Yesterday, a three-judge panel of the D.C. Circuit Court of Appeals demonstrated that it gets the need for greater transparency of money in politics. In a victory for transparency advocates, the court denied a motion to stay a lower court ruling that requires comprehensive disclosure of “electioneering communications.” In non-lawyer language, that means that nonprofit groups like the Chamber of Commerce, Crossroads GPS and Priorities USA that want to run political ads right before an election will have to disclose their donors.

The case is Van Hollen v. FEC and the issue is whether the FEC properly narrowed its own disclosure rules, leaving donors in the dark about who is funding campaign ads. Under the Bipartisan Campaign Reform Act, (also known as the McCain-Feingold law) certain disclosure requirements applied to organizations making “electioneering communications”—ads that refer to a candidate and run within 30 days of a primary election or 60 days of a general. Under the law, the group running the ad must identify any person, corporation or labor union that contributed $1000 to the organization. (It should be noted that the old rule also permits the group to set up a separate segregated bank account to make electioneering communications. If it does that, only donors to that account need to be disclosed. This is not unlike provisions in the DISCLOSE Act.)

The FEC gutted the old rule, limiting disclosure to only those contributions made “for the purpose of furthering electioneering communications.” In other words, the Commission created a gaping disclosure loophole that meant donors behind some of the nastiest political ads that flood the airwaves would remain secret. Van Hollen sued, and the lower court agreed with him that the original rule should remain in place. By that time, however, two other groups joined the case as “intervenors” and urged the court to “stay”—or hold off—enforcing the decision that would require immediate disclosure.

The panel of D.C. Court of Appeals agreed with the lower court and refused to grant the stay, recognizing the importance of disclosure. The lower court judge based her decision in part on the Supreme Court’s observation that, “the disclosure requirements serve an important public function because they ‘provide the electorate with information about the sources of election-related spending’ and help citizens ‘make informed choices in the political marketplace.’ (Citations omitted) The result of the ruling is that the original, broad disclosure requirement is in effect and groups should be on notice that they are required to disclose their donors if they plan to run electioneering communications.

But, don’t expect to see a database of donors pop up on the FEC’s website tomorrow. Groups will try to avoid disclosure and have already begun to craft ads they think won’t trigger disclosure requirements. (Think ads that say “Congress” instead of “Congressman Smith.”) The groups will also ask the FEC to provide “Advisory Opinions” (AOs) as to whether disclosure rules apply in particular circumstances. How the FEC responds to these requests for AOs may signal how serious the commission is about enforcing the new, old rule. The FEC, with its even split between Democrats and Republicans may well deadlock rather than move forward on disclosure and enforcement.

The judicial system is likely not done with the case either. It is possible that the decision denying the stay will be appealed, in which case we would hope the judicial system continues to favor disclosure over secrecy. Yesterday's decision gives us reason to believe that the judicial branch will continue to trend toward greater transparency.

The American Future Fund (AFF) is asking the FEC what kind of ads they can make without triggering donor-reporting requirements. So they are making a formal request to help clarify what the phrase, "clearly defined candidate" means.

The lawyers for AFF ask the following questions to the FEC. The proposed advertisements are sampled from the advisory request. (These are just a few of the ads; look here for the full request.)

Do you think that the examples in the following advertisements are identifying candidate and should trigger reporting requirements?

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The American Future Fund is a social welfare organization, also known by its tax status as a 501c4 group. These types of groups do not have to disclose their donors with the IRS. Groups have to file electioneering reports if their ads meet electioneering requirements. 

The Federal Election Commission is the supposed enforcer of the nation’s campaign finance and disclosure laws. But, with commissioners evenly divided between Democrats and Republicans, the FEC has long lived up to its reputation as being an agency designed to fail. Based on the witnesses it invited to testify about proposed rules regarding disclosure of independent expenditures and electioneering communications, it seems the agency is not only designed to fail, but is setting itself up to do so.

