Veiled Political Actors: The Real Threat to Campaign Disclosure Statutes

Abstract:     
Disclosure statutes have not been the focus of much scholarly attention, particularly in the legal academy. This lack of attention is unfortunate because the design of disclosure laws is crucial in several ways. First, the constitutional test applied to campaign finance laws, including disclosure, requires that statutes be narrowly tailored to serve an important state interest. In addition, targeting is important for the effectiveness of disclosure laws. Voters have limited time and attention, so they should be provided the information most crucial to improving their ability to vote consistently according to their preferences. Finally, current experience with campaign regulation demonstrates that entities adopt strategies to circumvent restrictions, so statutes must be drafted to reduce opportunities for evasion. This study sheds light on some of the evasive tactics by political entities that wish to avoid disclosure relating to the source and extent of their spending on ballot questions. These veiled political actors (VPAs) take advantage of regulatory loopholes to spend substantial amounts of money to influence the outcomes of initiative and referendum elections while avoiding publicity of their efforts. Part I describes the interest served by disclosure beyond enforcing other campaign finance regulations or exposing quid pro quo corruption of candidates. We argue that improving voter competence is the most persuasive rationale in direct democracy and leads to various conclusions about the structure of effective disclosure laws. In Part II, we assess the jurisprudence relating to disclosure statutes in direct democracy to provide a sense of the legal hurdles such statutes must overcome, hurdles that become more daunting the more burdensome disclosure is for political actors. The jurisprudence suggests that targeted disclosure statutes will survive judicial scrutiny. Part III presents our description and analysis of various VPAs organized under federal and state laws that are used currently to evade disclosure restrictions in initiative campaigns. Part IV provides preliminary conclusions.

Working Paper Series