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Statement for the Record

Lisa Rosenberg, Government Affairs Consultant
The Sunlight Foundation

Senate Committee on Rules and Administration
Dollars and Sense: How Undisclosed Money and Post-McCutcheon Campaign Finance
Will Affect 2014 and Beyond

April 30, 2014


Mr. Chairman, Senator Schumer, Senator Roberts, members of the Committee, thank
you for the opportunity to submit a statement for the record on behalf of the Sunlight
Foundation. The Sunlight Foundation is a nonpartisan nonprofit that advocates for open
government globally and uses technology to make government more accountable to all.
We do so by creating tools, open data, policy recommendations, journalism and grant
opportunities to dramatically expand access to vital government information to create
accountability of our public officials. Our vision is to use technology to enable more
complete, equitable and effective democratic participation. Our overarching goal is to
achieve changes in the law to require real-time, online transparency for all government
information, with a special focus on the political money flow, those who are trying to
influence government and how government responds.

Given that mission, we have a strong interest in ensuring that the Supreme Courts call
for robust disclosure of money in politics is satisfied, despite the many ways the Court
has undone other pillars of our campaign finance laws. Unfortunately, despite the
Courts reliance on transparency to cleanse massive political contributions from their
corruption influence, todays laws are a far cry from the robust disclosure regime the
Court seems to believe is in place. Congress must act to, at a minimum, uphold
transparencythe last remaining pillar of our campaign finance system.

The Sunlight Foundation endorses three proposals that would increase transparency:
the Real Time Transparency Act, S. 2207 and H.R. 4442, would create a robust, real-
time disclosure regime for large hard money contributions; the DISCLOSE Act would
provide for disclosure of dark money contributions that are laundered through fraudulent
social welfare organizations; and lobbying reform would ensure that the lobbying
activities of the wealthiest interests making large hard money or dark money
contributions are disclosed. While none of these legislative initiatives would undo the
damage wrought by the Court, all are important to deter corruption and inform voters.


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Large Hard Money Contributions Must be Disclosed within 48 Hours


The Supreme Courts most recent assault to our campaign finance system came earlier
this year, when the Courts decision in McCutcheon v. Federal Election Commission
(FEC) opened the door for a handful of wealthy individuals to give millions of dollars
directly to the candidates and parties. The Court overturned years of jurisprudence
deciding that the only type of corruption that exists is quid pro quo corruption, nothing
short of buying votes for bags of cash. This Court naively believes that there is no
corruption or appearance of corruption when candidates solicit five- and six-figure
contributions and donors receiveat a minimumthe ear of elected officials in
exchange for their generosity. With that narrow framework as its starting point, the Court
lifted the overall limit (currently $123,200) on the amount individuals may gave to all
candidates, PACs and parties. Thanks to the activist Roberts Court, a single individual
can now contribute more than $3.5 million to a single partys candidates and
committees in a two-year period. A donor more interested in buying access and
influence than partisanship could give $7.25 million to the candidates and committees of
both major parties.

By lifting the overall limits, the Court hands wealthy donors with a megaphone,
simultaneously silencing everyone who doesnt have the means to buy access and
influence with a large check. In other words, this Court disregards the First Amendment
rights of every US citizen except the tiniest handful of the super-richthe 1% of the 1%.
There is one way, however, to return a degree of power back to the citizens of the
United States: Inform citizens of large contributions to candidates, parties and
committees in real time. Knowledge is power, and disclosure is the last remaining
constitutional tool that can be employed to empower citizens.

The Real Time Transparency Act would mandate disclosure of all contributions of
$1,000 or more to parties, candidates and political committees within 48 hours. It merely
extends the current 48-hour notice rule in the Federal Election Campaign Act that
applies to $1,000 contributions in the last 20 days prior to an election to provide for
year-round disclosures. It would also mandate that Senate candidates electronically file
their disclosure reports. The importance of immediate disclosure is not limited to the
weeks before an election. It is necessary year-round to inform voters and let them
determine whether and how they will react to large contributions.

