Corporations are People?

ETHICS

Casting Light On Corporate Influence

In January, the Supreme Court struck down a 63-year old ban on corporate money in elections in the Citizens United case, clearing the way for corporations, unions, and advocacy groups to anonymously spend unlimited amounts of money on political campaigns. The decision drew instant criticism from government transparency watchdogs, consumer advocates, legal scholars,  and even some businesses which warned that the ruling would lead to a flood of corporate money into politics that would allow deep-pocketed organizations to "drown out any voices that disagree with them." President Obama called the decision a "huge blow to our efforts to rein in this undue influence," and Democratic lawmakers set to work crafting legislation to limit corporate political influence. Meanwhile, Republicans and corporate lobby groups hailed the decision as victory for free speech, even while polls showed that "Americans of both parties overwhelmingly oppose" the ruling. After months of work, Senate Democrats, along with Rep. Chris Van Hollen (D-MD), and Republican Reps. Mike Castle (DE) and Walter Jones (NC), unveiled a sweeping campaign finance reform bill Thursday to address the Citizens United ruling. The DISCLOSE Act (Democracy is Strengthened by Casting Light on Spending in Elections) aims to increase transparency and accountability in campaign finance, so voters will know who is behind political advertisements. Obama lauded the bill, calling it the "toughest-ever disclosure requirements for election-related spending by big oil corporations, Wall Street and other special interests...trying to buy representation in our government." The bill's lead sponsor in the Senate, Charles Schumer (D-NY), said the legislation was designed to affect this fall's election "in every way," and Senate Majority Leader Harry Reid (D-NV) pledged to bring the bill to the floor before July 4. The House Administration Committee will hold the first hearing on the bill this Thursday.

LET THE SUNSHINE IN: The bill has a number of provisions to limit and expose corporate, union, and activist groups' political spending. Foreign corporations and their domestic subsidiaries would be barred from any electoral spending, as would companies that received funds from the Troubled Asset Relief Program (TARP) and have failed to pay them back. The bill also extends the electoral spending ban to government contractors with contracts worth more than $50,000. It cracks down on front groups designed to conceal the source of political spending by mandating that an ad's top funder record a "stand-by-your-ad disclaimer" similar to current candidate ads and the top five donors "be listed on the screen at the end of the advertisement." Money transferred to front groups by corporations for the purpose of making campaign ads would now be considered campaign spending, and thus subject to stricter disclosure rules. The bill would also require the CEO or highest ranking officer of an organization to appear on camera to say he or she "approves this message," just as candidates are required to do now. Political expenditures would also have to be "disclosed to shareholders and members of the organization in any financial reports." Moreover, the bill helps level the playing field by requiring that "broadcast, cable and satellite outlets to provide candidates the lowest rates and adequate airtime should a corporation or union buy airtime to support or oppose that candidate." The Sunlight Foundation said the legislation would "shine a powerful light on...corporate political expenditures," while Citizens for Responsibility and Ethics in Washington heralded the bill as way to "ameliorate the most devastating effects of Citizens United."

THE PUSHBACK: Not surprisingly, many corporations and their political front groups quickly mobilized to oppose the bill. U.S. Chamber of Commerce President Tom Donohue immediately condemned the bill as an attempt to "silence constitutionally protected speech." Donohue may feel threatened because the DISCLOSE Act undermines the very purpose of the Chamber: to attack progressive reforms while concealing the corporate money behind those attacks. "I'm not sure what their problem is with transparency, but clearly they are uncomfortable operating in sunlight," Van Hollen said of the Chamber. The Center for Competitive Politics, one of real estate tycoon Howie Rich's many anti-government advocacy groups, joined the assault, absurdly arguing that the "stand by your ad" mandate "provide[s] no informational benefit and reduce[s] the amount of available political speech." Meanwhile, the Cato Institute -- an anti-government think tank founded by oil magnate Charles Koch and funded by his brother David -- decried the bill as a "gambit to chill speech." All three groups spend huge amounts of money on various political activities without disclosing the true source of the funds, and notably, all filed amicus briefs to the Supreme Court on behalf of Citizens United. The National Association of Broadcasters is also objecting to the provision that requires broadcasters give candidates less expensive ad rates, even while they stand to "reap enormous profits from an increase in political ads from companies and interest groups -- organizations that will be paying the full price for the air time," the Washington Independent's Mike Lillis points out. Schumer was unable to get a single Senate Republican to co-sponsor the bill -- though he said he is still courting Olympia Snowe (ME) -- and Republicans contacted by The Hill for comment were "reluctant to publicly support the bill." Senate Minority Leader Mitch McConnell (R-KY) blasted the legislation as being about "election advantage plain and simple," not reform or good government, without providing more detail. McConnell strongly opposed the McCain-Feingold Act, which eventually led to the 2003 Supreme Court case McConnell v. Federal Election Commission, which challenged the constitutionality of the campaign finance law.

THE NEED: As ProPublica noted in an investigation published yesterday, the Supreme Court based its Citizens United decision "in part, on the assertion that campaign finance records are more open and accessible than ever before." "With the advent of the Internet, disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters," Justice Anthony Kennedy wrote in the court's majority opinion. But using fundraisers during a pair of Bruce Springsteen concerts as a test case, ProPublica found that it was nearly impossible to determine out "who attended the fundraisers or how much money was raised." Only through a leaked email, an extensive records search, and advanced reporting was ProPublica able to find the relevant information -- hardly something an average citizen would have the time or expertise to do. An ad recently released by a corporate front underscores the problem. The racially tinged ad features actors portraying Indians thanking Arkansas Senate Democratic primary candidate Bill Halter for supposedly sending jobs to Bangalore. The ad is sponsored by Americans for Job Security (AJS), which most viewers would never realize is actually a "sham front group that would be better called Corporations Influencing Elections," as Public Citizen noted, with strong ties to the Chamber of Commerce. AJS has run multi-million dollar advertising campaigns for repealing the estate tax and against the Employee Free Choice Act. In addition to being offensive, the ad is "patently false," but there is currently no way to hold AJS's corporate backers responsible, or of even knowing who they are.