The FEC would probably argue that the five witnesses who testified represented a cross-section of ideas and positions, from the Chamber of Commerce to the AFL-CIO; the Alliance for Justice Action Campaign to the Center for Competitive Politics and the James Madison Center for Free Speech. But in terms of the positions they advanced on whether the FEC has the authority to draft new disclosure rules in light of the Citizens United Case, the group spoke with one voice—and the message they delivered was a resounding “no.”

Eleven U.S. Senators, Sheldon Whitehouse, Jeanne Shaheen, Al Franken, Jeff Merkley, Tom Udall, Sherrod Brown, Michael Bennet, Chuck Schumer, Barbara Boxer, Bernard Sanders and Kirsten Gillibrand, beg to differ. They submitted comments to the Commission urging the agency to “use its rulemaking authority to implement broad disclosure and disclaimer requirements.”

Surely, if it had wanted to, the Federal Election Commission could have found one witness to testify that the agency has the authority to draft new disclosure and disclaimer rules to ensure transparency in post-Citizens United world. It could have found one witness to suggest how the agency could draft rules that would, as the Supreme Court stated in the Citizens United case, “[enable] the electorate to make informed decisions and give proper weight to different speakers and messages.”

In truth, even with a balanced panel of witnesses, the agency probably would have failed to adopt comprehensive disclosure and disclaimer rules. But, by silencing the voices that favor transparency, the FEC willingly abdicated all responsibility to foster open and honest debate.

Correction: The FEC does not have to invite any group to testify, rather, the agency publishes notice "to advise interested persons and to invite their participation." Nevertheless, it seems pro-transparency groups would have received a chilly reception at the hearing. As one FEC commissioner stated, "all discussion of this critical issue [of disclosure and disclaimer rules] was banned from the NPRM." Moreover, Commissioner Weintraub's motion to advance Chris Van Hollen's proposed rulemaking on disclosure of Independent Expenditures by non political committees deadlocked at the FEC while the motion to make rules allowing corporations and unions to make Independent Expenditures passed by a vote of 5-1. It remains that the agency is unwilling to proffer pro-disclosure rules. Hopefully, Congress will pass the DISCLOSE Act, thereby requiring the FEC to act.

Last month Politico reported that corporate contributions to a super PAC set up to support Democratic U.S. Rep. Howard Berman were being used as a weapon against him during the contentious primary race that he and Democratic Rep. Brad Sherman, also from California, have found themselves in as a result of redistricting.

The Politico article is able to report facts regarding campaign finance data by accessing publicly available information. The Federal Election Campaign Act of 1971 initially established substantive disclosure requirements for federal candidates, political parties, and PACs. Subsequent amendments and legislation, including the Bipartisan Campaign Reform Act of 2002 and the Honest Leadership and Open Government Act of 2007 have further strengthened these requirements.

As I have written about before, this information can be found on the Federal Election Commission’s website under Campaign Finance Reports and Data, but  it’s not easy to use unless you know what you are looking for. However, because the information is made available to the public, organizations like the Sunlight Foundation, ProPublica and the New York Times have been able to take FEC data and put it in more user-friendly formats. The information is then presented so that the most relevant information is easily accessible to regular people.

"The News Without Transparency" shows you what the news would look like without public access to information. Laws and regulations that force the government to make the data it has publicly available are absolutely vital, along with services that take that raw data and make it easy for reporters to write sentences like the ones we've redacted in the piece above. If you have an article you'd like us to put through the redaction machine, please send us an email at mbuck@sunlightfoundation.com.

The day of gadget envy reckoning is upon us as Apple unveils their latest iPad and it seems only natural that the Sunlight Foundation watch this media frenzy in regards to our policy proposals. One particularly confounding (and floundering) situation is that the Senate refuses to use the internet and file their campaign finance reports electronically, though a few Senate offices nobly do.

