A Connecticut bill has been making the rounds in transparency circles recently: HB 5556, a toothy, bipartisan approach to corporate and union campaign financial disclosure, introduced as the state’s response to Citizens United. It quickly passed the CT House 94 - 57 and the Senate 20 - 15 on May 8th, and now all eyes are on Governor Dan Malloy to see whether he’ll veto the bill or sign it into law this week. Although Malloy authored the original text, the bill has been significantly beefed up since it left his office and entered the Government Administration and Elections Committee -- so much so that Malloy’s office has been resistant to showing their support.

But they should get over themselves. It’s refreshing to see a state legislature take such a dedicated approach to campaign finance disclosure reform, especially in an election year. Here’s a round-up of some of the bolder transparency-related measures CT legislators are trying to pass with HB 5556:

• Super PACs and other 501(c)s engaged in campaign-related activity would have to...
• Report all donations over $1000 and publish the names and addresses of these donors on the organization’s website.
• Report any transfer of funds marked for political activity, including the full name and addresses of all individuals involved in making the donation and transfer -- even when the receiving end is another organization. (Translation: Say goodbye to shadowy front groups and intermediaries...)

<li>Corporations, unions, and other legally organized bodies would have to have their boards pre-authorize each and every campaign-related disbursement over $4000 through a vote. Votes of individual members and the resulting expenditures would then need to be published on the organization’s website within 48 hours of voting.</li>
<li>All political ads would be required to not only list the top five donors at the end of the ad (strengthening current “Stand by Your Ad” provisions), but to also include a URL pointing to a website where people can see <strong>all</strong> the organization’s donors -- including the names and addresses of every donor who gave more than $1000.</li>

This isn’t an exhaustive list of HB 5556’s provisions, but these requirements speak to the boldness of Connecticut’s approach. In fact, many of the measures listed above are kin to those in the DISCLOSE Act, a Sunlight-supported federal campaign finance bill currently languishing in Congress.

HB 5556 isn’t a perfect bill (note the strange rider about military voting and the potential "chilling" of grassroots/citizen lobbying near election day), but as far as its approach to transparency measures are concerned, it should be commended and seriously considered as a (constitutional) solution to a problem faced by states everywhere, at time when reform is needed most.

The Senate Rules Committee will hold a hearing on Thursday to discuss S. 2219, the “Democracy Is Strengthened by Casting Light on Spending in Elections Act of 2012” (The DISCLOSE Act.) Sunlight’s Ellen Miller is submitting testimony in support of the DISCLOSE Act.

We hope this hearing will put to rest all of the arguments against the bill. In dismantling 100 years of prohibitions against corporate treasury funds being used to elect candidates, the Supreme Court, in the Citizens United case put a great deal of faith in the idea that disclosure will remove the taint of corruption from the new influx of cash. The majority opinion observed that the Internet is becoming the best way to hold politicians and influencers accountable. But, the Court created an entirely new spending regime for which no disclosure system is in place. For online transparency to perform the functions ascribed to it by the Citizens United ruling, Congress has to create new laws that reflect the new reality of expanded independent spending. DISCLOSE 2012 creates that system of transparency and as such should receive wide support from members on both sides of the aisle.

The DISCLOSE Act introduced earlier this year goes straight to heart of the problem: the lack of transparency for unlimited, dark money and the influence it has on our elections and our elected officials. The updated bill removes extraneous and controversial provisions that plagued an earlier version of DISCLOSE, instead focusing on what the public demands — transparency. 


Specifically, the bill’s robust reporting requirements for Super PACs, corporations, unions and nonprofit organizations that make independent expenditures and electioneering communications will begin to address many of the problems wrought by Citizens United: It will shine a light on dark money; it will provide an enforcement mechanism to ensure that no foreign money is influencing our political process; it will allow citizens to determine the credibility of campaign ads based on the messenger as well as the message; and it will arm citizens with information about campaign funding before they go to the polls, in real time and online. The disclosure and disclaimer provisions of the DISCLOSE Act are narrowly crafted so as not to infringe on constitutional protections. The Act does not require organizations to disclose donors who have contributed less than $10,000 and allows groups to create a firewall that allows donors who do not wish to contribute to political activities to remain anonymous. At the same time, the DISCLOSE Act, for better or worse, does not put an end to concentrations of wealth being used in an effort to impact elections. Simply put, it does not chill speech. But the Act rightly and importantly shines a light on the dark money now infecting our elections and creates informed citizens and a more accountable government.

So far, the bill has the support of Senate Democrats. The issue of transparency in government is too important to become bogged down in partisanship, and we hope many more Senators on both sides of the aisle will cosponsor the legislation after Thursday’s hearing.

