Public Citizen Urges FEC to Close Its Donor Disclosure Loophole

March 4, 2019

Public Citizen Urges FEC to Close Its Donor Disclosure Loophole

Court Orders Agency to Rewrite Its Faulty Disclosure Rules for Independent Expenditure

WASHINGTON, D.C. – The U.S. Federal Election Commission (FEC) must comply with a court order and fix its regulations that allow corporations and groups that raise money for federal candidates to keep their donors secret, Public Citizen told the agency today.

In CREW v. FEC, a federal district court ruled in 2018 that the agency’s disclosure regulation that allows independent expenditure groups – which expressly advocate for or against a federal candidate – to conceal their donors violates the intent and plain language of federal campaign finance laws.
Under federal regulations, such groups must disclose donors who make contributions in excess of $200 to “further the purpose” of the independent expenditure campaign. However, the FEC interpreted this provision to put the burden on the donor to specify that the contribution should be subject to disclosure, a type of self-regulation that allows big money donors to easily go unaccounted for.

“No one earmarks their campaign contributions for a specific purpose,” said Craig Holman, government affairs lobbyist for Public Citizen’s Congress Watch division. “Donors give money to campaigns and expect it to be used for campaign purposes.”

The result of this narrow earmarking donor disclosure rule has been devastating for transparency of money in politics, Holman said. Immediately following this rule in 2007, the total amount of “dark money” in federal elections jumped from $5 million in 2006 to $102 million in 2008, and has grown even higher since.

“Dark money has become a scourge in our elections, allowing nondescript groups to raise and spend huge sums of corporate and special interest money for campaign ads, while refusing to tell  the public who is paying to influence their vote,” said Lisa Gilbert, vice president of legislative affairs for Public Citizen. “Knowing where the money comes from is a valuable voter’s cue in judging the merit of the message.”

Read Public Citizen’s comment here.