September 21, 2010

DISCLOSE Act needed to stop secret donations

The New York Times provided readers with yet another reason to support a campaign finance disclosure act today. In the aftermath of the Supreme Court’s Citizens United decision, groups registered as 501(c)(4) nonprofits are able to funnel millions of dollars into political campaigns without ever naming any of their primary contributors.

Though federal law says that more than 50 percent of a 501(c)(4)’s activities cannot be political, groups such as Crossroads Grassroots Policy Strategies (which Karl Rove has helped raise money for) can side step this requirement thanks to their ability to keep donor names secret.

In 2004 and 2006, virtually all independent groups receiving electioneering donations revealed their donors. In 2008, less than half of the groups reported their donors, according to a study we released earlier this month.

The Times also stated most privately held corporations are advertising for Republican candidates through 501(c) organizations instead of directly sponsoring advertisements themselves.

Regulating these groups through the IRS is unlikely and difficult. Most of these groups are “not required to seek the agency’s approval until they file their first tax forms more than a year after they begin activity.” This means the IRS. won’t even know they exist.

The Citizens United vs. Federal Election Commission decision allowed for a flood of corporate spending into campaigns; The DISCLOSE Act, which would require groups paying for political ads to identify their donors, may be the best way to regulate this, short of a constitutional amendment to overturn Citizens United. Without having to identify donors, political groups disguised as nonprofits will continue to play a major role in upcoming elections.