Ellen Miller Testimony DISCLOSE 2012 Final

Senate Democrats unveiled their version of the DISCLOSE Act today. (We wrote about the House bill, introduced last month, here.) Senator Whitehouse was joined by approximately 35 of his Democratic colleagues on legislation that has been described as a pure disclosure and disclaimer bill, with none of the controversial provisions that caused the DISCLOSE Act to fail in the Senate by one vote in 2010. The Senate’s laser-like focus on disclosure and disclaimer provisions mirrors Sunlight’s recommendations in our draft Stop Undisclosed Payments in Elections from Ruining Public Accountability Act (the SUPERPAC Act). By focusing on disclosure and disclaimer provisions only, with no carve outs for select groups or bans on certain types of contributions, the 2012 version of the DISCLOSE leaves opponents of the previous bill with little or nothing to object to--unless they believe our elections should continue to be paid for by dark money.

Specifically, the bill will create robust reporting requirements for Super PACs, corporations, unions and nonprofit organizations that decide to make campaign expenditures. It will also require ads to contain disclaimers by the top officials of such groups, similar to the stand by your ad mandates required of candidates.

Voters have been bombarded with campaign ads largely paid for by outside groups, with much of that money totally undisclosed. The Supreme Court’s Citizens United decision, while touting the importance of disclosure, created a system in which money laundering could be used to funnel unlimited secret money into our political system. The DISCLOSE Act is a crucial step to address the corrupting influence of that money on our elections and our elected officials.

Senator Schumer has promised to hold a hearing on the bill in the Rules Committee next week. It will be interesting to see how his colleagues, including John McCain, Olympia Snowe, Lisa Murkowski and others who have expressed concern about the impact of the Citizens United decision, will react to this leaner version of DISCLOSE. We hope they recognize that the bill does nothing more, and nothing less, than lift the cloud that has been obscuring money in politics so that all citizens can know who is paying for our elections.

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.

Democratic Leader Nancy Pelosi was the guest on last night's Colbert Report, following on House Democrats' recently introduced DISCLOSE Act (HR 4010). The new, leaner, disclosure-only legislation has gotten Colbert's attention, and also his support.

House Democrats unveiled The DISCLOSE 2012 Act (HR 4010, not up on THOMAS yet) today, a crucial step toward transparency to address the corrupting influence unlimited, secret corporate and union money is having on our elections and our elected officials.

Shortly before the second anniversary of the Supreme Court’s disastrous Citizens United decision, the Sunlight Foundation drafted the Stop Undisclosed Payments in Elections from Ruining Public Accountability Act (the SUPERPAC Act), a streamlined disclosure and disclaimer only bill. We are pleased that on first blush, DISCLOSE 2012 meets the goals of our draft bill.

The bill will create robust reporting requirements for Super PACs, corporations, unions and nonprofit organizations that decide to make campaign expenditures. It will also require reporting of transfers by those groups to others making such expenditures, to prevent the money laundering that makes it easy to hide huge campaign contributions.

DISCLOSE 2012 will also require ads to contain disclaimers by the top officials of such groups, similar to the stand by your ad mandates required of candidates. In addition, shareholders and members of outside groups will be informed of campaign spending, and lobbyists will be required to report their spending on independent expenditures and electioneering communications.

When the Supreme Court decided the Citizens United case, it hung its hat on the theory that systems were in place to ensure unlimited corporate and union spending would be disclosed on the Internet. The Court was, at best, naïve. Because the Court created a whole new kind of spending, there was no disclosure system in place. (And the moribund Federal Election Commission would never be able to create such a system through a rulemaking process.) DISCLOSE 2012 creates that system of transparency and as such should receive wide support from members on both sides of the aisle.

Early primary spending has demonstrated that previously unheard of expenditures will become commonplace and overwhelm the 2012 elections. At a minimum, voters have a right to know whether the Super PAC that paid for an ad they just watched is tied to a candidate, or was funded by corporation or union with very special interests. Candidates will know who is footing the bill for ads that support their candidacy, even if such ads are technically not “coordinated” with their campaigns. With DISLOSE 2012, the voters will know too.

Here is a statement from Ellen Miller on the bill, and see below for a redlined comparison of the version of the DISCLOSE Act that fell to Republican obstruction in the Senate in 2010.

We've taken the just-introduced 2012 version of the DISCLOSE Act and compared it to its 2010 predecessor (which didn't get cloture in the Senate.) This comparison is much rougher version that I would have liked to generate, but we had to scrape the 2012 version from a PDF and try to clean it up. That scraping and cleaning effort is far from perfect, so it may be difficult to read in parts.

