Super PAC Disclosure Reports Reveal Out-of-Control and Corrupt System: New Disclosure Legislation Needs to Provide Timely Disclosure

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Democracy 21 Preparing Legislative Proposal to End Super PACs Like Ones Being Used in 2012 Presidential Campaign

    Statement of Democracy 21 President Fred Wertheimer

The Super PAC disclosure reports being filed this week reveal an out-of-control and corrupt system that is doing enormous damage to our political system and to our democracy.

A relatively few super rich individuals and a number of corporations are making huge unlimited contributions to the Super PACs and are exercising magnified and undue influence in the 2012 presidential primaries.

These huge donors are also buying corrupting influence over the presidential candidates they are supporting and over government decisions in the event their candidate wins.

All of this is the result of the disastrous, misguided decision by the Supreme Court in the Citizens United case, along with a lower court decision in the SpeechNow case.

Congress needs to act this year to address the problems with Super PACs within the boundaries available under court decisions.

Congress needs to pass legislation that provides new disclosure requirements to ensure that secret donors financing campaign expenditures are disclosed and to solve the problem of untimely disclosure by Super PACs that has arisen in the 2012 presidential elections.

The Super PAC disclosures filed yesterday are already too late to provide voters in four key presidential nominating races with information they have a basic right to know. These reports, furthermore, show donors only through the end of December 2011, and do not show the donors who gave money in January during the presidential caucus and primaries last month. This information will not be reported until later in February.

According to published reports, at least one Super PAC, Priorities USA Action, received a contribution of more than $215,000 from Priorities USA, its affiliated 501(c)(4) tax-exempt group.  Priorities USA Action is a candidate-specific Super PAC supporting President Obama’s re-election. Priorities USA also is supporting President Obama’s re-election.

Since 501(c)(4) groups do not have to report their donors, this amounts to a money-laundering scheme to hide the true sources of the money going to the Super PAC supporting President Obama, which is supposed to disclose its actual donors.

This too-little-too-late Super PAC reporting system must be fixed by new disclosure legislation.

The new legislation also needs to require corporations, including nonprofit tax-exempt groups, labor unions and Super PACs to have an official representative appear in their TV ads to take responsibility for the ads and to require the groups to list their top five donors in these TV ads.

The legislative effort in 2012 needs to focus on disclosure provisions only and not include the non-disclosure provisions that were part of the DISCLOSE Act in 2010.

It is essential for the legislative effort in 2012 to focus solely on the issue of “disclosure versus secrecy” in order to be a real effort and not merely a political exercise, and in order to build the support necessary to ultimately win this battle.

Democracy 21 is also preparing a legislative proposal to shut down the kind of candidate-specific Super PACs that are functioning for the first time in the 2012 presidential election.

The legislation would treat these candidate-specific Super PACs in legal terms as arms of the presidential campaigns, as they are in reality. The legislation would treat a candidate-specific Super PAC run by associates of the candidate as affiliated with the candidate’s campaign and subject to the candidate’s contribution limits.

It is important to recognize that the Super PAC problem cannot be solved by repealing the limits on contributions to candidates. Taking that destructive step would return us to historic campaign finance scandals of the past and a system of pure legalized corruption where donors could provide huge contributions directly to officeholders and candidates in exchange for their votes.

This would create nothing less than a system of legalized bribery of our elected representatives.