[Congressional Record Volume 156, Number 71 (Wednesday, May 12, 2010)]
[Senate]
[Pages S3628-S3632]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DISCLOSE ACT
Mr. SCHUMER. Mr. President, I rise today in support of S. 3295, the
DISCLOSE Act. I am happy to be joined by several of my colleagues, all
of whom were essential in putting this bill together: Senators
Feingold, Wyden, Bayh, Franken, and Bennet. We come to the floor today
with a clear and powerful statement: the DISCLOSE Act will provide
much-needed transparency to our political process in light of Citizens
United, and will allow the public to know who really is behind the
political messages they see on TV or hear on the radio. The DISCLOSE
Act will follow the Supreme Court's advice and make disclosure and
disclaimers the cornerstone of our reform efforts and will apply
equally to all corporations, unions, trade associations, social welfare
organizations and section 527 groups. It is intended to encourage
political participation by creating an educated electorate. Further,
the DISCLOSE Act will not chill speech or political participation, it
will enrich it.
On April 30, 2010, 37 colleagues and I introduced the DISCLOSE Act,
Democracy Is Strengthened by Casting Light On Spending in Elections, S.
3295, to respond to the Supreme Court decision in Citizens United v.
FEC. The purpose of this legislation is to provide the American public
with information on who is speaking when political advertisements and
expenditures are made and to prevent them from being misled by
organizations attempting to disguise their identities through the use
of shadow groups. I want to reiterate that this act is in no way meant
to deter political speech or spending, only to provide information so
that the public is empowered to make informed decisions. Additionally,
the disclosure and disclaimer provisions in the act apply equally to
corporations, unions, and groups organized under sections 501(c)(4),
(c)(5), (c)(6), and 527 of the Tax Code. We play no favorites.
In writing the majority opinion for the Court in its January
decision, Justice Kennedy was very clear in articulating the Court's
support for disclosure. He said, ``[t]he First Amendment protects
political speech; and disclosure permits citizens and shareholders to
react to the speech of corporate entities in a proper way. This
transparency enables the electorate to make informed decisions and give
proper weight to different speakers and messages.'' Kennedy also stated
that ``disclaimers avoid confusion by making it clear that the ads are
not funded by a candidate or political party.'' In fact, eight of the
nine Justices agreed that disclosure and disclaimer provisions were
necessary, and in the public's interest, to provide this information.
The Court's decision opened the door to allow certain corporate
spending in elections that was previously disallowed. In line with the
Court's support for disclosure and disclaimer provisions, we have
introduced the DISCLOSE Act and designed it to strengthen the Court's
stated protections so that the public knows who is speaking and
sponsoring these newly permitted messages.
This legislation would provide the following increased protections
for the American people. It will ensure that they have full and timely
disclosure of campaign-related expenditures by corporations, labor
unions, social welfare organizations, trade associations and 527
groups. It requires these covered organizations to report expenditures
to the Federal Election Commission within 24 hours if the expenditure
is $1,000 or greater within 20 days of an election and $10,000 or
greater before that date. It will then require the organization to post
this information on its own Web site 24 hours after reporting and to
send the information to its shareholders or members in any periodic or
annual reports. This Internet publication requirement and more rapid
reporting helps implement the Court's opinion that ``prompt disclosure
of expenditures can provide shareholders and citizens with the
information needed to hold corporations and elected officials
accountable for their positions and supporters.''
It will also require enhanced reporting to the FEC by those covered
organizations, requiring those that spend more than $10,000 per year on
campaign-related expenditures to either disclose all of their donors
that have given over $1,000 or to create a campaign-related activity
account for exclusive use in making these expenditures. If this account
is created, the organization will only need to disclose those donors
that have donated over $10,000 in unrestricted funds or over $1,000 in
funds specifically designated for campaign-related expenditures.
This legislation will also require those organizations that make
transfers to other organizations for the purpose of making campaign-
related expenditures to report those transfers in order to drill down
so that the public truly knows where the money being spent is coming
from. It will also allow donors to covered organizations to designate
that their donations will not be used for campaign-related activity. If
a donor makes this designation, the organization must then certify to
the FEC that it will not use the donation in this manner. These
requirements force organizations making these expenditures to be aware
of the persons whose money they are spending on campaigns.
