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Public Citizen to Congress: Legislation to Restrain Corporate Election Spending Is Crucial for Democracy

May 6, 2010
Public Citizen to Congress: Legislation to Restrain Corporate Election Spending Is Crucial for Democracy

Public Citizen Supports the DISCLOSE Act, Recommends Strengthening It

WASHINGTON, D.C. – Before the 2010 elections, Congress should approve legislation designed to restrain corporate election spending and close the loopholes of current campaign finance laws, Public Citizen told the Committee on House Appropriations today.

The DISCLOSE Act (H.R. 5175), which stands for Democracy is Strengthened by Casting Light on Spending in Elections, was introduced in the House of Representatives by Rep. Chris Van Hollen (D-Md.) and in the Senate by Sen. Charles Schumer (D-N.Y.). It would restrict foreign influence in American elections, strengthen pay-to-play law and provide the most extensive transparency regime to date. That said, the bill must be strengthened, said Craig Holman, government affairs lobbyist with Public Citizen, in his testimony.

“This legislation helps to combat the onslaught of corporate-funded campaign ads that are expected after the Supreme Court’s decision in Citizens United v. Federal Election Commission, which allows corporations to spend unlimited amounts to influence elections,” Holman said. “Today, corporate lobbyists can walk into a lobbying meeting carrying a big stick to intimidate lawmakers. A healthy democracy is going to have a hard time surviving this corporate onslaught without meaningful measures to mitigate the corrupting role of unlimited corporate money.”

The U.S. Chamber of Commerce is gearing up for a massive spending campaign in state judicial contests as well as federal congressional races in 2010. It’s already begun the effort; in the Massachusetts special election in January 2010, the Chamber spent about $1 million in corporate funds on so-called issue ads in the final days of the U.S. Senate campaign to help elect Scott Brown.

That’s just the beginning. The Chamber has pledged to take advantage of the new absence of constraints on corporate money in elections and further bolster its corporate revenues for political activity. It boasts that it will spend about $200 million on politics this year – double what it spent last year – with about $50 million of that money funneled into state judicial and federal congressional elections.

“Add to that figure the money countless corporations will pour into the election,” Holman said. “It is starting to paint a picture of corpocracy over democracy, isn’t it?”

Some highlights of the DISCLOSE Act, as it stands, include requiring:

* Corporations, labor unions, nonprofit groups and political organizations that spend more than $10,000 on electioneering to report all donors who have given $1,000 or more, unless the donor specified that the donation could not be used for election purposes;
* Groups that sponsor broadcast ads to include a “stand by your ad” disclaimer in which the groups’ highest ranking official appear and approve the message; and
* Groups that make campaign-related expenditures to disclose them on their Web page within 24 hours.

The DISCLOSE Act is a great first step to reining in the corporate power expected to take over elections, Holman said. But it must be strengthened. The legislation should borrow more from states’ experiences involving pay-to-play (a system that prohibits government contractors from making political contributions and expenditures on behalf of those issuing the contracts) to make the provisions more far-reaching. The bill also should require disclosure outside of the time periods outlined in the bill, Holman said.

In addition, Public Citizen encourages Congress to proceed with bolder measures that would:

* Provide candidates with substantial public financing for their campaigns to help offset new corporate spending in elections (Fair Elections Now Act, H.R. 1826 and S. 751).
* Require that any significant corporate expenditure in politics be approved by a majority of outstanding shareholders (Shareholder Protection Act, H.R. 4790).
* Promote a constitutional amendment that clarifies that First Amendment protections do not apply to for-profit corporations, except for legitimate media organizations, and that corporations therefore do not have the right to spend unlimited amounts of money to influence election outcomes. Shortly after the Citizens United ruling was issued, Public Citizen launched a campaign for a constitutional amendment. It currently has more than 52,000 signers (see www.DontGetRolled.org).