Even with the mess, it's interesting to see what stayed the same and what changed. Once you get past the first 15 pages or so, all of which were struck out, it become apparent how the legislation has significantly changed. The black text is the original version; everything in red is what was added or deleted.

Redline of 2010 and 2012 DISCLOSE Act

The New York Times looked at this week’s Super PAC filings with the FEC and demonstrated—again—what we knew would be the result of the Supreme Court’s Citizens United decision: The specter of hundreds of thousands of dollars of hidden money influencing our elections and those who will be elected.

The times notes that, “some checks came from sources obscured from public view, like a $250,000 contribution to a super PAC backing Mr. Romney from a company with a post office box for a headquarters and no known employees.” But, while the public remains in the dark, it would be naïve to think that the identity of the donor (or donors) of that generous contribution is unknown to Mr. Romney. So, what does he or she want? Favorable tax treatment? Fewer regulations for a pet industry? A bailout? An ambassadorship? It is possible that the money came from a generous citizen who simply believes Romney would be the best man for the job. But the system of secret dark money now in place means the voters will never know.

The Supreme court relied heavily on the theory that transparency would cleanse the unlimited money that would shape our elections as a result of their decision in the Citizens United case, noting, “A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today.” Unfortunately, the Court failed to realize that such a system of disclosure does not yet exist.

There is a solution. Sunlight proposed the SUPERPAC Act as one way to shine more light on the dark money infecting our elections. It would impose a regime of disclosure and disclaimers that would lift the veil of secrecy under which large donors may hide. But Congress needs to act. So far, we’ve heard talk. House Democrats say they will re-introduce a slightly paired down version of the DISCLOSE Act, a bill that failed to be enacted last year. And on the other side of the Capitol, Senator Schumer has promised hearings on disclosure by Super PACs.

These are important steps. (Although, arguably they should have happened well before the election season got under way.) Disclosure legislation is a critical tool in the fight against the undue influence secret money has on our campaigns and our elected officials. Unless Congress acts, we can be sure that we have only seen the tip of the dark money iceberg that is undermining the fundamentals of our democracy.

As the second anniversary of the Supreme Court’s disastrous Citizens United decision approaches, the Sunlight Foundation has drafted the Stop Undisclosed Payments in Elections from Ruining Public Accountability in Campaigns Act (the SUPERPAC Act). This bill, if enacted, would be one step towards addressing the corrupting influence unlimited, secret SUPERPAC money has on our elections and our elected officials.

Unfortunately, Congress seems to have given up on efforts to shine a light on campaign activities that are financed by secret money flowing from corporations and unions. First, the DISCLOSE Act was largely derailed by congressional Republicans. Now, by failing to offer new legislation, both parties appear to have abdicated their responsibility to ensure our elections are transparent

We hope the SUPERPAC Act reignites the effort and that members of Congress will decide to stop serving their self-interest and start acting in the public interest by taking a step in favor of transparency. The SUPERPAC Act is designed to be a disclosure only bill, largely including the transparency provisions of the DISCLOSE Act while leaving out some of the bans, carve-outs and other provisions that made DISCLOSE controversial.

We encourage the public to comment on our effort so we have posted The SUPERPAC Act on PublicMarkup.org, Sunlight’s web site that allows anyone to help improve legislation we propose. Highlights of the bill include the following:

• Ensure disclosure of donors who fund independent expenditures and electioneering communications made by Super PACs or other 501(c) organizations. Donors giving to an organization for other purposes may remain anonymous if the organization establishes separate accounts for non-election related spending.

• Require real-time, online disclosure of all reports. Data must be in searchable, sortable, machine-readable formats and reports must include unique IDs for all filers.

• Require disclaimers (stand-by-your-ad statements) and identification of top funders in the ad.

• Require registered lobbyists to report their spending on independent expenditures and electioneering communications.

• Require all candidates and committees to file electronically with the Federal Election Commission.

The SUPERPAC Act is not a panacea for all that ails our elections today. It is a critical first step—one that will arm voters with important knowledge about who is paying for our elections. Other proposals to address the problem of unlimited secret money infecting our democracy include a constitutional amendment, legislation to give shareholders a voice in how their money is spent on elections, and public financing of elections. But, as the Supreme Court and Members of Congress on both sides of the aisle have endorsed disclosure, the Super PAC disclosure-only bill should be the least controversial and most easily enacted of the many proposals.

In politics, the messenger is as important as the message. Voters have a right to information that will tell them whether the Super PAC that paid for an ad they just watched is tied to one of the candidates or was paid for by a corporation or union to whom the candidate will be beholden if he or she is elected. We hope with the new year Congress will return with a new resolve to take up the issue of transparent elections and enact the SUPERPAC Act.

SUPERPAC Act

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.