Our intent is not to seek the names of dues-paying members. Nor do we
want to dissuade prospective members or donors from supporting a
particular cause or organization. First, as outlined above, we believe
that setting up and utilizing a campaign-related activity account will
shield any organization from having to disclose any donor that does not
want to have his or her funds go to political purposes. Second,
creating the option for a donor to affirmatively designate that the
donation should not be used for political spending will provide a
mechanism to keep this donation walled-off from disclosure or
disclaimers. Third, even if a group decides to transfer money from its
general treasury to the campaign-related activity account, thus
triggering disclosure of its general treasury, we believe the $10,000
threshold will exclude dues-paying members or your average donor who
would not want to be disclosed.
This legislation also institutes several enhanced disclaimer
provisions for political ads to ensure that the public knows who is
sponsoring them. Current regulations require candidates sponsoring ads
to stand by their ads and notify the public that they approve the
message. Our language extends this requirement to the newly empowered
organizations to make the public aware that it is not a candidate or
party speaking, in line with Justice Kennedy's language in the
decision. Additionally, it requires the top funder of an advertisement
to record a similar disclaimer, and a list of the top five donors to be
visible on the screen.
Stand-by-your-ad requirements are constitutional and essential.
Further, we believe that it would take 8 seconds to read the two
disclaimers, and not half of an advertisement as some opponents
misleadingly suggest. For those advertisements that are 15 seconds, the
act provides for a hardship exemption.
We have instituted all of these additional requirements in order to
bring more awareness to the public. I believe that it is completely in
the American peoples interest to know who is speaking about candidates,
and the Supreme
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Court agrees. This is not about preventing speech or making speech more
difficult, it is solely about making the public aware of who the
speakers are. This is fully consistent with the Constitution. There is
no reason that any group would decline to spend unless it was
attempting to deceive the American public by speaking without
identifying who it is. This bill drills down and follows the money so
that any organizations attempting to disguise their activities through
shadow groups are not allowed to mislead the public. It brings
everyones political speech into the sunlight.
I now yield for Senator Feingold, a leader and true champion of
reform and transparency.
Mr. FEINGOLD. Mr. President, I appreciate the Senator from New York
bringing us together to discuss the DISCLOSE Act, S. 3295, which he
introduced last week and which I am proud to cosponsor.
As the name suggests, the central goal of this bill is disclosure. It
aims to make sure that when faced with a barrage of election-related
advertising funded by corporations, which the Supreme Court's decision
in the Citizens United case has made possible, the American people have
the information they need to understand who is really behind those ads.
That information is essential to being able to thoughtfully exercise
the most important right in a democracy--the right to vote.
It is no secret that the Senator Schumer and I, and all of the
original cosponsors of the bill, were deeply disappointed by the
Citizens United decision. We reject the Court's theory that the first
amendment rights of corporations, which can't vote or hold elected
office, are equivalent to those of citizens. And we believe that the
decision will harm our democracy. I, for one, very much hope that the
Supreme Court will one day realize the mistake it made and overturn it.
But the Supreme Court made the decision and we in the Senate, along
with the country, have to live with it. The intent of the DISCLOSE Act
is not to try to overturn that decision or challenge it. It is to
address the consequences of the decision within the confines of the
Court's holdings. Congress has a responsibility to survey the wreckage
left or threatened by the Supreme Court's ruling and do whatever it can
constitutionally to repair that damage or try to prevent it.
In Citizens United, the Court ruled that corporations could not
constitutionally be prohibited from engaging in campaign related
speech. But, with only one dissenting Justice, the Court also
specifically upheld applying disclosure requirements to corporations.
The Court stated:
[P]rompt disclosure of expenditures can provide
shareholders and citizens with the information needed to hold
corporations and elected officials accountable for their
positions and supporters. Shareholders can determine whether
their corporation's political speech advances the
corporation's interest in making profits, and citizens can
see whether elected officials are `` in the pocket' of so-
called moneyed interests.
