With Congress' legislative response to the Supreme Court's January Citizens United decision due to be introduced this week, new documents obtained by Politics from a Democratic congressional office show both what's in the bill and how Democrats are going to try and sell it.
The documents, which include a summary of the bill and Democratic talking points, show that the legislation will focus on disclosure and disclaimers. This was the legal area that most a scholars agreed would be the target of a legislative response since the Supreme Court's decision on constitutional grounds closed the door on a broader bill.
Democrats will continue to paint the Citizens United decision as a veritable hijacking of American Democracy. According to the talking points, the ruling "amounts to a takeover of our democracy and elections by powerful special interests." "Big money interests" will "undoubtedly drown out the voices of average Americans" and "undermine[…] our electoral process and democracy."
Capitol Hill sources say the legislation, the "Democracy is Strengthened by Casting Light on Spending and Elections Act" (yes, that's a mouthful) or DISCLOSE act will be introduced in the middle of this week. So far, Democrats have lined up one Republican cosponsor, Rep. Mike Castle (Del.), to join the legislation’s author Rep. Chris Van Hollen (D-Md.). The Democrats, however, are seeking to sell the bill as non-partisan. (It remains to be seen whether Sen. Charles Schumer (D-N.Y.) who drafted the Senate version can come up with a Republican co-sponsor.)
The legislation itself is quite similar to the bullet points Schumer and Van Hollen said they wanted to include in the bill months ago. First, it seeks to increase transparency and disclosure. The head of a corporation, union, 501(c) (4), (5) or (6) that airs a campaign ad would have to appear saying he or she "approves this message," as candidates are required to do with their ads. Additionally – and this is new – the top five contributors to an organization would be listed on screen in an ad. This is intended to avoid the creation of "sham organizations" and "dummy corporations."
The bill would also seek to bolster disclosure rules. An organization would have to disclose any campaign related activity or contributions to an organization engaged in such activity to the FEC within 24 hours. A corporation would also be required to disclose such spending to its shareholders.
Here's a tricky part: These types of organizations would have options when it comes to disclosing its contributors. The bill would require it to either disclose all donations of $1,000 or more or set up a "Campaign-Related Activity" account and disclose only donors who have given to that account in increments of $1,000 or more. If the organization transfers $10,000 or more from its general fund into that political account, it would have to disclose all donors in excess of that $10,000.
This would allow organizations to "wall-off" donations – meaning not disclose who gave the money – if the contributor says the organization cannot use his/her donation for political purposes. This could create a large loophole. After the 2007 FEC V. Wisconsin Right to Life decision that opened the airwaves to issue ads, the FEC required corporations airing issue ads to disclose where the money came from if – and only if – it was contributed with the express purpose of airing political ads. In this legislation, the language of how a contribution becomes "walled off" would be pivotal because it could allow groups like the U.S. Chamber of Commerce to raise large amounts of money for political purposes but characterize them on their balance sheets as an increase in dues.
The bill also focuses on preventing foreign corporations – or U.S. corporations controlled by foreign interests – from spending money on U.S. elections. And third, the bill would prohibit corporations that received government bailout funds from spending money on campaign related activity.
Jeremy P. Jacobs is the staff writer at Politics. You can reach him at jjacobs@politicsmagazine or follow him on Twitter @jeremypjacobs