34 Pages Posted: 7 Mar 2011
Date Written: March 1, 2011
Where do disclosure laws stand post-Citizens United? What does the 2010 U.S. Supreme Court ruling mean for state-based laws? And are disclosure laws constitutionally sound?
This report examines these questions and urges transparency through modest changes to state-based election laws. The report finds that recent Supreme Court decisions reaffirm the constitutionality of disclosure – and show an ongoing need to promote transparency in the money in politics realm.
The first part of the report offers a primer on campaign finance laws in 2011. In case after case, the U.S. Supreme Court has upheld the constitutionality of both disclaimers and disclosures for two types of political ads: (1) independent expenditures which expressly advocate for or against a candidate and (2) electioneering communications.
The second part of the report shows an urgent need for states to improve their disclosure laws in the wake of the Citizens United decision. In 24 states, new political players are now allowed into elections. Yet even in states that were not directly affected by the recent Supreme Court ruling, there is an urgent need to ensure that extant disclosure laws are in step with the way modern elections are conducted. Moreover, this report shows that states focus not only on spending by candidate committees and political parties, but also on outside spending by interest groups which is done independently of candidates or parties.
The third section explores the Constitutional interests states have in providing the voting public with robust disclosure of the sources of money in politics including:
•The Voter Informational Interest in Candidate Elections;
•The Anti-Corruption Interest in Candidate Elections;
•The Anti-Circumvention Interest in Candidate Elections;
•The Electoral Integrity Interest in Ballot Initiatives; and
•The Due Process Interest in Judicial Elections.
Policy suggestions are laid out in part four of this report. First, mimicking the campaign finance reporting that is required in federal elections, states should adopt laws to capture the funders of independent expenditures. Second, states should adopt disclosure for electioneering communications (or what are often known as “sham issue ads”). However, these disclosure laws should be crafted carefully to avoid capturing tiny political expenditures in state elections. Third, states can consider adopting disclosure laws that are more expansive than federal laws. For example, the federal law does not currently regulate electioneering communications that appear in print. But states may have many valid reasons for requiring disclosure of non-broadcast sham issue ads.
Given the expanded use of non-profits to veil political spending, states need to take a hard look at whether their current disclosure laws capture this type of spending adequately. Examples from California and Minnesota show how states might tackle this thorny issue through reporting requirements. An example from Connecticut also shows how states may achieve transparency through the use disclaimers which name top funders in the political ad itself.
Finally, this report encourages accountability for corporate political spending through modest changes to states’ corporate laws in addition to changes to their elections laws. These changes could include requiring companies to provide shareholders with a comprehensive list of political spending on a periodic basis and/or allowing shareholders the ability to vote on a corporation’s future political budget.
This report concludes that the Citizens United, Doe, and Caperton cases reaffirm both the constitutionality of disclosure and the continuing need for transparency around who is funding election battles. Consequently, states have wide latitude to require disclosures not only from classic political committees, but also any entity funding independent expenditures or electioneering communications in future state elections.
Keywords: campaign finance, money in politics, corporate political activity, disclosure, transparency, political spending, 501(c)(4), 501(c)(6), Citizens United, Doe v. Reed, Caperton, 2010 Election, Torres-Spelliscy
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