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Appeals Court to secret donors: Face the American people

Even as the nationwide grassroots rebellion sparked by the Supreme Court’s ruling in Citizens United v. Federal Election Commission continues to spread, citizens concerned that our  democracy is being auctioned off to secretive, unaccountable interests are getting some backup from the lower federal courts. On Monday afternoon, a panel of the DC Circuit Court of Appeals refused to stay the opinion of the district court that effectively closed – for the time being, at least — a regulatory loophole that allowed wealthy individuals and corporations funding so-called “issue ads” in the lead-up to an election to avoid disclosure, so long as they gave to “charitable” non-profit groups started by “philanthropists” like Republican political strategist Karl Rove.

Last month, a lower court found that the 2007 Federal Election Commission (FEC) regulation that created the loophole “arbitrarily and capriciously” undermined the law’s clear intent to force disclosure, one that even the Citizens United ruling affirmed. By declining to stay that ruling, and finding in the process that it will likely be upheld when it is argued on its merits this fall, the appeals court ensured that donors of more than $1,000 for electioneering communications previously shielded from the public eye are going to have to face disclosure.

This week’s ruling comes in the midst of a loud wave of shareholder activism demanding that corporate leaders stop meddling in electoral politics, and to at least fully disclose what they’re up to if they continue.

Meanwhile, states and local communities are continuing to demand a constitutional amendment that ends the auctioning of our democracy once and for all, by overturning Citizens United and related cases. Tuesday night, the Rhode Island General Assembly became the fifth state legislature to get behind an amendment; cities and towns across the country like Seattle, WA; Evanston, IL; and Hartford, CT continue to echo that call on (literally) a daily basis.

Of course, there’s no guarantee that the notoriously-divided FEC will take meaningful action to craft and enforce new rules. There’s still a possibility that the Supreme Court will grant a stay after all, but that is not likely. The very disclosure law that the district and appellate courts have upheld was even cited by Justice Kennedy in the Citizens United decision as a good thing that would help off-set any damage caused by unlimited corporate spending. More likely, such groups will shift their campaign spending from “electioneering communications,” where donors must now be disclosed, to “independent expenditures,” which still hide behind the anti-transparency rules of the FEC and were not subject to the court ruling.

And deep-pocketed donors and the organizations doing their will are bound to find ways to work around the new disclosure requirement for electioneering communications as well. In fact, they started plotting out potential shortcuts the other month, as Dan Froomkin and Paul Blumenthal report:

The April ruling already prompted one group, the conservative American Future Fund, to ask for an advisory opinion on whether they could continue to keep their donors secret as long as they used “White House” or “administration” in their ads rather than “Obama.”

Make no mistake about it, however: Monday’s ruling is a big victory for greater transparency, and will definitely make some of the corporate interests that have been shelling out record amounts since Citizens United was handed down think twice about the potential to be exposed to a public that is sick and tired of being drowned out by the rich and powerful.

In the end, we need a constitutional amendment to finitely overcome any loopholes and get the corrosive influence of money out of the decision-making process. But sunlight is a strong, and welcome, disinfectant that stands, at the very least, to facilitate public scrutiny of those who have attained unprecedented influence over elected officials in recent decades.

Sean Siperstein is a Legal Fellow with Public Citizen’s Democracy is For People campaign. Follow the campaign on Twitter @RuleByUs, as well as the hashtag #Democracy4 Sale, for the latest on the money and politics and the campaign for a constitutional amendment!