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Stay up to date on Sunlight’s work in D.C., throughout the country and around the world, as well as the latest open government, transparency and technology news.

States Not Waiting for Congress to Act on Disclosure of Dark Money

This week, New York Attorney General Eric Schneiderman adopted bold new disclosure rules to shine a light on dark money spent on elections in New York. Effective immediately, groups that spend $10,000 or more on state and local electioneering will have to publicly disclose their contributions and expenditures on the New York Open Government website. Nonprofits registered with the state will also be required to report the percentage of their expenditures that go to federal, state and local electioneering.

Last week in California, the Senate passed a version of the DISCLOSE Act. If enacted, the bill would require disclosure of donors to outside groups that run political ads. 


And in Montana, Republican lawmakers this week unveiled a proposal for a ballot measure that would require any entities that spend money to influence campaigns in the state to make public information about their financial supporters.

Unlimited secret money has been fueling our elections to an ever-greater extent since 2010, when the Supreme Court decided in the Citizens United case that corporate money could be used to influence elections so long the spending is “independent” of candidates’ campaigns. The Court relied on the mistaken assumption that in the Internet era, such spending would be transparent, noting, “prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions.” What the Court failed to take into account was Congress’ inability to pass laws that would ensure the public had the spending information needed to hold “corporations and elected officials accountable.” Instead, at least $300 million in dark money was spent during the 2012 election cycle, while Congress continues to sputter along in its effort to create a disclosure regime.

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Calls for Reform of IRS Rules Face Resistance from Dark Money Advocates

Eight groups, including the Sunlight Foundation, sent letters to the House and Senate, urging Members of Congress to adopt legislation closing down the loophole that allows so-called social welfare organizations to engage in political activities. The murky law was at the root of the controversies surrounding the IRS’s improper targeting of certain groups’ applications for 501(c)(4) status.

At congressional hearings this week, many members of the Senate Finance Committee and House Oversight and Government Reform Committee raised the issue of fixing the broken IRS rules that allow social welfare organizations to engage in substantial electioneering activities. Many noted that engaging in campaign activities is explicitly contrary to the law that says such organizations must engage “exclusively” in social welfare activities. Campaign activities are not “social welfare” activities.

If it results in a clarification of the law, the IRS debacle will have a silver lining. But there is still a great deal of resistance to efforts that would ensure that groups that engage in political activities disclose their donors. Chairman Issa of the House Oversight and Government Reform Committee rejected the idea that it was appropriate for his committee to address the question of any possible fixes—begging the question: what happened to the “reform” part of his committee? And in the Washington Post today, Senator Mitch McConnell uses the IRS case as a twisted justification to endorse dark money in our elections. His sanctimonious criticism of transparency measures ignores Supreme Court precedent as well as decades of support (including his own) for disclosure as a narrowly tailored method to address political corruption.

(It’s also remarkably hypocritical that McConnell would use the 1958 Supreme Court decision in Alabama v. NAACP to justify his position. That case prohibited government mandated disclosure of membership lists--not campaign finance records--when, on balance, threats to the group’s first amendment rights were thought to outweigh the public’s interest in disclosure. McConnell was less than concerned about the NAACP precedent when, under his direction, he repeatedly blocked an electronic filing bill in the Senate by insisting on an amendment that would require membership organizations disclose their members’ names any time a group filed an ethics complaint against a sitting senator. Apparently McConnell has his own balancing test, heavily weighted towards his own interest as opposed to the public interest.)

Narrow changes to tax law would ensure that groups intending to impact our elections disclose their donors, while fully protecting the anonymous speech of organizations that are legitimately engaged in social welfare activities. Clarifying the laws would also decrease the likelihood of future instances of improper targeting by the IRS.

In Washington, After the Oversight Must Come Reform

News that individuals at the IRS improperly targeted certain groups for scrutiny thrust DC’s “House Cleaners” into high gear. Indignant talking points have been drafted, hearings have been announced, and heads will roll. (Already, Acting IRS Commissioner Steve Miller was forced to hand in his resignation).

