Legislative Proposals Responding to Citizens United

State Legislation and Campaigns

On April 14 2010, the Wisconsin State Senate approved a bill requiring corporations obtain approval from their stockholders before spending money to influence elections. The bill was introduced after Citizens United nullified replaced a centuries-old ban on corporate contributions to state elections. The bill now goes to the State Assembly for approval.

The New York State legislature is considering a similar bill requiring corporations be more accountable to shareholders.

The Iowa state senate responded to the Citizens United decision by proposing a bill to limit corporate campaign spending. The main goal of the bill is to level the playing field.

Key Points of the Bill include:

- reporting of receipts and independent expenditures by corporations engaged in independent campaign activities

- Barring collusion between corporations and political candidates...including same advertising firms and campaign advisors

- Disclaimers on ads paid by corporations

- requiring shareholder or board approval before using corporate funds for campaign expenditures

- barring foreign corporations from becoming involved in Iowa elections

New York's Public Advocate, Bill de Blasio has started a national shareholder campaign. The campaign calls for more transparency and accountability regarding all the millions of dollars that corporations spend in elections.

The Washington State Senate has introduced a resolution asking the U.S. Congress to pass around a Federal Constitutional Amendment limiting corporate political activities, to the states. .

The Washington State Senate and House have each introduced bills to provide public funding for Washington State Supreme Court campaigns. .

US Congress' Legislative Proposals

DISCLOSE Act

The DISCLOSE Act is a a bill proposed by Senators Chuck Schumer (N-New York), Russ Feingold (D-Wisconsin) and Patrick Leahy (D-Vermont) in mid-2010 as a direct response to the U.S. Supreme Court's ruling in the Citizens United case. The Act passed the house in June, 2010 but failed to pass the Senate in September due to united Republican opposition. (Read more about the Disclose Act on its SourceWatch entry).

April 2010

Rep. Chris Van Hollen (D-Md.) and Sen. Charles Schumer (D-N.Y.) plan to introduce legislation to counteract Citizens United by late April, and are working to line up Republican support to make the bill bipartisan. [10]

POLITICO reports on the seven major points in the "Democracy is Strengthened by Casting Light on Spending in Elections" (DISCLOSE) Act:

1. Enhance Disclaimers: Make CEOs and other leaders take responsibility for their ads.

If a corporation, union, section 501(c)(4), (5), or (6) organization, or section 527 organization spend on campaign-related activity, its CEO or organization head will have to stand by the ad and say that he or she “approves this message,” just like candidates have to do now. In order to seek out the real money behind the ad, this legislation will drill down several layers and require the top contributor directing the funds to also “stand by the ad.” Additionally, we require the top five contributors to an organization to be listed on the screen.

2. Enhance Disclosures: It is time to follow the money.

Any covered organization must disclose within 24 hours to the FEC not just its campaign-related activity, but also transfers of money to other groups which can then be used for campaign-related activity. Additionally, a covered organization must disclose its donors and has two options: 1) it can disclose all of its donors $1,000 and above; or 2) it can set up a “Campaign-Related Activity” account and disclose only those political donors to that account $1,000 and above. If, however, the organization dips into its general account for funds, it must then disclose all its general treasury donors in excess of $10,000. In both options, the Act allows for organizations to “wall-off” donations if the donor does not want the money to go to campaign-related spending.

3. Prevent Foreign Influence: Foreign countries and entities should not be determining the outcome of our elections.

Corporations that have either 1) a foreign entity controlling 20% of its voting shares; 2) foreign nationals comprising a majority of its board of directors; 3) a foreign national who directs, dictates, or controls U.S. operations; or 4) a foreign national who directs, dictates, or controls political decision-making are banned from spending in U.S. elections. If a corporation is under the direction or control of a foreign entity, it should not be able to spend money on our elections.

4. Shareholder/Member Disclosure: We should allow shareholders and members to know where money goes.

This provision would mandate disclosure by corporations, unions, and other groups to their shareholders and members in their annual and periodic reports. This would also require these groups to make their political spending public on their websites within 24 hours after filing with the FEC.

5. Prevent Government Contractors from Spending: Taxpayer money should not be spent on political ads.

Due to the appearance of corruption and possible misuse of taxpayer funds, government contractors with a contract worth more than $50,000 will not be allowed to spend money on elections. Similarly, TARP recipients who have not paid back government funds are also banned from spending.