The Court also explained that disclosure is very much consistent with
free speech:
The First Amendment protects political speech; and
disclosure permits citizens and shareholders to react to the
speech of corporate entities in a proper way. This
transparency enables the electorate to make informed
decisions and give proper weight to different speakers and
messages.
The Court also made clear that corporate advertisers can be required
to include disclaimers to identify themselves in their ads. It
specifically reaffirmed the part of the McConnell v. FEC decision that
held that such requirements are constitutional.
The DISCLOSE Act simply builds on disclosure and disclaimer
requirements that are already in the law and that the Court has said do
not violate the first amendment. Notwithstanding the Court's strong
endorsement of disclosure and the fact that for years opponents of
campaign finance reform have claimed that timely and exacting
disclosure requirements are preferable to other campaign finance
restrictions, we are already hearing claims that this bill violates the
first amendment. Let me take a minute to address some of the criticisms
of this bill that have been made.
First, there is the claim that the disclosure requirements are
intended to chill political expression. It is, of course, entirely
possible that some organizations will decide not to run ads if they
have to identify who is really footing the bill for them. But if that
happens, it is not because the disclosure requirements interfered with
their right to speak out, it is because they were not willing to
provide the information that the Supreme Court has said ``enables the
electorate to make informed decisions and give proper weight to
different speakers and messages.'' Candidates disclose their donors.
There is no reason for those who want to elect or defeat those
candidates not to disclose theirs. We do not intend to chill speech
with this bill. We intend to make it easier for the public to evaluate
that speech.
Second, some claim that the requirements of the DISCLOSE Act are too
burdensome, and the expense will prevent some groups from speaking.
This seems highly unlikely in light of the already high cost of
campaign advertising. Surely any group that is able to spend the kind
of money it takes to run television ads attacking or promoting a
candidate will have the resources to make sure that the American people
have the information they need to evaluate those ads.
Third, the bill is criticized because it requires additional
reporting of corporations that spend money directly from their
treasuries rather than setting up a campaign related activity account.
But this is the wrong way to look at the bill. The Citizens United
decision allows spending directly from corporate treasuries. That's the
default way of doing it, and the bill sets up a disclosure system that
will ensure that adequate information about the real sources of the
spending is made available to the public. It then sets up an
alternative format for disclosure that a corporation can choose to take
advantage of if it agrees to spend money on campaign spending only from
a separate account. That promise to spend only from the campaign
related activities account makes the more comprehensive disclosure of
contributions to the treasury unnecessary. And it should always be
remembered that any donor to a corporation or organization who wants to
remain anonymous need only specify that the contribution cannot be use
for campaign spending. These features of the bill show that it is
narrowly tailored, not that it is discriminatory.
It is also very important to note that the bill applies equally to
groups on both sides of the political fence. Corporations, unions,
groups on the left and the right, will all have to disclose their
spending and their donors if they want to spend treasury money on
political ads. This bill doesn't discriminate against anyone. It treats
all political actors equally. Any argument that the bill favors unions
or other organizations that mostly support Democrats is simply wrong. I
have a long history of bipartisan work on campaign finance issues. I am
not interested in legislation that has a partisan effect. This bill is
fair and evenhanded. It deserves the support of Senators on both sides
of the aisle.
Most of the complaints about the bill come from interests that want
to take advantage of one part of the Citizens United decision--the part
that allows corporate spending on elections for the first time in over
100 years--and at the same time pretend that the other part of the
decision--the part upholding disclosure requirements--doesn't exist.
But the law doesn't work that way. As the old saying goes, ``you can't
have your cake and eat it too.''
Once again, I very much appreciate the leadership of the Senator from
New York and look forward to working with him and all my colleagues to
pass this bill. I now yield for the Senator from Oregon, Mr. Wyden.
Mr. WYDEN. Mr. President, I thank my colleague for yielding. Like
Senator Feingold, I am an original cosponsor of the DISCLOSE Act, and
would like to address the ``stand by your ad'' disclosure provision of
that bill and the recent Citizens United Supreme Court ruling.