The current process of filing goes something like this: a senator's campaign staff fills out campaign financial disclosure forms as required every quarter, submits those forms to the Secretary of the Senate who prints them out and sends it over to the Federal Election Commission. The FEC then takes this pile of paper and pays an army of data-entry folks to put those forms back into electronic format and then the FEC posts it online. We might be laughing at this scene set to Yakety Sax if it weren't costing taxpayers an estimated $430,000 every single year! This is stupid.

We tried appealing to their environmental concerns. We tried appealing to their government efficiency concerns. We tried appealing to their debt concerns. Turns out those concerns aren't so strong. Now, we appeal to their gadget envy concerns.

The iPad Proposal:

• Most recently cited cost of not filing electronically: $430,000
• Cost of a brand new 16 gb iPad with WiFi and AppleCare Warranty with taxes: $612.68
• Number of iPads that could be purchased with savings: 701
• Every Senate office gets 7 iPads and the extra goes to the Secretary of the Senate.

Maybe this will bait McConnell out from his cave of baffling obstruction?

Note: This proposal is tongue-in-cheek and we think it's much better for senators to just use their existing computers to file, like the House has been doing for years. Maybe they could put the money they would save towards funding other e-government programs?!

Today, the Sunlight Foundation launched a campaign urging Senators to voluntarily file their campaign finance reports electronically. Presidential candidates and candidates for the House have filed their campaign finance reports electronically with the Federal Election Commission for over a decade. The reports let the public know what special interests, lobbyists or out-of-state donors might be funding a candidate’s campaign.

U.S. Senators have exempted themselves from mandatory electronic filing of campaign reports, holding fast to an archaic system in which they file their reports with the secretary of the Senate, who prints them out and delivers them to the FEC. The FEC spends about $250,000 and untold hours having the records typed in, line by line, to its databases. This isn’t just inefficient spending of our tax dollars, it’s a waste of time that denies the public real time access to information that can help shape and inform their opinions about the people they will be voting for in November.

Legislation has been introduced to mandate electronic filing by Senate candidates, but the common sense Campaign Disclosure Parity Act has long suffered as a sacrificial lamb in the world of political gamesmanship and its passage is far from certain. Ultimately, a legal mandate will be necessary to ensure universal electronic filing, but until then, senators and Senate candidates can voluntarily file their campaign finance reports electronically, shining a bright and timely light on campaign finance information while decreasing the chances that errors will occur when the data is re-entered.

Only a handful of Senators currently file electronically. The rest should be embarrassed at their complacency and willingness to live in the dark ages. Campaigns already have this information in electronic form, and the FEC makes it easy to file electronically. Supporters of transparency, please call your Senators and ask them to use the net.

To read more about e-filing, check out our handy resource page.

*Photo by Steve Rhode

The FEC’s decision on Stephen Colbert’s request to form a PAC garnered a lot of publicity today, but a second, less noticed decision has potentially far more devastating consequences. The FEC unanimously decided that federal officeholders and candidates may solicit contributions for independent expenditure-only PACS, also known as Super PACs. Candidates and elected officials may only ask for contributions of $5,000 or less from individuals, but the Super PACs are free to take unlimited contributions from individuals, corporations and labor unions.

This decision takes us perilously close to the days of soft money—those unlimited contributions candidates would solicit for the national parties in order to skirt limits on how much could be directly given to their campaigns. Soft money contributions to the national parties dried up after limits were put in place by the Bipartisan Campaign Reform Act of 2002.

But now they are back. Almost. The FEC’s decision today opened the door for elected officials to ask corporate CEOs or union leaders for personal contributions of no more than $5,000. That is a limit in name only. There is nothing preventing those donors from writing a check for far more than that amount, not only from their personal pocketbook but from their corporate or union treasuries as well. The nudge-nudge-wink-wink fundraiser is fully operational.

Moreover, the Super PACs for which Members of Congress will be dialing for dollars are legally known as “Independent Expenditure Only Political Committees,” begging the question: Can a PAC act independently from a candidate or elected official who is raising money for it?