As the McCutcheon Court noted, disclosure of contributions minimizes the potential for
abuse of the campaign finance system. Disclosure requirements are in part justified
based on a governmental interest in providing the electorate with information about the
sources of election-related spending. They may also deter actual corruption and avoid
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the appearance of corruption by exposing large contributions and expenditures to the
light of publicity. (Emphasis added. Internal citations and quotations omitted.)

The Roberts Court is mistakenor disingenuousif it believes that todays campaign
finance disclosure system is up to the task of exposing large contributions to the public
in a timely manner. While the Court justifies lifting the caps on contributions in part
because reports and databases are available on the FECs Web site almost
immediately after they are filed it conveniently ignores the fact that current reporting
schedules delay disclosure by as much as three monthseven more for Senate
candidates who do not have to file their campaign finance reports electronically with the
FEC.

The Real Time Transparency Act would be an important step towards providing citizens
with information in a timely manner, so that they can decide whether and how to
respond to a huge contribution given to their elected representative or candidate for
federal office.

Dark Money Contributions Must be Disclosed

Four years ago, the Supreme Court first showed its willingness to undo laws designed
to prevent corruption or the appearance of corruption in our political process, shattering
a 100-year old precedent and dismissing the lessons of Watergate. In Citizens United v.
FEC, the Court decided that unlimited contributions from corporations and wealthy
individuals would not have a corrupting influence on our political system as long as they
were independent from the candidates campaigns.

We now know the results of that disastrous decision: the influx of over a billion dollars of
unlimited, often dark money into the 2012 elections; the creation of a cottage industry of
money launderers disguised as nonprofits in order to hide the contributions of wealthy
individuals; an easy route for foreign money to slip into the U.S. political process;
messages shaped by donors instead of candidates; and a disclosure system wholly
incapable of making any of the secret money transparent.

To inform the public and deter corruption in a manner consistent with the Courts own
findings, Congress must enact the DISCLOSE Act to create a disclosure regime that
reflects the new reality of expanded independent spending. Specifically, the bills robust
reporting requirements for super PACs, corporations, unions and nonprofit
organizations that make independent expenditures and electioneering communications
will begin to address many of the problems wrought by Citizens United: It will shine a
light on dark money; it will provide an enforcement mechanism to ensure that no foreign
money is influencing our political process; it will allow citizens to determine the
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credibility of campaign ads based on the messenger as well as the message; and it will
arm citizens with information about campaign funding before they go to the polls, in real
time and online.

Lobbying Activities Must be Disclosed

Perhaps the most damaging result of both Citizens United and McCutcheon is that the
decision will provide a powerful toolunlimited sums of moneythat increase the ability
of stealth lobbyists to purchase access and influence without any disclosure. Under
current law, no disclosure is required of influencers if they spend less than 20% of their
time lobbying on behalf of any one client. Under the Courts new campaign finance
regime, an elected official may solicit $500,000 or $1,000,000 from a single individual,
giving that individual the opportunity to ask for help on his or her pet issue. Or, a stealth
lobbyist can hint that a large, negative dark money ad buy may be in a politicians future
if the politician does not do the lobbyists bidding. If the individual doing the asking falls
under the 20% loophole, there will be no disclosure, and no way for the public to
determine whether access and influence is being purchased. Institutionalizing a class of
secret wealthy power brokers will never create vigorous debate that is required of a
well-functioning democracy. The Lobbying Disclosure Enhancement Act (H.R. 2339,
112
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Congress) would enhance lobbying disclosure, but Congress has so far opposed
efforts to close the 20% loophole. However, because of the dramatically and lasting
influence wealthy donors have on public policy, the public is entitled to have stealth
lobbying activities brought to light.

Conclusion
Because of the Roberts Court, average citizens have literally lost their voice in our
political system to a handful of super wealthy special interests and individuals. While the
Court may not be concerned about silencing the majority of citizens of this country, it
has at least upheld citizens right to be informed, stating, the First Amendment protects
political speech; and disclosure permits citizens and shareholders to react to the speech
of corporate entities in a proper way. This transparency enables the electorate to make
informed decisions and give proper weight to different speakers and messages. Real-
time disclosure of hard money, disclosure of dark money and disclosure of lobbying are
important and minimally intrusive ways to inform the public ensure accountability where
free speech and the functioning of our democracy intersect.