The Citizens United opinion was a reckless ruling that overturned
decades of precedent and threatens the health of the democratic
process. Citizens United laid down, for the first time, a sweeping new
right for special interests of all types. It said that money is speech
and corporations must have free speech. This directly overturns the
position taken in the Supreme Court's
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Austin v. Michigan Chamber of Commerce opinion, which recognized the
``corrosive and distorting effects of immense aggregations of wealth
that are accumulated with the help of the corporate form and that have
little or no correlation to the public's support for the corporation's
political ideas.'' But now, the Court says that if individuals have the
freedom to express themselves politically, then corporations, as well
as unions and other special interests, should have the same rights as
living, breathing human beings.
The DISCLOSE Act offers a significant step in countering this ill-
conceived opinion. Although the full reach of Citizens United cannot be
undone short of a constitutional amendment or reversal by the Supreme
Court, the DISCLOSE Act would achieve important accountability within
the bounds of the Court's ruling. In fact, even while a divided court
was striking down common sense limits on corporations, a nearly
unanimous court upheld disclosure requirements. Disclosure imposes ``no
ceiling on campaign-related activities.'' They said, ``disclosure
permits citizens and shareholders to react to the speech of corporate
entities in a proper way. This transparency enables the electorate to
make informed decisions and give proper weight to different speakers
and messages.''
But current disclosure laws were written for a time when corporations
couldn't flood the airwaves with commercials and drown out the voices
of individuals. Those laws need to be updated to mount a forceful
response to this new reality. With those floodgates open, the DISCLOSE
Act isn't just the smart thing to do--it is essential and it is
constitutional.
Citizens United is a decision that is deeply unpopular with the
American people--and for very good reason. The ruling unleashes a flood
of new money into an election system already awash with too much money,
too many special interests, and not enough accountability.
In February, a Washington Post-ABC News poll revealed that large
majorities across the political spectrum opposed the decision. Eighty
percent of respondents disagreed with Citizens United, with 65 percent
``strongly opposed.'' Even more remarkable, this number barely varied
between Democrats, Republicans, and Independents. Regardless of age,
race, education, or income, Americans disagree with this decision, and
large majorities want Congress to take action to resist corporate
influence of elections.
As part of the McCain-Feingold law, I worked with Senator Collins to
make politicians stand by their ads, and now the DISCLOSE Act seeks to
make corporations fulfill their civic responsibility in exactly the
same way. Also, the bill would make sure that CEOs can't hide behind a
trade association, or a shell company. In addition to a CEO disclaimer
appearing in an ad, the DISCLOSE Act requires the top five funders
behind an ad to be disclosed.
The bill would also make sure that TARP recipients and government
contractors are not allowed to use essentially public money to
influence elections. Finally, the bill would prevent foreigners from
buying ads to influence the outcome of U.S. elections. The DISCLOSE Act
seeks to protect the integrity of elections and to ensure that the
American people have full knowledge about the messages that are
delivered as part of political campaigns.
Contrary to critics' arguments, the DISCLOSE Act doesn't chill
speech. In fact, it encourages the flow of information. Speak your
mind, but let the public know who's doing the speaking. The marketplace
of ideas is open, but like any marketplace, it only functions if
everyone has the appropriate information. Without transparency, markets
fail. In large part, it was a lack of transparency that allowed shady
Wall Street deals to be perpetrated by Goldman Sachs and others at the
expense of average shareholders and bond purchasers.
Without the DISCLOSE Act, there would be nothing to stop Wall Street
firms from secretly funding a torrent of ads attacking the legislators
and candidates working to bring accountability to Wall Street. These
firms could covertly funnel money to a shell company or a trade
association, with no way for consumers to know who was really behind
those messages. Or, to use another example, BP could spend millions of
dollars attacking members of Congress who pushed for stiffer laws on
oil exploration and clean-ups, without revealing the source of the
funding.
