What You Should Know about the DISCLOSE Act Part 2: How does the DISCLOSE Act Shine a light on Super PACs and Dark Money?

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As we wrote yesterday, the Senate will vote on the DISCLOSE Act on Monday. In a series of blog posts we explain “What You Should Know About the DISCLOSE Act.” This morning we answer the question, “How does the DISCLOSE Act shine a light on Super PACs and dark money?”

As a reminder, in the Citizens United case, the Supreme Court overturned a century of law and decided that unlimited sums of money from corporations (and by extension, labor unions) could be used in elections as long as the expenditures were “independent” of candidates’ campaigns. Super PACs, officially known as independent expenditure only committees, and 501(c) nonprofit organizations, also known as “social welfare” organizations, are the two main vehicles that have been funneling hundreds of millions of dollars of undisclosed “dark money” into the 2012 elections.

Dark money is poisonous to our democracy because it fully undermines the theory of an informed and educated electorate. It is “dark” because its sources are hidden from the public. There are virtually no disclosure rules that apply to 501(c) organizations and, in the case of Super PACs, the limited disclosure that applies is often not timely enough to be meaningful to voters. Additionally, because donations to Super PACS can be laundered through shell 501(c) organizations, the actual donors may never be disclosed.

Because of dark money, voters have no idea what interests are represented behind the electioneering ads they see. It is hard for voters to determine the credibility of a message if we don’t know who is speaking.

Dark money corrupts or appears to corrupt our elected officials. Very few individuals, corporations or labor unions are likely to make five- or six-figure contributions to political candidates for purely altruistic reasons. Rather, they do so to gain access and influence with a future elected official. Maybe the donor wants favorable tax treatment, fewer (or tighter) regulations for a particular industry, a government bailout or even an ambassadorship. So, while the voters remain in the dark about the sources of dark money, it is certain elected officials don’t. Large, undisclosed donations to outside groups can be presented as calling cards by lobbyists seeking to gain access to decision-makers. The possibility of negative ads can be wielded as a threat to Members of Congress who don’t toe the line the donor has drawn. A compliant politician might benefit from mudslinging, inaccurate dark money ads that target his opponent.

It should also be noted that there is nothing to prevent dark money from coming from foreign sources—something the Supreme Court and many opponents of the DISCLOSE Act would agree has no place influencing our elections. Just as Super PACs and 501(c)s can be used to hide home-grown contributions to elections, they can be used to disguise money that comes from outside our borders so that a foreign national, a foreign company or even a foreign government may sway an election in the United States.

The DISCLOSE Act peels away the layers hiding the true sources of money behind electioneering communications. It would require Super PACs and 501(c)s, and any other outside group spending $10,000 or more on election-related activities, to disclose within 24 hours any donor who has given more than $10,000 to the organization. To eliminate the possibility of contributions being laundered through shell organizations, transfers between organizations are also subject to disclosure, if the transfers are made to fund campaign-related spending.

It’s simple. The DISCLOSE Act exposes dark money to sunlight.

At the same time, the bill provides protections that ensure that donors who wish to remain anonymous may do so. Contributions that donors do not want used for political purposes may be put in segregated accounts to which the DISCLOSE Act’s requirements would not apply.

Finally, the bill’s 24-hour disclosure requirements ensure that information about who is behind campaign ads reaches the voters before they go to the polls.

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 Citizens United, noting, “A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today.” Only if the DISCLOSE Act is enacted will such a system of disclosure exist.

Later: Does the DISCLOSE Act Favor Unions? (Hint: The answer is no.)

Update: What You Should Know About the DISCLOSE Act, Part 3: DOes the DISCLOSE Act Favor Unions

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