Secret Funding of U.S. Chamber's Political Ads Would Be Banned Under Bill
U.S. companies would lose their ability to secretly finance political advertising run by organizations such as the U.S. Chamber of Commerce under a bill being considered by Democratic lawmakers.
The proposed legislation is a response to a Supreme Court ruling that allows corporations to spend unlimited amounts of their own money on political ads that call for electing or defeating candidates. The Jan. 21 decision triggered concern that companies would funnel unprecedented sums of cash into the Chamber’s system of anonymously funded pro-business campaigns.
President Barack Obama criticized the court opinion in his Jan. 28 State of the Union address, saying it would “open the floodgates for special interests.” The bill, which may be introduced as early as next week, would require nonprofit groups, unions and trade associations including the Chamber to identify who pays for ads designed to sway opinion on candidates for federal office.
“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,” said Craig Holman, who handles campaign finance issues for Public Citizen, a Washington group that supports more regulation of political giving.
The nation’s biggest business lobbying group, the Chamber spent $47 million on so-called issue advertising last year, mostly on health-care policy, according to Kandar Media’s Campaign Media Analysis Group in Arlington, Virginia. The Chamber has said it plans to spend $50 million on candidate- focused ads alone this year.
$144 Million in Lobbying
An additional $144 million of Chamber spending went for lobbying last year, more than five times that of the second- largest spender, Exxon Mobil Corp. That spending isn’t affected by the court ruling or proposed legislation.
The Chamber had fought what it called the suppression of company participation in elections, and hailed the Supreme Court decision in the case, Citizens United v. Federal Election Commission. The proposed legislation would gut what appeared to be a victory for the group.
“Citizens United is being used as a pretext to pursue much broader regulations of the private sector in the political arena,” said Steven Law, the Chamber’s general counsel. “Their interest is to intimidate the business community into unilateral disarmament” while allowing unions to spend millions of dollars, he said.
The Supreme Court ruling will have a “very limited impact” on the political activity of the Chamber and most businesses, according to Law.
Through Trade Groups
Should Congress fail to act, “the vast majority of corporate money will move through trade associations and independent organizations,” said Michael Toner, a former Republican chairman of the Federal Election Commission and a partner at Bryan Cave LLP in Washington.
“You don’t want a disclaimer to say, ‘Paid for by Exxon Mobil.’ It’s far more effective to say, ‘Paid for by the U.S. Chamber of Commerce,’ ” Toner said.
Representative Chris Van Hollen, a Maryland Democrat, and Democratic Senator Charles Schumer of New York said in February they planned to introduce the legislation.
“We’re exploring ways to enhance transparency and disclosure of a range of political expenditures,” Van Hollen said in a March 28 statement.
The proposed legislation would require disclosure of contributors to ads urging voters to support or oppose a federal candidate, Van Hollen said. It also may extend that requirement to so-called issue ads that favor or oppose an office seeker without explicitly recommending a vote, he said.
Pre-Election Ban Dropped
In addition to allowing spending from corporate and union treasuries to support or oppose candidates, the Supreme Court struck down a ban on such ads within 60 days of a general election and 30 days of a primary vote.
Even before the ruling, companies could fund so-called issue ads, and that continues, the Chamber’s Law said.
Disclosing that ads were funded by a particular corporation would diminish their effectiveness, said Heather Gerken, a law professor at Yale University in New Haven, Connecticut.
“Corporations may be the one institution less popular than Congress,” Gerken said. “Those well-funded campaigns may be far less popular if the people know who’s funding them.”
The legislation probably would have sufficient Republican support in the Senate to overcome a filibuster, while the House of Representatives has enough Democrats backing it to assure passage, Public Citizen’s Holman said. The bill may be introduced when Congress returns from its Easter recess next week, he said.
Schumer said in an interview on March 29 that he was trying to round up enough Senate Republicans to get the 60 votes needed to shut off a filibuster.
Five current Republican senators supported 2002 campaign- finance legislation that was partially invalidated by the Supreme Court, and four -- Susan Collins and Olympia Snowe of Maine, Richard Lugar of Indiana and John McCain of Arizona -- have criticized the January decision.
“It is critical that campaign finance laws include strong transparency provisions so the American public knows who is contributing to a candidate’s campaign,” said Kevin Kelley, a spokesman for Collins.
With funding from companies that didn’t disclose their roles, the Chamber ran ads in support of 10 Senate Republican candidates in 2008, spending more on those races than any other outside group, according to the Campaign Media Analysis Group.
‘The Big Dog’
The Chamber weighed in this year during the Massachusetts special election that sent Republican Scott Brown to the Senate to replace the late Edward M. Kennedy, breaking the Democrats’ filibuster-proof majority. The business group spent $1 million urging voters to “call Scott Brown and thank him for supporting a plan to fix our economy.”
“Election after election has proven that the Chamber is the big dog,” said Mike Gehrke, a spokesman for the Washington- based union federation Change to Win, which supports disclosing contributors. “People who are worried about corporate influence in elections need to be worried about the Chamber.”
Some companies do report their contributions to the Chamber, including Intel Corp., the world’s biggest semiconductor maker, which says it gave $286,583 in 2008.
Those funds “are aimed at advocacy on issues and are not earmarked for particular political campaigns,” said Chuck Mulloy, a spokesman for Santa Clara, California-based Intel. Intel “would have to assess” any proposed legislation before commenting, he said.