[Congressional Record (Bound Edition), Volume 156 (2010), Part 6]
[Senate]
[Pages 7901-7906]
[From the U.S. 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

[[Page 7902]]

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 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

[[Page 7903]]

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 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

[[Page 7904]]

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.
  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.

[[Page 7905]]

  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 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

[[Page 7906]]

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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