When Supreme Court Justice Anthony Kennedy penned the landmark Citizens United decision in 2010, which removed limits on independent spending by corporations and labor unions, he acknowledged that injecting such large amounts of money into the political process had the potential to corrupt it. But that corrupting influence would be kept in check, he said, if the public could see how much was being spent. “Prompt disclosure of expenditures,” Kennedy wrote, “can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
That’s not what’s happened. Super PACs, which spent more than $600 million on the 2012 election, must disclose their donors to the Federal Election Commission on a quarterly basis, and twice annually in non-election years. That means the public only finds out who spent what months after the fact, and sometimes after the election itself, according to the Center for Responsive Politics, a Washington research group that tracks campaign spending. And federal tax laws allow some outside political organizations to keep the names of their donors secret even as they spend millions on political campaigns. CRP says such groups spent at least $314 million in the 2012 election, up from $126 million in 2010. For the most part, the public has no clue who is funding these groups.
Two senators—Alaska Republican Lisa Murkowski and Oregon Democrat Ron Wyden—are hoping to change that. They’ve teamed up on a bill they’re calling the Follow the Money Act. The legislation, proposed yesterday, directs the FEC to create a real-time electronic reporting system for all political contributions. It would require all groups that spend more than $10,000 on elections, including super PACs and nonprofits, to register their spending and disclose their donors with the FEC. It also changes the FEC’s reporting requirements in significant ways. Currently, some nonprofits have to report to the FEC only if they spend money on ads. The bill would require these groups to report on other kinds of political activity they engage in, including fundraising and polling.
Because the bill also exempts any donations of less than $1,000 from having to be reported—a fivefold increase from the current $200 threshold—it potentially offers a loophole to people who bundle money from large groups of individuals. The higher threshold means bundlers could have an easier time slipping under the radar.
While Wyden and many Democrats have long wanted to close campaign finance loopholes, some Republicans—including Murkowski—blocked efforts to do so as recently as last summer. But as she told my colleague Jonathan Salant recently, the secret money that flooded into the 2012 election pushed her to change her mind: “I saw really for the first time,” she said, “how funding directed in a very anonymous way can so significantly influence an election.”
She’s going to have a tough time convincing her GOP colleagues to sign on—particularly Senate Minority Leader Mitch McConnell, one of the staunchest opponents of regulating political spending. Transparency advocates are holding out hope that if the bill fails, the government will achieve the same results through other means: by having the Securities and Exchange Commission require corporations to reveal their contributions in annual corporate filings. More than half a million people have signed a petition asking the SEC to do this, and a decision from Chairman Mary Jo White is expected any day now.