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Lawmaker Sues To Shine Light On Political Donations

Rep. Chris Van Hollen (D-MD) and a team of campaign finance lawyers have launched a legal attack on two rules written by the Federal Election Commission — rules that currently shield wealthy and corporate donors from public identification.

The challenge, in a lawsuit against the FEC and a separate petition to the agency, comes as opponents of big money in politics struggle to regain the offensive. After years of court decisions that went against them, advocates who once fought to set tougher limits on contributions are now fighting to save transparency.

Their immediate objective is to compel public disclosure of wealthy donors and corporations now being solicited to bankroll attack-ad campaigns in 2012.

The rules challenged by Van Hollen apply to the hot new sources of political finance. Corporate contributions were spurred by last year's Supreme Court Citizens United ruling, which lets companies and unions spend freely on partisan political advocacy. And other recent court rulings have encouraged political contributions by wealthy individuals.

"The only reason we had more than $135 million in secret contributions in 2010 congressional races is because the FEC had adopted improper disclosure regulations," says Fred Wertheimer, one of Van Hollen's lawyers in the lawsuit.

The secret contributions were raised by outside money groups such as Crossroads GPS and American Action Network, and were used mostly to finance attack ads on TV.

The lawsuit contends that Congress wants the money behind such ads to be disclosed, and explicitly said so in the McCain-Feingold campaign finance law of 2002. The suit argues that the FEC gutted those disclosure provisions when it wrote the regulations to carry them out.

The regulations require disclosure in just two circumstances, both easily avoidable: First, if the donor earmarks the money for a particular ad buy; and, alternatively, if the outside money group puts the money into a special advertising account.

Defenders of the FEC say the agency was simply using common sense in interpreting McCain-Feingold.

"The FEC, for I think some pretty good reasons, have decided that the type of extensive and intrusive and burdensome disclosure regime simply is not practical," says Sean Parnell of the Center for Competitive Politics, which takes a dim view of mandatory disclosure.

The lawsuit intensifies a growing battle over secret money and disclosure.

Last year Republican senators blocked disclosure legislation, and then conservative groups dominated the outside-money game in the midterm elections. Democrats, including President Obama, attacked the anonymous contributions, but the issue didn't show any traction in polls.

Now liberals are launching their own outside money groups. Some are organized as "superPACs," political committees with a transparency mandate, while others are tax-exempt 501(c)(4) entities, working behind a veil.

"While this may not be the system that we all want, these are the rules of the game now, and we need to fight to win," says Chris Harris, spokesman for the new liberal superPAC American Bridge.

At Crossroads GPS, a conservative group that does not disclose, spokesman Jonathan Collegio says the controversy over transparency may be diminishing.

"Now that we see that center-left groups are doing the same as the center-right, it does provide a degree of certainty to the donors who want to give to these groups," he says.

But that may be wishful thinking. The disclosure issue is alive on several fronts.

The White House is weighing whether to require all federal contractors to disclose their campaign giving, along with that of their executives, affiliates and subsidiaries.

Shareholder advocacy groups are pressing corporations to reveal their political spending.

A media watchdog group is petitioning the Federal Communications Commission for mandatory disclosure of the donors behind TV ads, regardless of what the Federal Election Commission might do.

And Wertheimer says his legal team is laying the groundwork for a filing at the Internal Revenue Service, the agency with the most regulatory power over nondisclosing 501(c)(4) organizations.

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