Disclosure in a 21st Century Reform Program

February 2, 2015
posted by Bob Bauer

Writing off the Koch announcement of massive 2016 spending, Ron Fournier urges that we be realistic about campaign finance reform in the 21st century: no limits, just instant disclosure. He seems to be salvaging what he can from the current mishmash of changes in political practices, outdated campaign finance requirements and increasingly unsparing limits on Congress’s constitutional authority. Without a sharp focus on disclosure, he argues, the 2016 election will go largely dark.

Fournier’s analysis has two considerable virtues: a call for the debate to adjust to constitutional and political realities and an emphasis on single-minded priority in the reform of the law. The debate is stuck, and one reason is that a fair number of interested observers are dedicated to fighting the same arguments heard since the 1970s. A whole host of objectives are being kept artificially alive for discussion. Political spending is to be reduced and the prohibition on corporate spending restored. Independent spending is to be curtailed because some of it is suspect, gutted by disreputable, if not invariably illegal, forms of coordination. Political discourse is being poisoned by attack advertising.

And, of course, there is too much “dark money” and disclosure law should be strengthened against it. Here is where Fournier recommends that reform energy be expended.

The FEC has an opportunity to significantly improve administration of the disclosure requirements already in place. That’s a good start and a manageable project. And then there is the question of how contested questions of disclosure can be resolved. There is a glimmering of an indication that, perhaps not too long into the future, there may a basis for bi-partisan compromise. A recently formed group seem interested in reclaiming conservative or conservative Republican credentials on money-in-politics reform, and their program includes a commitment to transparency.

Should the discussion stand a chance of progressing, certain issues will have to be creatively addressed. Principal among these are the treatment of “issue advertising” which may influence voter choice and the privacy interest of donors. There are a few starting points in negotiation that could draw together those who share a genuine interest in effective but carefully crafted transparency.

The IRS: It is unrealistic to assume that an active IRS role in designing and enforcing broad disclosure requirements will meet with wide acceptance. The agency could continue administering disclosure rules for, say, “527’s”, which have been relatively uncontroversial, but having the IRS determine when issue advertising shades into reportable electioneering raises deep concerns about mixing tax enforcement and politics.

Donor Privacy: There is also no cause to disregard donor privacy interests, because these concerns will only grow in intensity and the argument for recognizing and protecting them is rich in merit. A simple step and, as these things go, a noncontroversial one, would be to raise the donor disclosure threshold well above the current $200 level.

For this reason, it would also not help matters to return to proposals like the one apparently favored by Chuck Todd to have donors above a certain amount identified by name in broadcast advertising. Disclosure rules will have to surmount the suspicion, however well-founded, that one of their purposes is to deter giving by shaming or terrorizing donors. Also the emphasis on broadcast advertising is dated. A lot of money spent on other electioneering activity should be kept just as much in view.

The Internet: The rules in place work well enough, are generally accepted, and the time has not arrived for kicking off a ruckus over toughening them. Commissioner Ravel’s remarks have been exaggerated in the re-telling: it is not clear that oppressive rules are on the way. Any such rules could not possibly get four votes and become real rules. But the point is taken: the discussion of disclosure will not fruitfully include new requirements for internet communications.

If those points could be built into the background of a discussion, then the debate can proceed to principles that would govern reasonably drawn, effective disclosure.   There are three to begin with:

Consistency: it makes no sense to have independent expenditure reporting and “electioneering communications”—types of campaign-related issue advertising—result in sharply different scopes of disclosure. Right now, after the most recent decision in the Van Hollen case, the electioneering communications offers donor disclosure whereas organizations making independent expenditures report just the lump sum spent. And the difference in disclosure requirements applied to parties and organizations engaged in similar (or identical) activities with similar (or identical) aims makes no sense.

Focus: The achievable goal might be rules that capture within a reasonable time span spending with the predictable intent or effect of influencing voter choice. For all its weaknesses, the temporal limitation–structuring the rules around election periods–is key. It is the best that can be done, and to attempt more is to guarantee stalemate in the discussion. The 30-60 day frames for electioneering communication are as sensible as any, and the Supreme Court has affirmed that Congress can enact disclosure requirements on this basis.

Scope: There is no point in disclosure if it is superficial and uninformative, and the two issues of scope that are fairly brought into the discussion are: 1) the range of communications subject to reporting, and 2) donor disclosure.

In the first case, with the exception of the Internet, it is reasonable to ask why the electioneering communication rules should reach only broadcast, cable or Internet communications. Why not direct mail or phone banking? The limitation to TV is an anachronism. Anyone worried about expansion of the media covered could be reassured by including limiting criteria, such as defining mass mailing so that the only truly mass mailings would be subject to the reporting requirements. The one standard now in the law for other purposes—more than 500 identical pieces—does not have to be used for this other reporting purpose. The distribution might have to be even broader to qualify. The total spending for electioneering communications that would trigger disclosure could also be increased.   The rules ought to be written to pick up major spending and impose reporting requirements only on the “big” spenders, sparing the “little guy.”

In the second case, the donor reporting threshold should be raised, and it could be raised significantly. No has compelling reason to know the identity of the $50 or $100 or even $250 donor. Set the threshold higher still, and the public would receive the information that is most relevant. Distinctions could also be drawn between corporate or union givers, and individual givers: the threshold could be lower for the institutional donors.  But then the disclosure of donors should be meaningful and would include all donations except, for example, membership dues.

This is only one possible plan for a discussion. There is a strong case for some discussion. If transparency goes by the board, there will be a reaction, and the result could be far worse and less useful than what could be more carefully considered now.

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