The campaign finance system is in tatters. Despite niceties that place “limits” on how much candidates and elected officials can ask for, the fact is that unlimited contributions from individuals, corporations and unions now have multiple avenues to reach the center of our electoral process. Transparency is the thread that may hold accountability in the democratic process in place. A version of the DISCLOSE Act, the Lobbyist Disclosure Enhancement Act and the Shareholder Protection Act are important tools to ensure that as unlimited money takes over our elections, we can at least see where it is coming from.

When the Citizens United ruling came down last year I spent a great deal of time explaining the specifics of how corporations could spend money in elections to friends, family, and on the radio and television. The biggest confusion that a lot of people had was whether corporations could, in the wake of the ruling, contribute directly to the campaign of a political candidate. The answer was easy: no.

According to the Washington Post, the Republican members of the Federal Election Commission (FEC) want to change that. These three members released a document stating that corporations should be able to contribute directly to the campaigns of federal office seekers. The document states that the prohibition on these direct donations are "at best suspect," in light of the Citizens United ruling.

It is not clear where, exactly, these FEC commissioners see an inference towards the elimination of the ban on direct corporate contributions to candidates in the Supreme Court's ruling. The ruling assails the Austin ruling's finding of an anti-distortion reasoning for banning corporate independent expenditures, but repeats the Buckley finding that direct contributions to candidates can be banned and limited due to an anti-corruption concern, whether real or just an appearance of. The only time the Citizens United ruling swipes at anti-corruption concerns is to state that they do not apply to independent expenditures.

Senators Tester and Cochran introduced the Senate Campaign Disclosure Parity Act today, a bill that would speed disclosure of public campaign finance information, ensure the accuracy of that information, improve efficiency and save taxpayers money. Sunlight has been supporting a version of this bill for the past three congresses—pretty much since we first opened our doors. Maybe this no-brainer bill will finally become law during the 112th Congress.

Senators’ counterparts in the House, presidential candidates and PACs all electronically file their campaign finance reports. Senators, on the other hand, remain mired in an archaic system in which they file their quarterly reports with the Secretary of the Senate, who then prints them out and delivers them to the Federal Election Commission. That agency then inputs the information into its computer databases so it can be publicly viewed online, all at annual cost of about a quarter-million dollars of taxpayer money. Eliminating this duplicative exercise balance the budget, but the outmoded process is worse than simply wasteful. Re-entering the data delays public access to crucial information about who is funding Senate campaigns, sometimes until after the election takes place.

The previous versions of this bill all have had significant bipartisan support and no Senator that we know of has ever publicly opposed the bill. So why are we still waiting for it to pass?

The culprit is Senator Mitch McConnell and his minions, who have demanded that in order for Senators to be able to vote on the bill, there must also be a vote on an unrelated controversial amendment. The amendment would force nonprofit and religious organizations to disclose the names of anyone who gives $5000 or more to the organization any time the group exercises its right to file a complaint with the Senate Ethics Committee. Look closely. The self-serving amendment has nothing to do with the disclosure law. But more importantly, if the amendment became law, the result would be fewer legitimate inquiries into Senators’ ethical conduct.

The reason the Republicans have been able to make unwarranted demands for a vote on this “poison pill” amendment is because they have objected to Majority Leader Reid’s attempts to bring the bill up by "unanimous consent," a procedure the Senate uses to move non-controversial bills quickly, so as to preserve limited floor time for contentious issues. In an ideal world, unanimous consent would be the best to get this straightforward bill enacted. But it hasn’t worked so far. If the Republicans continue to insist on the amendment, perhaps it is time to let the bill come to the floor for a vote. If any Senator is willing to go on record as being against transparency, efficiency and saving taxpayers’ dollars, let him. In the end, we think enough Senators will oppose the amendment and vote to enact a clean electronic filing bill once and for all.