DISCLOSE Act: What The NRA Exemption Means For The Integrity Of The Citizens United Fix (Update)
Update 6/15/2010: Political hay is being made this week over the decision of Congressional Democrats to bend to the wishes of the National Rifle Association and provide that organization with an exemption on some of the disclosure provisions in the bill. The push for an exemption was led by a North Carolina Democrat in the House, Heath Shuler. For what it's worth, Shuler's 3rd largest political donor during his career is the Blue Dog PAC, which does receive funding from the NRA.
The claim that campaign funds overtime have compelled Shuler to campaign for the NRA against the DISCLOSE Act is one that is worth exploring, but it ultimately elides the larger issue of external perception and public trust. As Lawrence Lessig stresses, it is the appearance of improper influence that so plagues the U.S. Congress and sullies any trust it could have with the people who elect it. The problem is not outright graft, but institutional corruption whereby the incentives for elected officials are perversely aligned, leading them to spend too much time making promises to special interests and not enough time governing (to say nothing of their susceptibility under the current system to entirely undisclosed threats from heavy corporate hitters).
As discussed below, the DISCLOSE Act was already going to fall far short of sparing the 2010 campaign field from the effects of Citizens United, but it could have at least served as a symbolic gesture for transparency and as a first, sturdy stem towards further-reaching reforms down the road. The fact that Democrats must now resort to exemptions in order to pass it -- whether or not it indicates undue influence -- will defeat any symbolic purpose it may have had, while further eroding the trust of the institution. We're now neck-deep in farce.
4/16/2010: When the United States Supreme Court handed down its Citizens United v. FEC ruling in January, it did more to sound the alarm on special interest money in politics than any campaign finance reformer could have dreamed. The first instinct among legislators in responding is to not make the perfect the enemy of the good. But the question still circulating is: how far will that response go? There is some worry that a quick political gesture could very well supplant meaningful, further-reaching policies to address the role money plays in American elections.
The legislative response to Citizens United will be limited, yet it could lay the groundwork for ushering in a novel approach to campaign finance going forward: one that bypasses the Roberts Court's favoritism for the wealthy few by activating the lower- and middle-income many. Of course, this will all depend on the Democratic leadership's endurance on the issue.
Immediately following the Court's ruling in January, the White House and Democrats in Congress vowed to soften the blow from the decision through whatever means possible. In his weekly radio address, after criticizing the decision during his State of the Union, Barack Obama promised a "forceful response" from his administration. And in a conference call to reporters, Senator Charles Schumer dismally warned that, "if we don't act quickly, this decision will have an immediate and devastating impact on the 2010 elections." Now, just three months later, Schumer and Congressman Chris Van Hollen intend to follow through on the promises with the formal introduction of a Citizens United fix bill in the coming days.
Back in February, the two high-ranking Democrats (Schumer is a former DSCC Chairman and the third ranking Democrat in the Senate; and Van Hollen is the current DCCC Chairman) put forward a preliminary itemized plan to address the effects of Citizens United that would withstand judicial reversal by operating within the legal framework established by the Court in its decision. According to Van Hollen spokeswoman Bridgett Frey, the bill was released early on so as to allow ample time "to incorporate feedback and craft strong legislation that responds to the court's decision."
The February proposal, which Van Hollen described as a "right-to-know bill" -- had six major provisions, which included: banning election expenditures from foreign interests and pay-to-play entities, namely government contractors and TARP recipients; enhancing disclaimers to identify the sponsors of ads; enhancing transparency and the public disclosure of political spending; setting clear and affordable rates for political advertising for candidates, especially TV airtime; and prohibiting corporations from coordinating electioneering activities with a candidate or party.
The final bill is said to be pretty close to that original framework, minus a provision that would require that corporations increase disclosure of political spending to their shareholders (this is to be included in a separate Financial Services bill instead). Congressional spokespeople tell me that the salient concern is having it withstand further Supreme Court challenges. And while it has yet to garner support from across the aisle, polling suggests that it could be a prime candidate for the long lost art of bipartisanship.
The question of whether each element of the bill is susceptible to judicial reversal is a prudent one -- and the answer is very much up in the air for some provisions. According to Richard Briffault, Columbia Law School's Joseph P. Chamberlain Professor of Legislation and a noted authority on the Court's history of campaign finance rulings, "the bill seems to go to the limit of what Citizens United left open -- foreign corps, pay-to-play, disclaimers and disclosure, coordinated expenditures -- without crossing the line...[But] the extension of pay-to-play to independent expenditures probably pushes hardest."
