Bloomberg News

Senate Republicans Block Campaign Donor Disclosure Bill

July 17, 2012

Senate Republicans for the second day in a row blocked legislation requiring nonprofit groups such as Crossroads GPS and the U.S. Chamber of Commerce to reveal who is paying for their political ads.

While a majority of Senate lawmakers voted in favor of advancing the bill, the 53-45 vote was short of the 60 votes needed to overcome Republican opposition. After the measure was blocked yesterday, Senate Democrats debated the legislation into the evening and renewed their efforts today.

The legislation is a response to the U.S. Supreme Court’s Citizens United decision in 2010 that removed limits on independent spending by corporations and labor unions. The bill, known as the Disclose Act, would require groups that spend at least $10,000 on an election to report donations of more than $10,000 within 24 hours of spending the money.

Under current law, political action committees are required to disclose their donors, who can give no more than $5,000 each year. The Citizens United ruling freed corporations and unions to use their general-treasury money for independent spending to support or oppose candidates.

“The least we should do is require groups spending millions on political attack ads to disclose their largest donors,” Senate Majority Leader Harry Reid, a Nevada Democrat, said today. “We owe it to voters to let them judge for themselves the attacks, and the motivations behind them.”

Senator John McCain, an Arizona Republican, who had been a long-time champion of campaign finance limits, opposed the legislation as a “clever attempt at political gamesmanship.”

Organized Labor

McCain said the $10,000 reporting threshold “forces some entities to inform the public about the origins of their financial support, while allowing others - most notably those affiliated with organized labor - to fly below the Federal Election Commission’s regulatory radar.”

The $10,000 threshold was designed to avoid requiring membership organizations, such as labor unions or the National Rifle Association, to disclose each donation to the group.

Groups that kept their donors secret favored Republicans over Democrats in 2010 by $117 million to $13 million, according to the Center for Responsive Politics, which tracks campaign contributions. Such groups included the U.S. Chamber of Commerce, the nation’s largest business lobby, and Crossroads GPS, co-founded by Republican strategist Karl Rove.

Such spending overcame a Democratic fundraising edge in 2010 among candidates and party committees, helping Republicans win a U.S. House majority and increase their numbers in the Senate.

Priorities USA

Former aides to President Barack Obama have set up a nonprofit group, Priorities USA, to raise money to support his re-election.

The Federal Election Commission approved creation of super- PACs, which can take unlimited donations. While donors to super- PACs are supposed to be disclosed, some contributors have used shell corporations to avoid identification.

For example, the super-PAC backing Republican presidential candidate Mitt Romney, Restore Our Future, received $235,000 from corporations created by payday lenders in the two months after Obama made a recess appointment of the Consumer Financial Protection Bureau director, who oversees that industry.

None of the payday companies’ business interests were identified in disclosure filings. Bloomberg News identified the payday lenders through state corporate and other federal campaign finance records.

The Democratic bill would require such donations to be disclosed.

Chamber of Commerce

The Chamber of Commerce, other business groups, and Republican-leaning nonprofit groups sent a letter to lawmakers urging them to reject the measure.

“The legislation is intended to facilitate retaliation against unpopular or unfavorable political views,” the letter said.

Groups that support campaign finance disclosure rules urged the Senate to pass the bill.

“Citizens are entitled to know the identities of the donors financing campaign expenditures to influence their votes, and the amounts they gave,” said the letter signed by leaders of the Campaign Legal Center, Public Citizen and the League of Women Voters.

House Democrats have filed a bid in that chamber to push their version of the Disclose Act to the floor.

The legislation is S. 3369 and H.R. 4010.

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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