Focus is on maximum disclosure of political spending

-By Eartha Jane Melzer

September 19, 2011- Last year’s U.S. Supreme Court decision in Citizens United v. Federal Election Commission granted corporations (and unions) the right to directly and expressly back political candidates, and triggered an enormous new wave of political spending. Now watchdog groups are trying to find ways to make sure voters can see who is funding which candidates.

In a web seminar sponsored by the Business Ethics Network last week, groups concerned about the role of money in politics gathered to review strategies for increased disclosure.

Norm Ornstein, a scholar with the American Enterprise Institute, who once helped craft the McCain-Feingold campaign finance act, said that he was struck and “even a little bit heartened” by the fact that Sarah Palin railed against crony capitalism during her Labor Day speech in Iowa saying, in effect, “what do we suppose those fat cats want for their money?”

“It suggests to me,” Ornstein said, “that there is at least a glimmer of a possibility that we might be able to build a very unusual type of coalition against what has become an utterly appalling landscape of influence peddling by enormous monied interests and more and more overt, almost shakedown schemes by political figures to get the money they want from corporations and individuals.”

The Citizens United decision did not strike down any rules that require disclosure of political spending, but loopholes in the tax system and lax campaign finance rules allow corporations to give money in ways that are very hard to track, disclosure advocates say.

According to an analysis by the Center for Responsive Politics in the 2010 election 67 percent of all outside (non political party) spending came from groups that had been freed to contribute by the Citizens United decision with non-profit 501(c) groups dominating spending on election ads.

IRS rules state that 501(c)(4) groups don’t have to name their contributors as long as electioneering is not their primary purpose, but this can be difficult to enforce in a meaningful way. Groups can form and carry out campaign work and then later switch to other activities so that political projects don’t appear to dominate their activities.

With Congress deadlocked over most issues, campaign finance reform advocates say it’s more prudent to focus on promoting regulatory measures that could increase disclosure.



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