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Schumer and Van Hollen Embrace Transparency Measures to Combat Citizens United

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The Supreme Court’s decision in Citizens United v. FEC opened the door to a torrent of new political spending that, with the legislative framework they announced today, Senator Schumer and Representative Van Hollen are trying to stem. Sunlight released its own “legislative framework” in response to Citizens United some weeks ago, and we are pleased that many of our disclosure-related recommendations appear to have been embraced by Sen. Schumer and Rep. Van Hollen.

The “stand by your ad” provisions that will require corporate CEOs to approve of the ads they run in the same way candidates do is clearly necessary to increase accountability. The disclaimers on ads run by shell organizations should also shine some light on the generally shadowy practices of many of these groups and is welcome and vitally important in light of Citizens United.

Disclaimers on ads run by third party groups, however, only get part of the way to full transparency. To be meaningful, disclaimers must be coupled with real disclosure of who is funding the ads. The Schumer/Van Hollen framework addresses this concern with the new reporting of “political broadcast spending” for all corporations, labor unions, nonprofits and 527s. Disclosures outlined seem to cover most of the relevant bases including who controls the political broadcast spending account, the name of donors to the account, and amounts and purposes of expenditures from the account.

We would respectfully offer two words of advice to the legislative drafters as they flesh out these provisions. First, the framework released today does not specify the how or when these disclosures must be made. To be effective, the legislation must provide that disclosures be electronically filed and publicly available online within 24 hours. It’s too easy to game the system and hide expenditures from public view if there is not a hard and fast requirement for real-time online disclosure. Second, the framework suggests reliance on the FEC to make the information publicly available. If the FEC’s cumbersome, clunky, complicated campaign finance disclosures are any indication, the FEC needs a clear mandate to make sure its new disclosures of political broadcast spending are searchable, sortable, and meaningful to the general public.

Sunlight strongly supports the requirement that political expenditures made by a corporation be disclosed within 24 hours on the corporate Web site. We think the framework shortchanges shareholders, however, by requiring only quarterly reporting. It is, after all, their money being spent – they should be alerted immediately to any political spending on the SEC Web site and through the SEC’s comprehensive disclosure database.

The enhanced disclosures of lobbyists’ campaign expenditures is a good start, though again we would note that to be meaningful, the disclosures must be in real time, online and publicly available and a user-friendly, searchable database. But, in order to address the real threat to the balance of political power that is a result of Citizens United, lobbying disclosure should go much further. As I wrote here, the Citizens United case opened the door to coordination and possible coercion by putting in the hands of corporations, unions and their lobbyists the ability to threaten or imply that if a member of Congress doesn’t support their agenda, he will be faced with a barrage of ads opposing him (or supporting his opponent) in the next election. And, while the Schumer/Van Hollen framework rightly strengthens the ban on coordination to prevent such anti-democratic behavior, without a new disclosure requirement mandating that lobbyists report who they met with, there is no effective way to discern the possibility that such coordination took place.

We hope that when the legislation comes to the House or Senate floor, someone will offer an amendment that requires that within 24 hours of a lobbying contact, lobbyists be required to electronically report the name of the official being lobbied, a summary of the action requested, and the name of the lobbyist’s client or employer. (We’d also like to see the 20 percent exemption for lobbyist reporting eliminated so that all corporate and union heads along with anyone who bundles campaign contributions be required to report their meetings with government officials.) This is a vital way to demonstrate that the new expenditures now permitted because of Citizens United are truly independent.

A “legislative framework” is, of course, just the beginning. As the Members of Congress draft the actual legislation, we hope our suggestions will be incorporated so that the strongest possible disclosures will be in place to help shine a light on who is funding our elections.