This is not idle speculation. It is an absolute certainty that
special interests across the country will take full advantage of the
opportunity that Citizens United affords them to spend freely on
elections without disclosing their true identities. The only way to
maintain a free and open democracy is to close that loophole. The
American people are thoughtful and intelligent. If they know what
special interest is behind a barrage of commercials before an election,
they will understand the agenda and can evaluate the message
accordingly.
The DISCLOSE Act will shed sunlight on all the new money entering our
politics, and sunlight truly is the best disinfectant. I strongly urge
my colleagues to enable the will of the American people, to ensure that
corporations have the same responsibilities as people, and to guarantee
that citizens' voices aren't drowned out.
I thank the chair. I yield for Senator Bayh.
Mr. BAYH. Mr. President, I rise today to join my colleagues in
support of S. 3295, the Democracy Is Strengthened by Casting Light On
Spending in Elections, DISCLOSE, Act. I would like to thank Senators
Schumer, Feingold, Wyden, Franken, and Bennet for their hard work in
crafting this legislation and their efforts to help protect the
integrity of our political process.
I rise today to clarify the intent of our legislation. Opponents of
our efforts have asserted that our bill is intended to chill political
speech and discourage participation in the electoral process. Nothing
could be further from the truth. Our bill is about disclosure and
transparency. It is premised on the idea that democracy functions best
when citizens are fully informed. We trust the wisdom of the American
people and believe that they deserve to know all of the facts.
Throughout my career, I have supported efforts to increase
participation in our political process and worked to eliminate barriers
that unduly burden the fundamental right vote. That is why I
cosponsored legislation to make it easier for military and overseas
voters to vote in our elections, opposed Indiana's misguided voter
identification requirements, and cosponsored legislation to help
prevent the use of deceptive practices and voter intimidation.
I hope that our colleagues on both sides of the aisle will join us in
quickly passing this important legislation.
I now yield for my colleague, Senator Franken, who is deeply
committed to protecting the first amendment.
Mr. FRANKEN. I thank Senator Bayh. I also speak today in strong
support of S. 3295, the Democracy Is Strengthened by Casting Light on
Spending in Elections, also known as the DISCLOSE Act. In particular, I
want to talk about the provisions in title III that will create much
needed transparency and accountability in our elections system in
response to the Citizens United decision. That decision is widely
expected to trigger a new flood of campaign-related funds from
corporations, unions, trade associations, and nonprofit organizations.
In that ruling, the Supreme Court drastically changed our election
laws to allow unlimited corporate election spending from company
treasury funds. It did not, unfortunately, require those corporations
to disclose--to their shareholders, members, or the American public--
either where the money came from or how it was spent.
Title II of this bill makes sure American voters know who is behind
the election ads they see. Title III of the bill makes sure that the
people that paid for those ads--like shareholders and union members--
know how their money was spent.
After Citizens United, massive corporate campaign spending could be
funneled through innocent-sounding front organizations like Citizens
for the American Dream. That company's shareholders would never realize
that the spending occurred or was going to support causes or
organizations that they may not support. In short, Citizens United will
allow these corporations to avoid accountability for their campaign
expenditures from shareholders, voters, and the American public.
[[Page S3631]]
That is why title III of the DISCLOSE Act imposes disclosure
requirements on all campaign-related contributions made by a
corporation, union, or nonprofit--even contributions to another
organization. Under title III, whenever one of these organizations
makes a campaign expenditure, it will have to disclose that expenditure
on that organization's Web site within 24 hours of reporting it to the
Federal Elections Commission. It will also have to disclose that
expenditure to its shareholders, donors, or members in regular periodic
reports.
These disclosure requirements will allow shareholders and citizens
alike to make informed decisions about corporate campaign expenditures.
As the Supreme Court even noted in its Citizens United decision, ``the
prompt disclosure of expenditures can provide shareholders and citizens
with the information needed to hold corporations and elected officials
accountable for their positions and supporters.''
The Supreme Court rightfully noted that if corporations were to be
free to make campaign expenditures, shareholders must be able to know
where the corporation's money--their money--is going.
