Presto! The DISCLOSE Act Disappears

With Michael Winship

Ask any magician and they’ll tell you that the secret to a successful magic trick is misdirection — distracting the crowd so they don’t realize how they’re being fooled. Get them watching your left hand while your right hand palms the silver dollar: “Now you see it, now you don’t.” The purloined coin now belongs to the magician.

Just like democracy. Once upon a time conservatives supported the full disclosure of campaign contributors. Now they oppose it with their might — and magic, especially when it comes to unlimited cash from corporations. My goodness, they say, with a semantic wave of the wand, what’s the big deal?: nary a single Fortune 500 company had given a dime to the super PACs. (Even that’s not entirely true [1], by the way.)

Meanwhile the other hand is poking around for loopholes, stuffing millions of secret corporate dollars into non-profit, tax-exempt organizations called 501(c)s that funnel the money into advertising on behalf of candidates or causes. Legally, in part because the Federal Election Commission does not consider them political committees, they can keep it all nice and anonymous, never revealing who’s really behind the donations or the political ads they buy. This is especially handy for corporations — why risk offending customers by revealing your politics or letting them know how much you’re willing to shell out for a permanent piece of an obliging politician?

That’s why passing a piece of legislation called the DISCLOSE Act is so important and that’s why on Monday, Republicans in the Senate killed it [2]. Again.

Why? Senate Majority Leader Harry Reid: “Perhaps Republicans want to shield the handful of billionaires willing to contribute nine figures to sway a close presidential election.” The election, he said, may be bought by “17 angry, old, white men.”

The DISCLOSE Act is meant to pull back the curtain and reveal who’s donating $10,000 or more not only to super PACs but also to trade groups like the U.S. Chamber of Commerce and these so-called “social welfare” non-profits that can spend limitless cash on campaigns as long as it’s less than half the organization’s total budget.

The New York Times recently cited a report [3] by the Center for Responsive Politics and the Center for Public Integrity finding that “during the 2010 midterm elections, tax-exempt groups outspent super PACs by a 3-to-2 margin with most of that money devoted to attacking Democrats or defending Republicans.”  We’re talking in excess of $130 million. What’s more, the Times reported, “such groups have accounted for two-thirds of the political advertising bought by the biggest outside spenders so far in the 2012 election cycle… with close to $100 million in issue ads.”

We know a few of the corporations that are contributing, but just a few, and that’s only by accident or via scattered governance reports, regulatory filings and tax returns. The insurance monolith Aetna, for example, gave more than $3 million to a pro-Republican non-profit called American Action Network, which spent millions on ads attacking Obama’s health care plan – even though, publicly Aetna supported the president.  The Chamber of Commerce has pledged to spend at least $50 million on this election. Its contributors include Dow Chemical, Prudential Financial and MetLife.

But they’re just the tip of the proverbial iceberg. Without disclosure we have little idea of all the big businesses that are buying our democracy — and doing their best to drown it at the bottom of the sea.

All of this, of course, is more blowback from the horrible Supreme Court Citizens United decision, which unleashed this corporate cash monster. Just this week, Justice Richard Posner of U.S. Seventh Circuit Court of Appeals – a Republican and until recently, no judicial liberal — said that Citizens United had created a political system that is “pervasively corrupt [4]” in which “wealthy people essentially bribe legislators.”

Nonetheless, at the time of the ruling two and a half years ago, eight of the nine justices also made it clear that key to the decision was the importance of transparency. Justice Anthony Kennedy wrote, “The First Amendment protects political speech and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way.”

One of the DISCLOSE Act’s biggest opponents isn’t buying that argument.  Senate Minority Leader Mitch McConnell, who used to say, “We need to have real disclosure,” has changed his tune. Now that conservatives and the GOP are able to haul in the big bucks, he claims that divulging the identity of corporate donors would be the equivalent of creating an “enemies list,” like the one Richard Nixon kept to punish his foes and settle political scores. Here’s what McConnell said [5] in a speech at the conservative American Enterprise Institute last month:

“This is nothing less than an effort by the government itself to expose its critics to harassment and intimidation, either by government authorities or through third party allies… That’s why it’s a mistake to view the attacks we’ve seen on ‘millionaires and billionaires’ as outside our concern. Because it always starts somewhere; and the moment we stop caring about who’s being targeted is the moment we’re all at risk.”

McConnell’s not the only one — every Republican voted to kill the DISCLOSE Act, including fourteen who just a couple of years ago supported it. Groups like Ron Paul’s Campaign for Liberty smell an un-American conspiracy lurking behind the demands for disclosure. So do the National Rifle Association and FreedomWorks — the Tea Party organizers originally funded by David Koch — each of which warned senators that their votes on the DISCLOSE Act will be included in the scorecards they keep, recording each ballot they don’t approve like pins in a voodoo doll.

Their outrage is ridiculous and hypocritical. These non-profits are just another magic trick, an illusion intended to obscure the fact that these are monumental slush funds, plain and simple. As The Washington Post noted in an editorial [6] this week:

“We seem to have created the political equivalent of secret Swiss bank accounts… In their lust for contributions, in cozying up to the moneybags of this era, candidates and political operatives in both parties seem to be forgetting that they put their own credibility at risk.”

Contrary to Senator McConnell’s view, this is more corrupt and covert than anything that happened during Watergate. The public has a right to know who’s behind the hundreds of political ads with which we’re being bombarded this year, who’s giving what to whom — not to mention our right to try to connect the dots and figure out what their motives are.

The good news is that people are fighting back. On July 5^th, California joined state legislatures in Hawaii, New Mexico, Rhode Island and Vermont calling for a constitutional amendment to reverse Citizens United. The Senate Judiciary Committee is holding hearings July 24^th and the state of Montana, which recently had its law barring corporate spending in elections struck down by the Supreme Court, has put a voter initiative on its November ballot, also calling for a constitutional amendment.

Lee Drutman at the non-partisan Sunlight Foundation quotes the father of our Constitution, James Madison, who warned, “A popular government without popular information or the means of acquiring it, is but a Prologue to Farce or Tragedy or perhaps both.” Drutman goes on to point out that, “The Declaration of Independence wasn’t signed by Anonymous. Those who sign the big checks should have the very same courage in their convictions.”

Amen.