the air to include a database of spending on their Web sites, an expense that could deter smaller groups. The same information is reported to the government and is available to the public.

Other provisions of the bill go beyond disclosure. Many corporations with foreign ownership would be banned from running ads, along with companies that received federal bailout money and those with government contracts of more than $50,000.

The bill would become effective 30 days after enactment, and sponsors hope it would change rules for the midterm elections in November. That would allow little time for the FEC to write regulations. The commission hasn't finished rewriting regulations required by the McCain-Feingold law, eight years after it was signed into law.

"All Americans should feel a very great sense of urgency about this," said Meredith McGehee, policy director at the Campaign Legal Center, which supports the bill. "It's a real threat if this bill does not get signed into law."

The effect will be great uncertainty about the law ahead of the election, however, and corporations that are often risk-averse when it comes to politics will probably stay on the sidelines -- which detractors say is precisely the point.

The bill also has provisions that would bolster the role of national political parties in elections. One little-noted section essentially would remove the limit on the amount of money that parties can spend in conjunction with candidates. Another part of the bill would extend to the parties a benefit now enjoyed only by candidates, the right to buy advertising at the lowest rates offered by broadcasters.

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