Spurious Arguments Being Made Against H.R. 1 to Defend Secret “Dark Money” Contributions Spent to Influence Federal Elections
Enclosed for your information is a piece refuting spurious arguments being made by opponents of H.R. 1 to defend secret contributions. According to the piece:
Secret, unlimited contributions made to groups which spend money to influence federal elections are a particularly dangerous means for corrupting government decisions. Without disclosure of these unlimited contributions, there is no way for the public to hold big money donors and a President or Members of Congress accountable for the corrupting influence these contributions may exert on decisions made by the President or the Members. […]
Despite the Supreme Court’s longstanding support for the constitutionality of campaign finance disclosure laws, Senate Majority Leader McConnell is making the same spurious arguments against the disclosure provisions in H.R. 1 that have already been rejected by the Supreme Court.
Read the full piece below.
Spurious Arguments Being Made Against H.R. 1 to Defend Secret “Dark Money” Contributions Spent to Influence Federal Elections
Fred Wertheimer, Democracy 21 President and Don Simon, Democracy 21 Counsel
H.R. 1, comprehensive democracy reform legislation sponsored by Rep. John Sarbanes (D-MD) and expected to be considered soon by the House, incorporates the provisions of the DISCLOSE Act, sponsored by Senator Sheldon Whitehouse (D-RI) and Representative David Cicilline (D-RI).The DISCLOSE Act provisions close gaping disclosure loopholes by which wealthy donors and special interests have given a total of more than $800 million in the last four elections, in undisclosed, unlimited contributions to nonprofit groups that spent the secret contributions to influence federal elections.
Under the disclosure provisions of the Act, groups that spend more than $10,000 in a year on campaign-related ads are required to disclose to the FEC their campaign expenditures of $1,000 or more and their donors of $10,000 or more whose contributions paid for the expenditures. The approach is modeled after the disclosure provisions for electioneering communications in the Bipartisan Campaign Reform Act of 2002 (BCRA), which were upheld as constitutional by the Supreme Court in McConnell v. FEC (2003).
The legislation includes provisions to ensure that the true sources of the money used to pay for campaign-related ads cannot be hidden by transferring the money through conduits, intermediaries or front groups in order to hide the true sources of the funding.
Secret, unlimited contributions made to groups which spend money to influence federal elections are a particularly dangerous means for corrupting government decisions. Without disclosure of these unlimited contributions, there is no way for the public to hold big money donors and a President or Members of Congress accountable for the corrupting influence these contributions may exert on decisions made by the President or the Members.
Supreme Court and the Constitutionality of Campaign Finance Disclosure Laws
For more than four decades, the Supreme Court has consistently upheld the constitutionality of laws that require the disclosure of campaign-related contributions and expenditures.
In 1976, the Supreme Court in Buckley v. Valeo 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 Court said disclosure is also justified to provide “the electorate with information ‘as to where political campaign money comes from and how it is spent by the candidate’ in order to aid the voters in evaluating those who seek federal office.”
More than three decades later in 2010, the Supreme Court in Citizens United v. FEC reaffirmed by an 8 to 1 vote the constitutionality of federal disclosure laws, upholding requirements for outside groups to disclose their spending on “electioneering communications” and the donors funding the expenditures. “Electioneering communications” are ads that refer to a candidate close to an election but do not contain express advocacy.
The Supreme Court said in Citizens United that disclosure laws 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 Court noted that it had previously upheld disclosure laws to address the problem that “independent groups were running election-related advertisements while hiding behind dubious and misleading names.”
The Court in Citizens United also explicitly rejected the argument that disclosure requirements can constitutionally apply only to ads which contain express advocacy, citing the McConnell case, which previously had upheld disclosure requirements for electioneering communications.
FEC interpretations of existing laws, however, have resulted in almost no disclosure of the donations paying for campaign-related expenditures by nonprofit groups. The DISCLOSE Act provisions solve this problem.
Spurious Arguments Made Against Disclosure by Senate Majority Leader McConnell
Despite the Supreme Court’s longstanding support for the constitutionality of campaign finance disclosure laws, Senate Majority Leader McConnell is making the same spurious arguments against the disclosure provisions in H.R. 1 that have already been rejected by the Supreme Court.
Senator McConnell not only opposes disclosure of secret contributions to outside spending groups on fallacious grounds, he also makes use of these contributions for his political purposes.
According to a USA Today article published on July 18, 2018, “One Nation, the best-financed group in the McConnell orbit, plans to spend $16 million in August in five Senate contests crucial to Republicans.” One Nation is a section 501(c)(4) nonprofit group that finances its campaign-related activities with secret contributions.