Citizens also have a strong interest in knowing which of their
elected officials or candidates for office is supported by corporate
interests. As the Supreme Court concluded, ``[t]he First Amendment
protects political speech; and disclosure permits citizens and
shareholders to react to the speech of corporate entities in a proper
way.'' This necessary transparency--the ability to know who is spending
money to influence elections and to respond accordingly--can only be
protected through the robust disclosure requirements of title III.
I want to underscore that nothing in title III is an attempt to
squelch or limit the court-protected speech of corporations or other
organizations. Transparency and accountability are necessary elements
of our marketplace of ideas. Citizens in a democracy need to know who
is supporting the ideas and causes before them. In Citizens United, the
Supreme Court made this point exactly, stating that the transparency
created by disclosure regimes ``enables the electorate to make informed
decisions and give proper weight to different speakers and messages.''
I believe that the disclosure requirements in title III will increase
political speech because they allow shareholders and citizens to know
more about the political process and engage those political actors who
would otherwise be unknown.
During the recent hearings on the DISCLOSE Act in the House of
Representatives, witnesses testified that the disclosure requirements
would be ``onerous'' for corporations that wish to spend corporate
treasury dollars to influence elections. One witness alleged that the
disclosure requirements would do little but inconvenience, burden, and
silence groups that would otherwise participate. They are saying that
this makes the DISCLOSE Act unconstitutional.
How onerous could it possibly be to disclose expenditures on your Web
site? If a corporation wanted to spend money in an election, why would
a simple reporting requirement stop them in their tracks? This just
doesn't make sense to me.
The government chills speech when it imposes penalties or limits on
speech that deter people from speaking. But the first amendment isn't
violated just because someone doesn't speak for fear of public
scrutiny.
Campaign disclosure rules have always had bipartisan support in this
Chamber. Full and timely disclosure of campaign expenditures should be
an ideal that all of us share, regardless of our disagreements over
other areas of campaign finance reform. American voters deserve and
need to know who is making campaign expenditures, and shareholders and
member of unions, trade associations, and nonprofits deserve and need
to know what is being spent on their behalf. Therefore I strongly
support the DISCLOSE Act, and title III in particular.
I thank the Chair. I now yield for my friend from Colorado, Senator
Bennet.
Mr. BENNET. Mr. President, I rise today in support of the Democracy
Is Strengthened by Casting Light on Spending in Elections Act--the
DISCLOSE Act. I would first like to thank Senator Schumer for his
leadership. This legislation is necessary as we work to fix
Washington's broken campaign finance system in response to the Supreme
Court's decision in Citizen's United v. FEC.
The credibility of our democracy is damaged by the status quo.
Because of the dysfunction in our campaign finance system, the voices
of special and entrenched interests drown out those of ordinary people.
Thousands of lobbyists line the Halls of Congress every day, and their
voices get heard. Only strong reform can begin to turn things around.
Campaign finance reform is something Congress has long needed to
address. The reforms of the past have proven insufficient and are
continually under assault in the courts. The Supreme Court did us no
favors with its decision in Citizens United. As a result of the Court's
decision, corporations and labor unions can now spend directly from
their general treasuries on the election or defeat of a specific
Federal candidate through election day. There are no prohibitions on
the timing or reach of these independent expenditures so long as they
are not coordinated with a campaign. As Justice Stevens wrote in his
dissent, ``the Court's ruling threatens to undermine the integrity of
elected institutions across the nation.'' I'm with Justice Stevens.
I strongly disagreed with the Supreme Court's decision because it
leaves individual Americans with an even smaller voice in our system.
This ruling rolled back sensible restrictions on corporate influence
that date back decades. It stacked the deck further against the
American people by unleashing a flood of special interest money in our
Federal elections.
Judicial activists on the bench undid decades of precedent at the
expense of our democratic process. Corporations, which after all are
not voters and do not have the same role in elections as individual
citizens, can now drastically influence the outcomes of our elections.
This is unprecedented and represents a threat to our democracy. A
floodgate of special interest money has now been opened and we are left
to deal with a number of damaging, foreseeable consequences.
