April 30, 2014

Challenges Posed by ‘Dark Money’ and the McCutcheon Decision: Potential Remedies

April 30, 2014

Challenges Posed by ‘Dark Money’ and the McCutcheon Decision: Potential Remedies

Public Citizen Submits Testimony to Congress Outlining Key Steps Needed to Combat Supreme Court’s Dismantling of Campaign Finance System

WASHINGTON, D.C. – Congress should take several key steps to address recent U.S. Supreme Court decisions that are giving control of elections to the wealthy and corporations, Public Citizen said in testimony (PDF) to lawmakers today.

The U.S. Senate Committee on Rules & Administration is holding a hearing, “Dollars and Sense,” exploring ways lawmakers can deal with “dark money” – undisclosed money funneled through trade associations and other groups to influence elections – which exploded after the 2010 Citizens United v. Federal Election Commission (FEC) ruling.

The committee also will brainstorm what campaign finance transparency legislation Congress should pursue in the wake of the recent Supreme Court-ordered end to aggregate contribution limits. On April 2, in McCutcheon v. FEC, the court struck down limits on the total amount individuals can give candidates, political parties and political committees.

“In one whack after another, five justices of the Supreme Court are attempting to bludgeon campaign finance laws that have evolved and served the nation for well over 40 years,” said Craig Holman, government affairs lobbyist for Public Citizen’s Congress Watch division. “The latest McCutcheon decision vests millionaires and billionaires with the special right to make millions of dollars in campaign contributions – a right available only to those who can afford it.”

Prior to the McCutcheon decision, an individual could contribute up to a total of $123,200 per election cycle to all federal candidates and committees combined, with sublimits of $48,600 to all candidates and $74,600 to all political committees and parties. Following McCutcheon, the sky is the limit, allowing wealth donors to contribute up to $5.9 million to federal candidates, parties and committees – a dollar figure limited only by the number of candidates running for office.

“The time is ripe for swift and decisive congressional responses to mitigate the damage caused by the Citizens United and McCutcheon decisions,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “Citizens across the country, of every political stripe, are infuriated with the unlimited and undisclosed money rapidly drowning out the public voice in elections, and are demanding reasonable limits and full disclosure of money in politics.”

Public Citizen recommends that Congress take a number of steps, including:

• Enhance transparency of money in politics by making full use of the ease of electronic filing and mandating 48-hour disclosure of significant campaign contributions and expenditures.

• Ban or restrict “joint fundraising committees,” which under McCutcheon are likely to become the preferred fundraising vehicle for major donors and the greatest potential source of corruption.

• Strengthen the ban on direct candidate solicitations of contributions in excess of candidate limits and extend the ban to include prohibiting candidate appearances (and appearances by representatives of candidate committees) at any fundraising event in which contributions in excess of candidate limits are being solicited. This would apply to both super PACs and joint fundraising committees.

• Encourage the Securities and Exchange Commission to adopt a rule mandating disclosure of corporate political spending by publicly held companies, and the IRS to move ahead with rulemaking that would provide “bright lines” definitions of political intervention by nonprofit organizations and enforce the current law prohibiting 501(c)(4) nonprofit organizations from making more than de minimis political expenditures.

• Approve legislation that would enhance transparency of money in politics, such as the Bright Lines Project legislative proposal that clearly defines political intervention for nonprofit organizations to reduce the discretion of the IRS in such evaluations.

• Submit to the states for ratification a constitutional amendment that clarifies for the Supreme Court what the First Amendment really means.

Read Public Citizen’s testimony.

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