[EL] “Petition for Disclosure on Political Spending Gains Support”

[Smith, Brad]

Allen Dickerson and I address the issue from an administrative law perspective in the Harvard Business Law Review: http://www.hblr.org/wp-content/uploads/2013/10/HLB208_crop.pdf. It's part of a very good symposium on corporate political spending.

As Craig's post indicates, this is part of an effort to get the SEC further involved in regulating campaign finance, something beyond both its mission and its expertise. That's what our article, "The Non-Expert Agency," addresses.

Bradley A. Smith

Josiah H. Blackmore II/Shirley M. Nault

   Professor of Law

Capital University Law School

303 E. Broad St.

Columbus, OH 43215

614.236.6317

http://law.capital.edu/faculty/bios/bsmith.aspx

________________________________________
From: law-election-bounces at department-lists.uci.edu [law-election-bounces at department-lists.uci.edu] on behalf of Craig Holman [holman at aol.com]
Sent: Wednesday, November 13, 2013 10:22 AM
To: joseph.e.larue at gmail.com; law-election at uci.edu; rhasen at law.uci.edu
Subject: Re: [EL] “Petition for Disclosure on Political Spending Gains Support”

Through deregulation and lack of enforcement, very little is left of what by all rights should be a very robust transparency law established by BCRA.

The law itself is quite clear that the sources of funds behind campaign ads are subject to disclosure. Section 201 of BCRA, for example, lays out the disclosure requirements for groups funding electioneering communications. BCRA clearly states that all major donors to the person making the electioneering communication must be disclosed, not just those who contributed for a campaign ad. The provision reads in part: “Every person who makes a disbursement for the direct costs of producing and airing electioneering communications in an aggregate amount in excess of $10,000 during any calendar year shall, within 24 hours of each disclosure date, file with the Commission a statement containing . . . the names and addresses of all contributors who contributed an aggregate amount of $1,000 or more to the person making the disbursement during the period beginning on the first day of the preceding calendar year and ending on the disclosure date.

The FEC altered its disclosure regulation interpreting the law at the end of 2007 requiring an entity that makes electioneering communications to disclose “the name and address of each person who made a donation aggregating $1,000 or more to the corporation or labor organization, aggregating since the first day of the preceding calendar year, which was made for the purpose of furthering electioneering communications.” BCRA makes no such exception.

As a result, this language has recently been interpreted by a growing number of outside groups to mean that only those donors who specifically “earmark” funds for a campaign ad need be disclosed -- which has meant a dramatic fall in donor disclosure from nearly 100% donor disclosure in 2004 and 2006 to about half that today. This requirement that only donors who earmark their funds for campaign ads has been extended by the FEC to independent expenditures as well as electioneering communications. The public (and shareholders, unless a corporation has its own internal voluntary disclosure rules) is now left in the dark as to who is funding the groups that sponsor electioneering communications and independent expenditures.

It is largely suspected -- though it cannot be documented because of the lack of disclosure -- that most of this "dark money" comes from corporate treasury accounts.

The petition before the SEC requests rulemaking to establish transparency for shareholders as to how a corporation's CEO is spending their money on electioneering communications and independent expenditures funneled through outside groups as well as contributions to lobbying campaigns.



Craig Holman, Ph.D.
Government Affairs Lobbyist
Public Citizen
215 Pennsylvania Avenue SE
Washington, D.C. 20003
T-(202) 454-5182
C-(202) 905-7413
F-(202) 547-7392
Holman at aol.com


-----Original Message-----
From: Joe La Rue <joseph.e.larue at gmail.com>
To: law-election <law-election at uci.edu>; Rick Hasen <rhasen at law.uci.edu>
Sent: Wed, Nov 13, 2013 7:06 am
Subject: [EL] “Petition for Disclosure on Political Spending Gains Support”

Regarding this:

“Petition for Disclosure on Political Spending Gains Support”<http://electionlawblog.org/?p=56699>
Posted on November 12, 2013 8:34 pm<http://electionlawblog.org/?p=56699> by Rick Hasen<http://electionlawblog.org/?author=3>
WSJ reports.<http://blogs.wsj.com/cfo/2013/11/12/petition-for-disclosure-on-political-spending-gains-support/>

I'm confused.  Don't corporations already have to disclose their independent expenditures, the same as everyone else?  I'm not sure that it's always "voluntarily," as the author says.  But it is done, isn't it?  And, if so, what's the point of this proposal, other than more regulation and more hoops for those who want to engage in political speech to jump through?  Am I missing something?

Joe
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Joseph E. La Rue
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email: joseph.e.larue at gmail.com<mailto:joseph.e.larue at gmail.com>


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