Over the long run, I support a constitutional amendment to allow
Congress to regulate contributions and expenditures. But this is a very
heavy lift in a Senate that has trouble mustering the required 67 votes
on anything. We can't wait for a constitutional amendment to
materialize. We must act now to fix some of the egregious problems
opened up by the Citizens United decision.
If we let the Court's decision stand as is, then even foreign-
controlled corporations can use the aggregations of wealth inherent in
the corporate form to dominate our elections. While foreign nationals
and corporations have always been barred under traditional law from
contributing to campaigns or making independent expenditures, their
subsidiaries established in the United States are not covered by this
new prohibition. A subsidiary controlled by foreign nationals could run
ads impacting local elections. Petro China, with an estimated net worth
of $100 billion, could use its profits to purchase ads in congressional
races. Saudi Aramco, estimated to be worth $781 billion, could likewise
spend unlimited sums of money on independent expenditures to shape
public perception of a candidate.
Further, if we let the Court's decision stand as is, then we are in
jeopardy of institutionalizing pay to play politics or at least the
appearance of this. Government contractors, whose profits come from
taxpayer dollars, will now be able to spend freely to influence
elections. We already are struggling to address waste, fraud and abuse
in our government contracting. Citizens United will only make necessary
reforms more difficult, as government contractors can use taxpayer
dollars they receive from government contracts to attack supporters of
reform or support those who make it easier to obtain these contracts.
Mostly importantly, the Supreme Court's decision increases the role
of money in politics without any way to ensure voters are informed of
where this money is coming from. The demands of the money chase already
leave out many Americans with a desire to serve. Candidates will no
longer
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just have to raise funds to compete against their opponents, but will
also have to compete with independent expenditure campaigns conducted
by powerful special interests. This has the potential to influence the
positions a candidate takes and perception the public has of the
political process. Our elected officials will no longer be able to
focus on the big issues of the day for risk of opening the door for an
independent expenditure attack waged by a regulated interest.
What is more troubling is that current law provides for insufficient
transparency to ensure voters are aware of who is running these
independent expenditures. Special interests and their lobbyists, of
course, will know who is running these ads since they are going to use
them for leverage. Voters will be left in the dark.
We must utilize--to the fullest extent possible--the tools for
regulating campaign finance that the Court has provided for in Citizens
United and in prior decisions.
I am a proud cosponsor of the DISCLOSE Act because I believe it
addresses some of the unintended consequences of Citizens United and
emphasizes disclosure requirements, which the Supreme Court has
highlighted as ``the less-restrictive alternative to more comprehensive
speech regulations.'' This legislation is our best hope for ensuring
voters can make informed decisions and making sure our process isn't
corrupted or otherwise cheapened by the Court's new blunt restrictions
on our ability to protect the system from outside corrupting influence.
And so the DISCLOSE Act extends the existing prohibition on
contributions and expenditures by foreign nationals to domestic
corporations where: (1) a foreign national owns 20 percent or more of
voting shares in the corporation; (2) a majority of the board of
directors are foreign nationals; (3) one or more foreign nationals have
the power to direct, dictate or control the decisionmaking of the U.S.
subsidiary; or (4) one or more foreign nationals have the power to
direct, dictate or control the activities with respect to Federal,
State or local elections.
This prohibition is in line with current laws that prohibit foreign
nationals from making direct or indirect contributions to campaigns for
Federal, State or local elections. Under the law, the definition of
``foreign national'' exempts any person that is ``not an individual and
is organized under or created by the laws of the United States or any
State or other place subject to the jurisdiction of the United States
and has its principal place of business within the United States.'' The
FEC has concluded this exemption includes a U.S. corporation that is a
subsidiary of a foreign corporation, so long as the foreign parent does
not finance political activities in the United States and no foreign
national participates in any decision to make expenditures. The
DISCLOSE Act tightens this exemption and clarifies its reach in order
to prevent undue foreign influence. This provision makes sure the
Court's decision does not leave any possible opening for foreign
influence of our elections.