Briffault has concerns that certain elements could be difficult to hash out in practice, such as determining whether a firm qualifies as "foreign" enough (the bill sets this at 20% foreign owned, but the controlling interest in a public company isn't always static), or whether it is legal to impose a new TARP restriction on bailout recipients after they've already accepted funds under the original conditions. Moreover, extending the pay-to-play ban on contractors and TARP recipients to independent expenditures could prove problematic, since it is precisely this distinction that Citizens United did away with in the first place. Beyond these possible trip-ups, Briffault sees the Schumer-Van Hollen proposal as instituting only very mild extensions of already existing laws.
Other Court followers are even less confident in the proposed bill's judicial resiliency. For his part, Harvard Law professor Lawrence Lessig, a leading progressive voice in campaign finance matters, sees almost every provision in the proposed legislation as either ineffective window dressing, or as a prime target for the Court to strike down. He tells me, "I think one could not be too strong about this: It is absurd to suggest this is a 'fix' to Citizens United. The bans are plain targets for new lawsuits... All and all -- [this bill is] a complete zero. And a strong signal of the failure of the Democrats to deliver on the reform promise of this administration."
Lessig is a staunch proponent of the Durbin-Larson Fair Elections Now Act, and for amending the Constitution to give Congress sole power over campaign finance laws. The Fair Elections Act is essentially the "public option" for electoral fundraising. It was introduced in March 2009 by Democratic Party Whip Richard Durbin and then-Republican Senator Arlen Specter and would provide voluntary public campaign financing to candidates who reach a certain dollar amount through small contributions of $100 or less. Once one opts in, he or she receives funding both for the primary and general elections, as well as a few other perks, such as broadcast advertising subsidies.
In an essay shortly following the Citizens United ruling, Lessig praised the Fair Elections proposal as a means for providing "an immediate balance to the deluge of corporate funding that this next election will now see. More importantly, it will give candidates a way to fight that deluge without themselves becoming even more dependent upon private, special interest funding. No other reform -- including reforms that try effectively to reverse Citizens United -- could be as important just now. No other reform should distract us from pushing strongly to get Congress to pass this statute now."
Those crafting the Schumer-Van Hollen bill will tell you that the Fair Elections Act has no chance of making it to the president's desk at this juncture. Nevertheless, Congressman John Larson, its House-side sponsor and Chairman of the House Democratic caucus, may propose it as an amendment. With 141 co-sponsors in the House, it's hardly a pipe dream. The problem is in the Senate, where it has but 10 co-sponsors (a list that is noteably lacking Schumer's name).
It's not politically unreasonable that the Democratic leadership is proceeding cautiously and in narrow terms. No system is overhauled in a single stroke, and they're legislating within the parameters of what is admittedly a difficult political environment. The result is that the Schumer-Van Hollen bill will likely be exceedingly limited in its effect on political spending; and most with whom I spoke regard it more as an obligatory political gesture than anything else.
Aside from the necessary need to do something, the Democrats' bill cannot be expected to make a "radical difference in the mix of resources and politics," Michael Malbin tells me. Malbin, the Executive Director of the nonpartisan Campaign Finance Institute in Washington, DC, sees the Schumer-Van Hollen bill as good in spirit and worth pushing through to the president's desk, but, ultimately, as a political necessity with only a few very mild, superficial policy benefits.
At best, the new regulations may theoretically lend slightly more transparency to the paper trail of campaign monies through more disclosure and the Stand By Your Ad provision for CEOs. But even this is seen as wishful thinking by some. In response to stricter disclosure rules, Lessig points to Marcos Chaman and Ethan Kaplan's Iceberg Theory of Campaign Contributions [pdf], which demonstrates that special interests don't actually need to run election ads when the mere threat of doing so will suffice. As Lessig notes, "those threats are not disclosed."
This is also an area where Briffault agrees, telling me, "I suppose that some people think that the disclosure and disclaimer requirements ... will reduce corporate spending. I doubt that it will. I think the law does as much as the Supreme Court will allow, but for those who think that corporate spending is the problem, this bill won't and can't stop that."
Most other provisions in the bill are said to fall similarly short. According to Lessig, the campaign-corporation coordination ban looks good on paper, but is more or less meaningless in the Internet age. The same can be said for the ban on foreign influence. As Loyola Law School professor and author of the Election Law Blog Rick Hasen tells me, there is a trade off between having the bill withstand judicial challenge, on the one hand, and having it provide truly effective regulation on the other. According to Hasen, "if 'foreign' corporation is defined broadly, it will be unconstitutional; if defined narrowly, it won't do much."
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First Posted: 06/15/10 12:26 PM ET Updated: 05/25/11 05:10 PM ET