Campaign-Spending Bill Blocked in U.S. Senate by Republicans

Senate Republicans today blocked legislation that would require corporations and unions to disclose their spending on political advertising.

All 41 Republican senators voted to prevent the bill from reaching the Senate floor. The vote was 57-41, with 60 votes needed to advance the measure.

Senate Democrats proposed the bill in response to a U.S. Supreme Court decision in January that overturned a decades-old ban on companies using general-treasury money to run campaign ads supporting or opposing candidates in federal elections. Democrats argued that if such spending is to be allowed, it should be disclosed.

“Neither the American voter at home nor the democratic process at large benefits from campaigns funded by secret sponsors who are hidden from public view,” Senate Majority Leader Harry Reid of Nevada told reporters before the vote. “Senate Republicans are now running away from transparency and accountability in our elections.”

Among the senators voting to block the bill was Republican John McCain of Arizona, whose landmark 2002 campaign finance law was partially ruled unconstitutional by the Supreme Court decision. McCain’s co-sponsor, Wisconsin Democrat Russell Feingold, had urged people in an e-mail to call their senators and ask them to support the legislation.

Senate Republican leader Mitch McConnell of Kentucky said the legislation was an attack on free-speech rights and would silence those who disagreed with the Democratic majority. “The one goal is to get people who would criticize them to stop talking,” he said.

Issue Ads

Senator Charles Schumer, a New York Democrat and the bill’s chief sponsor, said no one’s ability to speak would be diminished.

“All we are saying is, if you attack us, put your name on the ad,” Schumer said. He told reporters that Democrats will “go back at this bill again and again and again until we pass it. It’s that vital.”

The bill would affect all political advertising, including issue ads that are designed to elect particular candidates without directly asking voters to support or oppose them. It also would require companies to disclose donations to third- party groups that air campaign ads.

Corporations and unions seeking to support candidates had previously been required to spend through regulated political action committees. Companies are still banned from contributing directly to candidates.

President Barack Obama criticized the Supreme Court decision in his State of the Union address, and yesterday he urged Republicans to let the measure come to the floor. The vote is “about how much influence special interests should have over our democracy,” he said.

Chamber of Commerce

The bill would require trade associations like the U.S. Chamber of Commerce to reveal for the first time which companies are funding their political ads. The chamber led an effort to defeat the legislation, sending a letter to the Senate yesterday signed by 309 organizations.

Union-funded organizations running ads for or against candidates also would have to disclose their donors.

Supporters of the legislation, which passed the House in June, unsuccessfully sought support from moderate Republicans including Scott Brown of Massachusetts and Olympia Snowe and Susan Collins of Maine in an effort to bring the bill to the Senate floor.

“The court’s decision has left no choice but to enact new disclosure laws,” said Lisa Gilbert, who handles campaign finance issues for the Boston-based U.S. Public Interest Research Group, which supports stronger campaign finance laws. “This bill is necessary to protect the integrity of our elections.”

The measure would bar political spending by companies with more than $10 million in government contracts and institutions that haven’t repaid money from the Troubled Asset Relief Program passed in 2008.

Foreign-owned corporations also would be barred from political spending, though the ban wouldn’t apply to their U.S. subsidies’ political action committees.

The bill is S. 3628.

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net.

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