6. Provide the Lowest Unit Rate for Candidates and Parties: Special interests should not drown out the voices of the people.

If a covered organization buys airtime to run ads that support or attack a candidate, then candidates, parties, and party committees get to take advantage of the lowest unit rate for that market. This provision is limited specifically to that media market. Additionally we improve the reasonable access provisions to ensure that candidates are not shut out of airtime.

7. Tighten Coordination Rules: Corporations should not be able to “sponsor” a candidate.

Loopholes in current coordination rules would be filled, thereby banning coordination between a candidate and outside groups on ads that reference a candidate from the time period beginning 90 days before a primary and running through the general election. At the same time, rules limiting coordination between the party and the candidate are loosened a bit to allow for effective responses to the influx of corporate and special interest money.

Read more: http://www.politico.com/news/stories/0410/36303.html#ixzz0mRKCYyK4

Effect of Van Hollen & Schumer's Proposal on the United States Chamber of Commerce

Bloomberg's Business Week reports that the legislation could help prevent corporations from secretly financing political advertising by funneling money through the U.S. Chamber of Commerce.

The article reports that the corporate-funded Chamber of Commerce is actually the nation's biggest business lobbying group, last year spending $144 million lobbying on behalf of corporate interests, and $47 million on political ads (mostly regarding health care policy). Under Rep. Van Hollen and Sen. Schumer's proposed legislation, contributors to advocacy ads urging support for a political candidate would be required to disclose their identity. In other words, the legislation would require a political ad to say "paid for by Exxon Mobil" rather than the more innocuous "paid for by the U.S. Chamber of Commerce."

A Public Citizen representative told Business Week that “the Chamber is going to end up with at least one very undesirable element: The public is going to know exactly which corporations are the major funders.” [11]

Other Federal Congressional Action

Representative Alan Grayson (FL,Democrat) introduced a bill in Congress on January 13, 2010. The bill seeks to amend the IRS code to impose a 500% excise tax on corporate contributions to political committees and on corporate expenditures on political advocacy campaigns.

Senator Al Franken (MN,Democrat) introduced a bill in Congress in late January that aims to protect local, state and federal elections from the influence of foreign corporations. . The bill seeks to prevent foreign corporations from making any donations or expenditures in local, state or federal elections. [12]. The bill attempts to address the complex nature of transnational corporations as well. [13].

Similar bills have also been introduced by Rep. Bill Pascrell, Rep. John Hall, Rep. Tom Perriello, and Rep. Rosa L. DeLauro. [14] [15] [16] [17].

Representative Niki Tsongas (MA,Democrat) introduced a bill into the house titled: "No Taxpayer Money for Corporate Campaigns Act of 2010."

Representative Michael Capuano introduced a bill to the House that would amend the SEC Act of 1934 to require express authorization of a majority of shareholders of a public company for certain political expenditures by that company. .

Constitutional Amendment Proposal

Congresswoman Donna Edwards and House Judiciary Committee Chairman John Conyers, Jr., have introduced a Constitutional Amendment to overturn the Supreme Court's ruling in Citizens United, an amendment which now has 23 additional co-sponsors in the US House of Representatives.

The Nation Magazine has a [18] on the proposed Amendment, including a list of supporters. The Progressive Magazine also has a cover article urging a Constitutional Amendment to counteract the Citizens United decision.

Pre-Citizens United Legislative Proposals

In March 2009, Senators Dick Durbin and Arlen Specter and Representatives John Larson and Walter Jones introduced bills in both the House and Senate entitled, the Fair Elections Now Act. .

Text of Senate Bill Text of House Bill

The Senators and Representatives, Durbin, Spector, Larson and Jones, held a discussion event with Center for American Progress in December 2009. The discussion transcript is available: [19]

In 2007, Senators Charles Schumer and Arlen Specter introduced a provision to regulate corporate spending, which had bipartisan support from Senators Thad Cochran and Tom Harkin:

Section 1. Congress shall have power to regulate the raising and spending of money, including through setting limits, for campaigns for nomination for election to, or for election to, Federal office.

Section 2. A State shall have power to regulate the raising and spending of money, including through setting limits, for-- (1) State or local ballot initiatives, referenda, plebiscites, or other similar ballot measures; and (2) campaigns for nomination for election to, or for election to, State or local office.

Section 3. Congress shall have power to implement and enforce this article by appropriate legislation.