Rebuttal of Attacks on Dark Money Disclosure Requirements in H.R. 1

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Rebuttal of Attacks on Dark Money Disclosure Requirements in H.R. 1

Democracy 21 President Fred Wertheimer

Democracy 21 Counsel Donald Simon

Enclosed below is a rebuttal of attacks made on the disclosure requirements included in H.R. 1, landmark democracy reform legislation scheduled to be voted on this week in the House.

  • The DISCLOSE Act, incorporated into H.R. 1, closes gaping disclosure loopholes through which in the last four elections wealthy donors and special interests gave $1 billion in secret, unlimited contributions to nonprofit groups that spent the money to influence federal elections.
    • Unlimited, secret contributions are the most dangerous money in American politics because there is no way to hold the donor and officeholder accountable for corrupt activities.
  • The Supreme Court in Buckley v. Valeo (1976) held that disclosure requirements are constitutional to “deter actual corruption and avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity.”
  • The Supreme Court in Citizens United (2010) by an 8 to 1 vote upheld the disclosure provisions in the campaign finance law, stating that they serve the important governmental interest of “providing the electorate with information about the sources of election-related spending” in order to help citizens “make informed choices in the political marketplace.” The case involved disclosure requirements for a section 501 (c)(4) nonprofit group.
  • The Act applies to ads that (1) contain express advocacy or (2) refer to a candidate close to an election (“electioneering communications”) or (3) promote, attack, support or oppose (PASO) the election of a candidate. The disclosure requirements in H.R. 1 require disclosure reports to be filed only by organizations, not by individuals.
  • The Court in Citizens United said, “we reject Citizens United’s contention that the disclosure requirements must be limited to speech that is the functional equivalent of express advocacy.” The Court upheld the disclosure requirements for electioneering communications ads that do not contain express advocacy but instead only refer to a candidate and are run close to an election.
  • The Supreme Court in the McConnell case (2003) upheld the constitutionally of the PASO test for determining campaign-related ads. The Court stated that the words used in the PASO test – promote, attack, support, oppose – are not unconstitutionally vague because they “‘provide explicit standards for those who apply them’ and ‘give the person of ordinary intelligence a reasonable opportunity to know what is prohibited.’”
  • In Doe v. Reed (2010), a Supreme Court case that upheld disclosure requirements for petition signers of ballot measures, Justice Scalia wrote, “Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed.”
  • Opponents of the DISCLOSE Act argue that the Act “chills speech” or “intimidates speakers” or subjects speakers to “public harassment” or creates “unconstitutional restrictions on political speech.” But the Supreme Court in Citizens United rejected these arguments in upholding disclosure requirements for nonprofit groups and other outside spenders:
    • Quoting what it had said in the Buckley and McConnell decisions, the Court in Citizens United said that disclosure requirements “impose no ceiling on campaign related activities,” and “do not prevent anyone from speaking.”
    • The Court further said, “The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” [Almost all nonprofit groups are incorporated and are corporations for purposes of the Citizens United decision.]
  • The Court has also made clear that disclosure requirements are not invalid because of a theoretical concern about “public harassment.” The Court said it will invalidate disclosure requirements only in specific cases where a group can show a “reasonable probability” that disclosing the names of its contributors would “subject them to threats, harassment, or reprisals from either Government officials or private parties.”
    • Even if there is such a specific showing of a specific threat, the disclosure requirements would be held unconstitutional only for the specific group involved based on the specific showing of harm to that group. The disclosure laws would otherwise remain constitutional.
  • Opponents argue that the Act would unconstitutionally require organizations to disclose their membership lists, citing the NAACP case. This is plainly wrong. The Act doesn’t require any organization to disclose its membership list. If an organization makes campaign-related expenditures, the only members whose names would have to be disclosed are individuals who contribute $10,000 or more to the organization. This high disclosure threshold will exclude the vast majority of members of most organizations.
    • Further, even donors who give $10,000 or more to an organization can easily remain undisclosed simply by reaching an agreement with the organization that their donations will not be used for campaign-related activities. And finally, if an organization exercises its option to set up a separate account that it uses to make its campaign-related expenditures, the organization has to disclose only the donors to that account and no other persons.
  • The Supreme Court ruled in NAACP v. Alabama (1958) that the compelled disclosure of the NAACP’s membership list was unconstitutional. The Supreme Court in Buckley explicitly distinguished the relevance of the NAACP decision and said it did not apply to the campaign finance disclosure requirements there.
    • The Court said in Buckley that “the record here does not reflect the kind of focused and insistent harassment of contributors and members that existed in the NAACP cases.” Nearly three decades later, the Supreme Court made the same point in its McConnell decision, saying, “In Buckley, unlike NAACP, we found no evidence that any party had been exposed to economic reprisals or physical threats as a result of the compelled disclosure.” The Court did not strike down the campaign finance disclosure requirements based on the NAACP case.

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