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‘Dark Money’ and the McCutcheon Decision: Roberts Court Provides Guidance for FEC Rulemaking

Jan. 15, 2015

‘Dark Money’ and the McCutcheon Decision: Roberts Court Provides Guidance for FEC Rulemaking

WASHINGTON, D.C. – In testimony (PDF) submitted today to the Federal Election Commission (FEC), Public Citizen invoked the instructions of the U.S. Supreme Court to guide the agency’s rulemaking in response to the McCutcheon v. Federal Election Commission decision. Chief Justice John Roberts’ guidance in that decision includes the call for full transparency of money in elections, stronger coordination and earmarking rules to capture single-candidate PACs and limits on joint fundraising committees.

“The damage done to our democratic system by the Citizens United and McCutcheon decisions has been even worse than feared,” said Craig Holman, government affairs lobbyist for Public Citizen. “The Roberts court recognized some of the damage that might ensue and suggested important regulatory responses to rein in part of that damage. The FEC should listen.”

In the April 2014 McCutcheon decision, the same bloc of five justices who said in 2010’s Citizens United decision that corporations may spend unlimited amounts to influence elections ruled that the nation’s aggregate contribution limits also were unconstitutional. Prior to McCutcheon, an individual could contribute up to $123,200 per election cycle to all federal candidates and committees combined. The decision voided the aggregate limit, allowing a wealthy donor to contribute up to $3.6 million in an election cycle to the candidates and committees of a single party, and up to $5.9 million if officeholder leadership PACs are included in the calculation.

However, in both Citizens United and McCutcheon, the court praised the value of full transparency of money in politics.

“First and foremost, where the FEC has deviated most sharply from the court is over disclosure,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “The court has consistently upheld disclosure laws and even touted the virtue of disclosure for mediating damages from the new flood of campaign money. Yet the FEC has gutted the disclosure requirement.”

Public Citizen calls upon the FEC to restore the full disclosure system that was in place before the agency began to dismantle it in 2007, when it revised its disclosure rules to mandate disclosure only of contributions earmarked for campaign ads, leaving all other donors to an electioneering group outside the disclosure requirement.

The McCutcheon decision poses another serious problem for campaign financing: circumvention of the remaining individual contribution limits. Wealthy donors can now get around the existing contribution limit of $2,600 per candidate by earmarking large amounts of money to support the candidate through other groups or joint fundraising committees.

Citing the advice of Roberts in McCutcheon, Public Citizen strongly encourages the FEC both to strengthen its coordination rules to prevent multiple political action committees from supporting just a single candidate, and to limit the amount a single joint fundraising committee can pull in for congressional leaders and party bosses.

Read Public Citizen’s testimony to the FEC (PDF).