July 21, 2010

The FEC AO: Why Existing Disclosure Law Won't Disclosure Be Adequate

A number of people, both on the election law listserv and in private messages, have quarreled with my earlier blog post about the FEC AO and disclosure: the argument they make is that there will be disclosure of contributions to IE committees, so where's the problem. Here's an edited version of a response on that point which I sent to the listserv:
We have never had the situation before on the federal level where people, and now presumably corporations and labor unions, could make large---indeed unlimited---contributions to fund independent expenditures. But we have had similar contributions in other contexts: contributions to 527s on the federal level, and contributions to ballot measure committees in California. In my view, there is a problem when wealthy donors, particularly non-human entities such as corporations and labor unions, can hide their donations behind innocuous sounding groups, like "Americans for American Values." (Especially prevalent will be the use of multiple levels of committeees. Though the information on contributions will be available through the FEC website, in my view this level of disclosure is inadequate. It is only when the disclosure of the largest contributor(s) is on the face of the advertisement (what some term a "disclaimer") that the disclosure is adequate.

Undisclosed donations will be especially important to corporations. Many corporations won't want to alienate many of their customers by having their corporate names associated with advertising against a candidate. But they'll be more than happy to participate if they can obscure their identity. This is what I expect to happen under the new AO.
We saw recently in California just how important such disclosure is. I have little doubt that the anti-public utility ballot measure (Prop. 16), backed almost exclusively by private utility PG&E and misleadingly marketed as a "right to vote on taxes measure," would have passed but for the prominent disclaimers required by California law letting voters know that PG&E was a major backer of the initiative.

Existing federal law will not provide such a disclaimer. There are also other problems with groups using numbers of committees to try to obscure the true identity of the spender. So I don't believe existing federal disclosure law is up to the task..

Watch this ad and you can see the kind of disclosure I think we need desperately.
So what should happen now? I'd love to see Democrats abandon the broader DISCLOSE Act for this term, and focus on a narrower bill that would deal specifically with this type of problem. I'd like to see moderate Republicans come forward too to support this. (Doesn't Senator McCain remember what "Republicans for Clean Air" did to him in the 2000 presidential primaries?) I don't hold much hope that either Republicans or Democrats will step up, but that's what I'd like to see happen.

Posted by Rick Hasen at July 21, 2010 10:08 AM