But what happens after the dust settles and is swept away? In terms of public policy about campaign finance transparency, there could be a silver lining, but only if the outrage is channeled into reform efforts. So far, hearings have been scheduled by Representatives Issa and Cummings of the House Oversight and Government Reform Committee (who would do well not to lose sight of the “reform” mission embedded in the name of the committee) Representatives Camp and Levin of the House Ways and Means Committee, Senators Baucus and Hatch of the Senate Finance Committee, and by Senate Permanent Subcommittee on Investigation’s Levin and McCain—the latter the “maverick” reformer who hasn’t put his name on a significant piece of reform legislation since the Bipartisan Campaign Reform Act of 2002. Each of those Members should acknowledge—during their hearings and beyond—that underlying the IRS actions is the real and dangerous problem of political organizations masquerading as social welfare organizations, impacting elections with hundreds of millions of dollars in dark money expenditures.

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IRS Debacle Shows Need for Clearer, not Fewer Rules

The IRS’s admission that it targeted groups with conservative sounding names for scrutiny will no doubt be held up by some as “proof” that the agency can’t be trusted with determining whether organizations claiming to be “social welfare” organizations are actually political organizations in disguise. In fact, just the opposite is true. The agency needs to apply clear and unequivocally neutral rules to its determinations about whether a group is in fact a 501(c)(4) social welfare organization, entitled to tax exempt status but not required to disclose its donors, or whether it is a political organization, also entitled to tax exempt status but not allowed to keep its donors secret. Using a shortcut, like whether a group had the word “tea party” or “patriot” in its name to aid in making that determination is dead wrong for an agency that must be scrupulously nonpartisan.

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Will Congress Redo what it Undid on Political Intelligence Firm Disclosures?

The Washington Post reported today that the SEC is issuing subpoenas to investigate the possibility that a “political intelligence” firm used congressional sources to gather insider information about health care funding, launching a surge of trading in health companies after the nonpublic information was made available to Height Securities, a stock brokerage firm.

Subpoenas, lengthy investigations and anonymous sources are one way to get to the bottom of whether some lucky investors used insider information from Congress to profit from timely stock trades. But here’s another thought. What if Congress enacted disclosure laws to help enforce rules against insider trading? What if political intelligence professionals were somehow required to publicly disclose their clients and the issues they are working on, the same way registered lobbyists have to publicly disclose information about their work? Seems like such disclosures might help cut to the chase, streamlining investigations and maybe even providing a check on the system to prevent the possibility of insider trading on congressional information in the first place. Too bad no one ever thought of that.

Oh wait. Someone did.

The original incarnation of the STOCK Act mandated disclosures by political intelligence professionals, and, in both the House and the Senate, had enough votes to pass. But even a majority in favor of greater transparency was not enough to save the political intelligence disclosure provisions. Even before their most recent slash and burn attack on the STOCK Act, which gutted the bill’s disclosure provisions, Eric Cantor bowed to pressure from Wall Street and stripped the political intelligence language from the bill before allowing it to come to a vote. Rather than holding firm on its own stronger version of the bill, the Senate simply took up the weaker House version.

And now the SEC is questioning Mark Hayes, a lawyer who served for seven years under Senator Grassley as Health Policy Director and Chief Health Counsel for the Senate Finance Committee. We don’t know the full extent of the relationship between Hayes and Height Securities, or whether Height had multiple sources feeding it information from Congress—mandatory disclosures would probably help clear that up—but an email from Hayes to a Height Security analyst said that a “high-level deal had been made that would provide a benefit to health insurers.” Soon after, the surge in trading on health company stocks began.

It often takes a scandal to convince Congress to act. Perhaps the SEC’s investigation will result in enough outrage that a bill providing disclosure of political intelligence activities can be signed into law.

Anthony Weiner's Transparency in All the Wrong Places

Since resigning from Congress two years ago as a result of some seriously icky tweets, Anthony Weiner has cashed in on his congressional contacts to become another “stealth lobbyist,” earning enough from his corporate clients to move on up to a deluxe Park Avenue Apartment from more humble digs in Queens, all without registering and reporting who he is working for and what he is working on.

Shock and outrage (and some really amusing if not-ready-for-prime-time bits on the Daily Show) accompanied the former representative’s slimy use of social media. But there’s no shock or outrage accompanying his even slimier use of his former position for profit. Indeed, the New York Times seems to think Weiner’s secret lobbying on behalf of corporate clients somehow serves “as a compelling campaign credential” as he considers a run for mayor.

