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Miller, Executive Director The Sunlight Foundation Before the Senate Committee on Rules and Administration Hearing on the DISCLOSE Act 2012
Mr. Chairman, Senator Alexander, members of the Committee, thank you very much for the opportunity to submit testimony on behalf of the Sunlight Foundation. My name is Ellen Miller and I am the co-founder and executive director of the Sunlight Foundation. The mission of the Sunlight Foundation is to use cutting-edge technology to make government transparent and accountable. Before founding Sunlight, I was deep in the campaign finance trenches. First, as a founder of the Center for Responsive Politics, the nation’s première money and politics data crunching organization. Later, I created Public Campaign, a nonprofit that pioneered the concept of a system of full public financing. Given my background, you can imagine my interest, and horror, as I read the Supreme Court’s decision in Citizens United v. Federal Election Commission. In the two years since then, my worst fears have been realized. That case and its progeny opened the floodgates for corporate and union spending in elections. In dismantling 100 years of prohibitions against corporate treasury funds being used to elect candidates, the Court put a great deal of faith in the idea that disclosure will remove the taint of corruption from the new influx of cash. The majority opinion observed that the Internet is becoming the best way to hold politicians and influencers accountable. But, the Court created an entirely new spending regime for which no disclosure system is in place. For online transparency to perform the functions ascribed to it by the Citizens United ruling, Congress has to create new laws that reflect the new reality of expanded independent spending. DISCLOSE 2012 creates that system of transparency and as such should receive wide support from members on both sides of the aisle. We are pleased that Senate Democrats reintroduced a DISCLOSE Act that goes straight to heart of the problem: the lack of transparency for unlimited, dark money and the influence it has on our elections and our elected officials. The updated bill removes extraneous and controversial provisions that plagued an earlier version of DISCLOSE, instead focusing on what the public demands — transparency.
The Senate’s laser-like focus on disclosure and disclaimer provisions mirrors Sunlight’s recommendations in our draft Stop Undisclosed Payments in Elections from Ruining Public Accountability Act, (the SUPERPAC Act) a bill we proposed on the second anniversary of the Citizens United case. Specifically, the bill’s 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 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. The DISCLOSE Act will Address the Problem of Dark Money The Citizens United case resulted in two avenues, Super PACs and 501(c) organizations, which allow corporations, unions, and wealthy individuals to funnel money to campaigns, largely undisclosed. Well-heeled donors can use both routes to conceal their identities. Indeed, many super PACs have affiliated 501(c)(4) groups, like the Karl Rove-founded super PAC American Crossroads, which spun off a 501(c)(4) named Crossroads GPS or the pro-Obama super PAC Priorities USA Action, which has a sister 501(c)(4) organization, Priorities USA. The result is an elaborate political shell game in which a Super PAC can pay for negative, distorting ads by using contributions it received from a non-profit, disclosing only the benign or misleading name of the organization, but not where the organization received its money. The system also allows a more direct route for dark money to influence the system, as social welfare groups may themselves run independent expenditures or electioneering communications—paid for by secret donors. It strains credulity to think that a special interest that funnels six or even seven figure contributions through a Super PAC or a nonprofit will keep the candidate in the dark about the contribution. If elected, the candidate will, at the very least, take that donor’s call, vastly skewing access and influence in favor of the wealthy donor. The DISCLOSE 2012 Act will not change the ability of those donors to make generous contributions, but it will allow voters to gain some insight into who may be influencing their elected officials. Moreover, even if, as some argue, secret contributions are not corrupting because the candidate does not know the source of the money, the credibility of a campaign ad rests on who is paying for it.
The DISCLOSE Act Will Reduce the Risk of Foreign Money in U.S. Elections A less noticed but no less serious possibility arising from the shell game unleashed by Citizens United is the real possibility that foreign money can be laundered into our political system. As noted above, Citizens United created an environment in which it is perfectly legal for a non-profit corporation to engage in election-related spending on behalf of a hidden interest. Because there are no disclosure rules that apply to the nonprofit, there is nothing to ensure that the hidden interest funding the organization is not a foreign national, a foreign company or a foreign government. In Bluman v. FEC, the Supreme Court recently affirmed that foreign nationals are prohibited from making contributions or expenditures in connection with U.S. elections. As long as we believe that foreign interests should not influence our elections, strong preventative measures must be in place to ensure such interests are not provided with a vehicle to assist in the election efforts of any candidate. The DISCLOSE Act’s disclosure provisions would uncover or even prevent the laundering of foreign money into U.S. elections. The DISCLOSE Act Will Allow Voters to Weigh the Message In an oft-quoted portion of his decision in Citizens United, Justice Kennedy summarized the importance of online disclosure, stating: With the advent of the Internet, prompt 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 Scalia similarly upheld the importance of disclosure writing, in Doe v. Reed: Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed. For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously… exercises the direct democracy of initiative and referendum hidden from public scrutiny and protected from the accountability of criticism. This does not resemble the Home of the Brave. Both justices embrace the idea that accountability is vital in our democracy, and without disclosure, there can be no accountability. Citizens need to know who the messenger is to fully understand the message and to gain insight into the impact it has on the candidate. An ad
urging voters to vote against a candidate because the candidate “doesn’t care about jobs” will have a different meaning, and impact a voter differently, if the group behind that ad is a labor union or if it is a corporation with overseas operations. The DISCLOSE Act’s disclosure and disclaimer provisions are equally important to ensure that ads can be fully understood and evaluated by voters. The DISCLOSE Act Will Ensure Timely Disclosures Under the current system, Super PACs have to disclose the amount they're spending on independent expenditures right away, but they can delay disclosure of who is paying for those ads. As noted above, nonprofits are not subject to even those minimal requirements. The result is that in early primary voting this year, voters went to the polls before Super PACs reported on their donors. The DISCLOSE Act embraces the Sunlight mantra of real time, online disclosure by requiring electronic filing and disclosure of donors within 24 hours after each expenditure of more than $10,000. Conclusion The disclosure and disclaimer provisions of the DISCLOSE Act are narrowly crafted so as not to infringe on constitutional protections. The Act does not require organizations to disclose donors who have contributed less than $10,000 and allows groups to create a firewall that allows donors who do not wish to contribute to political activities to remain anonymous. At the same time, the DISCLOSE Act, for better or worse, does not put an end to concentrations of wealth being used in an effort to impact elections. Simply put, it does not chill speech. But the Act rightly and importantly shines a light on the dark money now infecting our elections and creates informed citizens and a more accountable government. We urge all members of this Committee to support the DISCLOSE Act.
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