April 29, 2010


DISCLOSE Act Will Require All Organizations Making Political Expenditures To Make Public Their Donors And Appear On Camera To Stand By Their Ads Legislation Would Also Ban Foreign-Controlled Corporations, Government Contractors from Making Political Expenditures Bill Was Developed Together With Obama Administration; Van Hollen, Castle To Introduce House Version Later Today

WASHINGTON, DC—U.S. Senators Charles E. Schumer (D-NY), Russ Feingold (D-WI), Ron Wyden (D-OR), Evan Bayh (D-IN) and Al Franken (D-MN) announced new legislation Thursday to blunt the harmful impacts from the Supreme Court’s decision allowing corporations and other special interests to spend unlimited sums to influence elections. The lawmakers said their goal is for the Senate to pass the new measure by July 4 so the law can take effect in time for the 2010 midterm elections.

The legislation is a response to the Court’s ruling in the Citizens United case last January. That decision overturned a decades-old law banning political expenditures by corporate interests. The new Senate legislation would partly restore those limits – by barring foreign-controlled corporations, government contractors and companies that have received government assistance from making political expenditures – and also require corporations, unions, and other organizations that make political expenditures to disclose their donors and stand by their ads.

The legislation is dubbed the “Democracy Is Strengthened by Casting Light On Spending in Elections” Act, or The DISCLOSE Act.

Senator Schumer said: “At a time when the public's fears about the influence of special interests were already high, the Court’s decision stacks the deck against the average American even more. Our bill will follow the money. In cases where corporations try to mask their activities through shadow groups, we drill down so that ultimate funder of the expenditure is disclosed. If we don’t act quickly to confront this ruling, we will have let the Supreme Court predetermine the outcome of next November’s elections. It won’t be Republicans or Democrats; it will be Corporate America and other special interests.”

Senator Feingold said: “The Supreme Court’s decision in Citizens United was a tragic error.  While the core of the McCain-Feingold law was left intact, the results of the decision are far reaching, giving big corporations greater power to sway elections and drown out the voices of average Americans. While no bill can reverse the Court’s mistake, we need to make sure that the public can follow the money and see exactly who is behind the onslaught of political advertising that the decision has unleashed. That is why this bill is so important.”

Senator Wyden said: "I wish Congress didn't have to take action to ensure that a citizen's voice doesn't get buried by new and larger mountains of corporate cash; but that is what our legislation will do. If the Supreme Court wants to treat corporations as individuals then we will hold those entities to the same standards of accountability that we do individuals, which means requiring that CEO's, labor leaders and even political consultants stand by their ads."
Senator Bayh said: "By opening the floodgates to unlimited spending by special interests, this Supreme Court decision has made it even more difficult to achieve the principled compromise that our country so desperately needs at this moment in time. The threat of unlimited amounts of negative advertising from special interest groups will only make lawmakers more beholden to the most ideological and partisan members of their party and more afraid of violating party orthodoxies.  If fundraising is constantly on members’ minds, it’s difficult for policy compromise to trump political calculation. This legislation is needed to prevent an already bad campaign finance system from getting even worse."

Senator Franken said: “Citizens United was an incredible act of judicial activism.  It turned back a century of federal law, and it nullified Minnesota’s twenty-year-old ban on corporate spending in elections. The DISCLOSE Act will make sure that voters and shareholders know who is funding election advertising. My provisions make sure that American-based subsidiaries controlled by foreign companies or governments won’t ever spend money on Minnesota or federal elections. Minnesota’s elections should be controlled by Minnesotans.”
Under the senators’ proposal, the heads of any organization sponsoring an ad—including corporate CEOs—would be required to appear during the ad, as is currently required of candidates for federal office. In cases where special interests funnel their money into shell groups, the top five organizations that have donated to the group would have to be identified on screen during any ad sponsored by that group. The CEO of the group’s top funder for that particular advertisement would also be required to appear on screen to deliver a “stand by your ad” disclaimer.

Also, the bill would effectively require, for the first time, all corporations and advocacy groups that make political expenditures to establish easy-to-track campaign accounts. All donations to these accounts that exceed $1,000—as well as all expenditures funded through these accounts—would be reported within 24 hours to the Federal Election Commission once the money is spent, as well as to the public on the organization’s website, and to company shareholders in their corporate filing statements. If a company or organization did not wish to establish these transparent accounts, it would be required to disclose all its donors, not just those whose contributions are earmarked for political activities.

The legislation will also strengthen a candidate’s ability to respond to corporate attack ads by ensuring they can purchase air time at the lowest possible rate in the same media markets where these attacks ads are airing.  The bill would also make sure that private corporations don’t coordinate their political activities with candidates.

The legislation was developed together with the Obama administration and House leaders like U.S. Rep. Chris Van Hollen (D-MD). Van Hollen was expected to introduce the House version of the DISCLOSE Act later today with Republican cosponsors.

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