Rather than touting it as a career booster, Weiner’s stealth lobbying should be seen as still more evidence for the need to strengthen current lobbying disclosure laws. The only people in Washington who seem to support secret lobbying are the members of Congress who want to keep that lucrative career path open to themselves when they leave government service. For the rest, closing the 20 percent loophole that allows people like Tom Daschle, Newt Gingrich and now, Anthony Weiner to lobby without registering and reporting makes perfect sense from a transparency and accountability perspective. It is good policy for a junior lobbyist for a nonprofit organization, a mid-level associate for law firm and a named partner in a major lobbying outfit to register and report their lobbying activities. So why aren’t former members of Congress—some of the most powerful influence peddlers inside the Beltway—subject to the same disclosure requirements?

Only a few weeks after Weiner left Congress, he opened up his stealth lobbying shop. But the public became aware of his clients only after they signed waivers, at a time when the former Congressman decided to flaunt his assets (a recurring theme in his life?) declaring himself “a good capitalist.”

His prior “disclosures” on Twitter notwithstanding, Weiner’s most valuable asset may be his easy access to his former congressional colleagues. And although in some respects we have waaay too much information about the former congressman, we don’t know nearly enough about his work as a stealth lobbyist.

Senators Wyden and Murkowski Introduce Dark Money Disclosure Bill

This week, Senators Wyden and Murkowski introduced S. 791, the Follow the Money Act, their bipartisan effort at disclosing money in politics. The bill would require groups spending $10,000 or more on election-related activity to register and disclose contributions above $1,000. The bill would also raise the threshold for contributor disclosure by candidates and political parties from $200 to $1,000.

New ideas and new voices are welcome in the effort to expose dark money in the political process. Congress should be alarmed that shadowy groups spent $1.2 billion on election-related activity in 2012, and a decision about the best way to shed light on the donors behind that money should not be based on a crass political calculation about whether the secret expenditures were worse for the other party. Democrats and Republicans alike should recognize that dark money is bad for democracy—buying access and influence to elected officials, funding negative and misleading ads that turn off voters, and taking the message of a campaign out of the candidates’ control.

Elected officials on both sides of the Capitol should follow the lead of their colleagues who are working towards bipartisan consensus on disclosing dark money.

Oppose Government Waste and Support Government Accountability in a Single Bill

As of midnight last night, candidates for federal office were to have filed their campaign finance disclosure reports with the Federal Election Commission. These reports contain crucial information that lets voters know which special interests, big-money lobbyists or out-of-state donors may be funding a candidate’s campaign. The reports are supposed to be public, but if you try to find Senate candidates’ reports today, you will be out of luck. Why? Because the Senate has exempted itself from filing directly with the FEC, instead using the Secretary of the Senate as an intermediary. And instead of filing their reports electronically, like House candidates and presidential candidates have been doing for years, Senators and Senate candidates mail or hand-deliver paper printouts of their electronically generated reports.

After receiving the reports, the Secretary of the Senate must scan, page by painstaking page, thousands of pages of campaign finance reports before transmitting them to the FEC. It may be days or weeks before the FEC receives the reports—longer for the ones that are mailed rather than hand delivered, as the mailed reports don’t even arrive at the Secretary of the Senate’s office until they have been processed off site.

But wait, there’s more. After it receives the scanned documents, the FEC must then spend about $450,000 in taxpayer dollars and untold hours having the records typed in, line-by-line, to the FEC’s databases. It will take at least three weeks before the information is publicly available—longer in the middle of a busy election season. The process isn’t just inefficient. It denies citizens timely access to information that can help shape and inform their opinions about their candidates and elected officials.

Senator Tester and Cochran have repeatedly introduced legislation to streamline the process and make electronic filing mandatory. This Congress, a bipartisan group of 30 senators have cosponsored S. 375, the Senate Campaign Disclosure Parity Act, with many others voicing support for the measure.

Despite its overwhelming support, the bill has not become law because some in the Senate have chosen to make it a political pawn. That is why we urge every Senator who supports transparency and government efficiency, as well as every one who opposes government waste, to cosponsor the bill. Overwhelming, demonstrated support may be the best chance this common sense piece of legislation to pass.

