Corporate campaign ads haven't followed Supreme Court's prediction
Companies and unions have been able to avoid the transparency called for in the court's landmark ruling. Spending on next week's midterm election has been exorbitant.
The Supreme Court sent a wave of corporate and union money
flooding into campaign ads this year, but it did so with
the promise that the public would know - almost instantly -
who was paying for them.
"With the advent of the Internet, prompt disclosure of
expenditures can provide shareholders and citizens with the
information needed to hold corporations and elected
officials accountable for their positions," Justice Anthony
M. Kennedy wrote in January. "This transparency enables the
electorate to make informed decisions and give proper
weight to different speakers and messages."
But Kennedy and the high court majority were wrong. Because
of loopholes in tax laws and a weak enforcement policy at
the Federal Election Commission, corporations and wealthy
donors have been able to spend huge sums on campaign ads,
confident the public will not know who they are, election
law experts say.
Corporate donors have been able to hide their contributions
despite the opposition of shareholders and customers - the
very groups cited by Kennedy.
By an overwhelming margin, shareholders say they don't want
their companies devoting money to political ads. Customers
are also easily angered by corporate political stands. In a
recent case, Target Corp.'s chief executive was forced to
apologize after it was revealed the company had donated
$150,000 to the campaign of a Republican candidate in
Minnesota who opposed gay rights. The retail chain faced a
possible boycott led by gay rights activists.
"The biggest change this year is that it is no longer
possible to identify the individuals who are responsible
for funding election communications," said Karl J.
Sandstrom, a former FEC commissioner who advises Democrats
on election law.
He called Kennedy's opinion naive and said it reflected a
"very uninformed view of how disclosure works."
The high court ruling also has helped fuel the rise of
several nonprofit political action groups, such as
Republican strategist Karl Rove's Crossroads GPS, that have
poured millions into an election season that is quickly
reaching exorbitant spending levels.
Business groups, unions and interest groups had spent $266
million as of Tuesday, according to the Center for
Responsive Politics, including at least $128 million by
groups that are not required to publicly disclose their
donors. Some have said outside spending by conservative
groups alone could reach $400 million this year.
The Public Campaign Action Fund, a group that advocates for
public financing of campaigns, issued a report Tuesday
predicting that House candidates alone could spend as much
as $1.5 billion by the end of the campaign.
This year's election marks the first time in 100 years that
corporations and unions are free to spend their money on
election ads. In the past, both companies and unions could
encourage their employees or members to give money to
political action committees, which in turn could pay for
But in January, the Supreme Court, by a 5-4 vote, struck
down the legal ban on the use of corporate and union funds
for direct election ads. In Citizens United vs. Federal
Election Commission, the justices said that corporations
had the same right to free speech as individuals, and for
that reason the government could not stop corporations from
spending to help their favored candidates.
In the same decision, however, an 8-1 majority upheld the
disclosure laws as vital to democracy. That part of the
ruling has gone largely ignored.
The reasons, said Tara Malloy, a lawyer for the Campaign
Legal Center in Washington, are "weaknesses in the tax law,
radical under-enforcement by the FEC and the failure of
Congress" to enact a new disclosure law.
Under the tax code, nonprofit groups can register as
"social welfare" or other organizations, meaning they can
spend money on campaign ads without having their name
disclosed as long as their primary activity is not
political. In a little-noticed opinion in August, a divided
FEC took the view that big donors who fund ad campaigns
need not be disclosed unless the donor gave the money for a
That is "an impossible-to-meet standard," said former FEC
Chairman Trevor Potter, counsel for Arizona Republican Sen.
John McCain's presidential campaign, saying that almost any
contributor can remain anonymous.
Of course, some donors are happy to take credit for their
political spending. In recent weeks, union leaders and
officials of the U.S. Chamber of Commerce have boasted
about how much they are spending.
But in many cases, anonymity is a way for donors to avoid
backlash - and any unseemly appearances that they are
trying to sway an election with big money.
Anonymity also provides protection to some corporate
officials who might fear backing the wrong candidate. For
example, if a company spent a large sum on ads urging the
defeat of a powerful senator, it would have made an enemy
if the senator won reelection.
Last week, Public Citizen and several other liberal
advocacy groups complained to the FEC and accused the new
political committees of evading the law.
The public needs "to know which corporations and
billionaires are behind the attack ads now polluting our
airwaves," said Robert Weissman, president of Public
But Bradley A. Smith, another former FEC chairman and a
leading conservative foe of many of the campaign finance
laws, said such disclosure was unnecessary.
"Voters do know who is funding the ads - every single one
of them," he said.
Smith said the U.S. Chamber of Commerce discloses its
spending on election ads, as does Rove's group, even if
they do not specifically disclose their donors.
"Is there anybody who doesn't know where the chamber is
coming from?" he asked. "None of this troubles me in the
Kim Geiger in the Washington bureau contributed to this
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