Corporate and labor union political spending disclosure requirements compared in new Public Citizen publication
By Adam Crowther and Taylor Lincoln
Today, Public Citizen released an in-depth fact sheet on the similarities and discrepancies in reporting requirements imposed on unions and corporations for their political spending.
Given all the hand wringing by Republicans over allegations that the rules are tilted in favor of unions, the information will likely surprise you. In fact, unions already are subject to significant public reporting requirements that pertain solely to them, whereas corporations are not.
The sources of about one-fourth of outside spending in all 2012 federal races—and about half of outside spending in key Senate races—were kept secret. The DISCLOSE Act (S. 3369) would fix most of this. But here too, the solution is being held up by Republican complaints that the measure is stacked against corporations.
The rational invoked by Sen. John McCain (R-Ariz.) is a key example of this type of complaint. Even McCain, a longstanding champion of campaign finance reform and a vocal critic of Citizens United v. Federal Election commission (he has called it “the worst decision of the United States Supreme Court in the 21st century”), has opposed this seemingly common-sense bill.
McCain’s explanation for voting against the bill was that its $10,000 threshold (per two-year election cycle) for disclosure of political contributions represented a “a clever attempt at political gamesmanship” by forcing “some entities to inform the public about the origins of their financial support, while allowing others—most notably those affiliated with organized labor—to fly below the Federal Election Commission’s regulatory radar.”
The $10,000 threshold would unfairly target corporations, McCain argued, because union funds tend to represent a portion of aggregated union dues of far smaller amounts. “What is the final difference between one $10,000 check and 1,000 $10 checks?” McCain asked in a statement accompanying his vote against the bill. “Other than the impact on trees, very little.”
But the difference is very significant, as McCain no doubt is well aware. Much of election law is based on the premise that large contributions have more potential to cause corruption than small ones. This is the reason for contribution limits and disclosure thresholds. Contributions to candidates have been capped at relatively modest amounts relative to overall campaign costs since modern election laws were instituted in the wake of the Watergate scandal. (At present, an individual is limited to contributing $2,500 per election to a candidate.)
Likewise, the law requires disclosure of contributions of $200 or above to candidates and conventional political action committee, while smaller contributions do not have to be disclosed. McCain almost certainly accepts the corruption theory that underlies these laws.
McCain’s allegation that the bill’s thresholds were cleverly set to favor unions also lacks merit.
A scenario could exist in which a reporting threshold was intentionally designed to affect one type of organization and not another, thus creating an illusion of fairness. But that does not appear to be the case here. Union dues are so small that political contributions by individual union members do not get anywhere near $10,000. For instance, according to its required report to the government, AFL-CIO members’ dues are just $9 per month, and the union uses only a fraction of that for political expenditures. If the authors of DISCLOSE were trying to maximize corporate disclosure while exempting unions, they would have chosen a threshold far below $10,000.
A spokesman for Sen. Sheldon Whitehouse (D-R.I.), the author of the Senate version of the DISCLOSE Act, said in a statement to Public Citizen that the $10,000 threshold was selected to “reduce the burden as much as possible for all covered organizations while still having meaningful disclosure.” In other words, a high threshold was chosen to minimize the burden on organizations in general, not to assuage unions. Whitehouse’s office also expressed the senator’s willingness to compromise with McCain.
In reality, most supporters of campaign finance reform would consider a $10,000 threshold too high, not because it provides an unfair advantage to unions over corporations, but because it provides an additional unfair advantage to groups that operate outside the conventional campaign finance system over those that are subject to conventional limits.
Citizens United already has granted an unfair advantage to outside entities by stipulating that their expenditures—and thus contributions to them—may not be limited. The single nod that Citizens United gave to advocates of a regulated campaign finance system was the decision’s wholehearted endorsement of disclosure. It is difficult to find justification in a system that affords unrestricted outside entities more permissive disclosure rules than those that are required to abide by contribution limits.
Still, any comprehensive disclosure regime that mandates reporting would be a vast improvement over the Wild West reality that has prevailed during the last two election cycles, even if the threshold were set as high as $10,000.
A simple solution would be to offer those who claim inequity the opportunity to choose the threshold for which political contributions would need to be disclosed. Any threshold between the conventional $200 level and the $10,000 proposal in DISCLOSE should be accepted.
Urge your members of Congress to support disclosure and other reforms to combat the effects of Citizens United.
Adam Crowther is a Researcher for Public Citizen’s Congress Watch. Taylor Lincoln is Research Director for Public Citizen’s Congress Watch.