After TCamp, Become an Advocate for Open Government

The Sunlight Foundation's sister organization, the Sunlight Network, is organizing Citizen Advocacy Day, an exciting opportunity for citizens to let their members of Congress know how important a transparent government is to them. The event will take place May 6, the day after what is shaping up to be an eventful, fun and informative TransparencyCamp.

Citizen advocates will have a chance to talk to key policy staff for their Members of Congress about important transparency issues, like smarter open data through the DATA Act, making sure the Senate keeps up the with the times by mandating electronic filing of campaign finance reports and getting more disclosure about lobbying and the financial interests of members of Congress and their staff.

Sunlight will brief citizen advocates (and feed them breakfast!) the morning of the Advocacy Day to arm them with talking points about key transparency related priorities.

Sunlight advocates on ways to improve transparency of government information but we can’t do it alone. Become a Citizen Advocate and help shine a light on our government.

Epic Failure by the Senate on Transparency Provisions in STOCK Act

With little fanfare and even less disclosure, the Senate late yesterday passed a bill that will, if signed into law, gut the STOCK Act, a transparency measure enacted only a year ago.

The STOCK Act’s history has been one of knee-jerk reactions rather than reasoned decision-making. Yesterday’s vote proved no different, with Senators overreacting and taking a hatchet to the law when a scalpel would do.

The bill enacted last year would require already public financial disclosures of senior congressional and executive branch officials to be put online in order to prevent or root out insider trading. There were concerns that some provisions of the bill were overbroad and would put some government employees at risk. Rather than craft narrow exemptions, or even delay implementation until proper protections could be created, the Senate decided instead to exclude legislative and executive staffers from the online disclosure requirements.

The sweeping exemption goes even farther than critics of the disclosure requirements requested. For those to whom online disclosure would still apply (the president, vice president, members of Congress, congressional candidates and individuals subject to Senate confirmation) the Senate bill made electronic filing of the information optional and struck the requirement that online information be searchable, sortable and downloadable, making even the disclosures that remain in the bill tepid and relatively unusable.

Not only does the change undermine the intent of the original bill to ensure government insiders are not profiting from non-public information (if anyone thinks high level congressional staffers don’t have as much or more insider information than their bosses, they should spend some time on Capitol Hill) but it sets an extraordinarily dangerous precedent suggesting that any risks stem not from information being public but from public information being online.

Are we going to return to the days when the public can use the Internet to research everything except what their government is doing? Will Congress, in its twisted wisdom, decide that information is public if journalists, academics, advocates and citizens are forced to dig through file cabinets in basements in Washington, DC to find it? And does anyone think that makes us safer?

As my colleague Tom Lee noted, “This approach is known as ‘security through obscurity.’ Essentially, the idea is that rather than fixing a system's flaws, you can just make the system opaque or unusable or unpopular enough that those flaws never surface.” It doesn’t make anyone any safer. If a criminal wants the public information badly enough, he will jump through whatever hurdles are created in order to get it. That’s why last October we advocated that Congress take the months remaining before the bill was to go into effect to carve out exceptions for individuals in sensitive jobs. That would actually make them safer than hoping that no one would bother to look for the information if it is on paper instead of online.

Security through obscurity as a justification to repeal the transparency provisions of the STOCK Act starts us down a slippery slope where any government action or information could be taken offline in the name of safety. Campaign contributions made public on the FEC’s website? Take them offline. Lobbyist disclosure reports made public on the sites of the Clerk of the House and the Secretary of the Senate? Put them in file cabinets. Congressional hearings webcast by Committees? Take the cameras out of the room.

It is possible that the Senate’s overreaction could have been avoided if anyone had the chance to read the bill. According to Roll Call, “neither the Senate Homeland Security and Governmental Affairs Committee nor its House counterpart seemed to have specifics on what was in the works, a further indication that the matter was being handled at the leadership level in each chamber.” The bill, S. 716, was voted on by unanimous consent last night shortly after it was introduced by Senator Reid, and apparently after many members went home for the weekend. The bill was not available to the public on the Library of Congress website until after the vote.

It would be nice to think that the House, always more tech savvy than the Senate, would be less willing to throw the baby out with the bathwater and seek a more nuanced solution. But odds are that body too will take a vote in favor of obscurity, probably today. The result: More corruption and less trust in government.