To address the potential for corruption or appearance of corruption
by government contractors which can now use their treasuries to
influence election results, the DISCLOSE Act bars government
contractors from making campaign-related expenditures. Under current
law, government contractors are already barred from making
contributions to influence Federal elections. If an individual is a
sole proprietor of a business with a Federal Government contract, he or
she may not make contributions from personal or business funds. The
DISCLOSE Act ensures that the intent of current law remains by
prohibiting the general treasury funds of government contractors from
being used to circumvent current restrictions. Further, bailout
recipients who have not repaid taxpayers cannot make campaign-related
expenditures until taxpayer money is repaid. This is in line with the
spirit of the government contractor provision since it prevents the
potential for corruption and abuse of taxpayer dollars by those who are
direct beneficiaries.
In its provisions for regulating foreign corporations and government
contractors, the DISCLOSE Act builds on restrictions already in place
under the law to make sure that the unintended consequences of Citizens
United do not come to fruition. These are necessary fixes.
The most important provisions in the DISCLOSE Act concern increased
transparency in our political process. Given the reality that Citizens
United has opened the door for unmitigated special interest money, it
is important that we make sure voters are aware whose money is being
used to influence their opinions.
The DISCLOSE Act expands disclosure requirements under current law by
requiring corporations, labor unions and a number of tax exempt
organizations to report all donors who have given $1,000 or more to the
organization in a 12-month period if the organization makes independent
expenditures or electioneering communications in excess of $10,000.
Further, leaders of corporations, unions and organizations covered are
required to stand behind their independent expenditure ads by appearing
on camera, as candidates for office are currently required to do. To
prevent money from being funneled to shell groups to avoid
identification, the top funder of ads must stand by the ad and issue a
disclaimer. The top five donors to a campaign-related TV ad will be
listed on screen.
Special interests are already attacking this provision as
unconstitutional. This is both unfortunate and false. As the Court
stated in Citizens United, the ``public has an interest in knowing who
is speaking about a candidate shortly before an election.'' Voters
should be able to weigh different speakers and messages accordingly.
Citing the Court's decision in Buckley v. Valeo, Justice Kennedy
wrote for the majority in Citizens United that ``disclaimer and
disclosure requirements may burden the ability to speak, but they
impose no ceiling on campaign-related activities or prevent anyone from
speaking.''
Under this rationale, the Court upheld disclaimer and disclosure
requirements under sections 201 and 311 of the Bipartisan Campaign
Reform Act of 2002, BCRA, as they applied to the movie that Citizens
United produced and the advertisements it planned to run to promote the
movie. The Court found the movie and its advertisements amounted to
``electioneering communication'' under BCRA and did not find there to
be evidence that the disclosure requirements would have a chilling
effect on donations by exposing donors to retaliation. Thus, the Court
removed the ability of funders for Citizens United to lurk in the
shadows while shaping public perspective. There is no doubt that the
Court would find a broadening of current disclosure laws and rules that
pertain to candidates to be appropriate.
The ability of the public to be informed of their choices in the
political marketplace is critical. Misinformation campaigns are already
an unfortunate reality of our politics. With the floodgates of special
interest money now fully open, the situation will only grow worse. The
least we can do is make sure voters can make informed decisions.
Although Citizens United has cast a dark cloud on Washington, Senator
Schumer is also proving that this deplorable decision also created the
impetus for action. The DISCLOSE Act is an opportunity to not only
prevent the worst of the unintended and the foreseeable consequences
from the Supreme Court's decision, but also improve the information
available to voters as they consider candidates and issues. This
legislation is a step forward for ensuring that the voices of
individual Americans are not drowned out. It is an opportunity to show
the public that we will not stand by and allow special interests to
continue to overwhelm Washington and the people's business.
I am proud to be joining Senators Schumer, Feingold, Wyden, Bayh and
Franken here today in support of the DISCLOSE Act. I ask all our
colleagues to join us in cosponsoring this legislation and bringing it
to the floor so that we can prevent further decay of our campaign
finance system and ensure voters are informed come election day.
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