Senator McConnell recently attacked the H.R. 1 disclosure provisions in an op-ed, stating:
Apparently the Democrats define “democracy” as giving Washington a clearer view of whom to intimidate and leaving citizens more vulnerable to public harassment over private views. Under this bill, you’d keep your right to free association as long as your private associations were broadcast to everyone. You’d keep your right to speak freely so long as you notified a distant bureaucracy likely run by the same people you criticized.
However, in Buckley (1976), McConnell (2003) and Citizens United (2010), the Supreme Court rejected these arguments as legitimate grounds for declaring disclosure laws unconstitutional.
The Court stated in Citizens United, for example, that disclosure laws “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 therefore 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 has left a narrow safety valve to invalidate disclosure requirements in specific cases where a group can show a “reasonable probability” that disclosing its contributors’ names would “subject them to threats, harassment, or reprisals from either Government officials or private parties.”
In these circumstances, the disclosure requirements could be held unconstitutional, but only for the specific group involved based on the specific showing of harm to that group. The disclosure laws would otherwise remain constitutional.
Senator McConnell has also argued that under the disclosure provisions in H.R. 1:
Many more Americans would have to notify the feds when spending even small amounts of money on speech or else be penalized.
This is false.
The disclosure requirements in H.R. 1 apply only to organizations. They do not apply to individuals. “Americans” would not have to file reports and would not be subject to penalties under the disclosure provisions. Furthermore, organizations would only disclose donors who have given them $10,000 or more. They would not disclose donors who provide “small amounts of money” to the organizations.
Spurious Arguments Made Against Disclosure by Americans for Prosperity
Americans for Prosperity is described as a political advocacy group created and funded by the Koch brothers. The organization is a section 501(c)(4) nonprofit group that spends secret contributions to influence federal elections.
In a recent letter to House members, Americans for Prosperity urged Representatives to oppose H.R. 1 stating that the bill “creates unconstitutional restrictions on political speech.” The letter further said, “The free speech regulations in H.R. 1 would make it more difficult than ever for people to make their voices heard and hold their elected leaders accountable.”
The Supreme Court in Citizens United, however, rejected this line of argument in upholding the constitutionality of disclosure provisions similar to the disclosure provisions in H.R. 1. As noted earlier, the Court in Citizens United stated that disclosure laws “do not prevent anyone from speaking.”
The Court further stated:
With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are “‘in the pocket’ of so-called moneyed interests.”
Spurious Arguments Made Against Disclosure by FreedomWorks
FreedomWorks President Adam Brandon in an op-ed argues that H.R. 1 would require section 501(c)(4) nonprofit groups to disclose their donor lists and that the Supreme Court decision in NAACP v. Alabama (1958) protecting the group’s membership lists from disclosure applies to the campaign finance disclosure requirements in H.R. 1.
Mr. Brandon is wrong on both counts. He writes in the op-ed:
House Democrats should brush up on their history if they believe exposing the names of donors will lead to free elections. It would do the opposite. This was already decided in NAACP v. Alabama, in which the Supreme Court ruled the state of Alabama could not make public the membership rolls of the NAACP.
It is Mr. Brandon who needs to brush up on his history.
As noted earlier, the Supreme Court has repeatedly upheld the constitutionality of disclosure laws that cover contributions and expenditures for campaign-related activities, including disclosure laws similar to the provisions in H.R. 1.
Furthermore, H.R. 1 does not require nonprofit groups to disclose their membership lists as Mr. Brandon claims. The only members of an organization making campaign-related expenditures whose names would have to be disclosed under H.R. 1 are individuals who contribute $10,000 or more to the organization. This 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 contributions will not be used for campaign-related activities.
Finally, the organization can set up a separate account from which it makes all its campaign-related expenditures. If it does so, it has to disclose only the donors of $10,000 or more to that account, not to its general treasury.
The Supreme Court ruled in NAACP v. Alabama that the compelled disclosure of the NAACP’s membership list was unconstitutional. Mr. Brandon makes the fallacious argument that the NAACP holding applies to the campaign finance disclosure requirements in H.R. 1.
The Supreme Court in Buckley, however, explicitly distinguished Buckley from its earlier NAACP decision. 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 again said in McConnell, “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.”
As noted above, the Supreme Court has said that campaign-related disclosure requirements are constitutional except in the case where a specific showing is made by a group of “a reasonable probability that the group’s members could face threats, harassment, or reprisals if their names were disclosed.” Such a specific showing was not made by any group in Buckley, McConnell or Citizens United, each of which upheld campaign-related disclosure laws as constitutional.
It is important to understand, furthermore, that even if a specific showing can be made by a specific group that its members face the “reasonable probability” of “threats, harassment or reprisals,” it is only that specific group that is constitutionally exempt from the disclosure requirements. The campaign finance disclosure laws remain constitutional and in effect for other organizations.
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