04.29.10

Leahy Joins As A Leading Cosponsor Of Bill To Help Remedy Supreme Court’s Citizens United Campaign Finance Decision

WASHINGTON – Senator Patrick Leahy (D-Vt.) joined other Senate leaders Thursday to introduce legislation addressing the Supreme Court’s decision earlier this year in the Citizens United v. Federal Election Commission case, in which five Justices overturned decades of campaign finance law, as well as the Court’s own precedent.

Leahy has been a leading voice in opposition to the Court’s decision, the impact of which could play a serious role in elections across the country in November and beyond.  Leahy and others on Thursday introduced the Democracy Is Strengthened by Casting Light On Spending in Elections Act (DISCLOSE Act) to help curtail corporate influence in elections.  The proposed legislation would strengthen campaign finance laws to ensure that individual Americans – not corporate entities and other organizations -- are still the primary players in the country’s elections.

“Earlier this year, with the stroke of a pen, five Supreme Court justices cast aside a century of law and opened the floodgates for corporations to dominate American elections,” said Leahy.  “It is difficult to overstate the potential for corrosive harm embodied in this stunning decision.  It threatens a dimming of our democratic ideals, a corruption of the practical functioning of our election and political systems, and a deflating blow to the Court’s most precious asset, its own credibility, based on the public’s trust.  The DISCLOSE Act would fortify several parts of our campaign finance laws to ensure that individual Americans still take the primary role in our electoral process.”

As chairman of the Senate Judiciary Committee, Leahy earlier this year held a hearing to explore the impact of the Citizens United decision.  The decision, handed down in January, is the latest in a series of narrowly decided cases considered by the Supreme Court.  In many of them, including Citizens, just five Justices, comprising what is considered the conservative bloc of the Court, have ruled for large corporations and against ordinary Americans, in cases that included such basic pocketbook issues as pay inequities for women and others, age discrimination against older workers, and a $2 billion scaling back of the judgment against Exxon Mobil in the Exxon Valdez oil spill disaster.

“I know that the people of Vermont, like all Americans, take seriously their civic duty to choose wisely on election day,” Leahy said.  “Vermonters cherish their critical role in the democratic process and are staunch believers in the First Amendment.  The rights of Vermonters and all Americans to speak to each other, to be heard, and to select their representatives in government through a fair process that honors these values, should not be diluted and undercut by corporate spending.  That is the clear danger ahead, unless we restate these values in law.  The DISCLOSE Act is a timely and constructive first step in doing just that.”

The legislation is expected to advance through the Senate Rules Committee, which is chaired by Senator Chuck Schumer (D-N.Y.), the lead sponsor of the legislation.

The DISCLOSE Act will:

  • Prevent foreign influence by banning corporations under the direction or control of a foreign entity from spending in U.S. elections
  • Enhance disclaimers to identify sponsors of political ads, making CEOs and other leaders responsible for advertising they fund
  • Enhance disclosures by requiring organizations to disclose to the Federal Election Commission within 24 hours not just spending on campaign related activity, but also transfers of money to other groups which can then be used for campaign-related activity
  • Mandates disclosure of political spending by corporations, unions, and other groups to their shareholders and members in their annual and periodic reports
  • Prevents government contractors with contracts worth more than $50,000 from spending money on elections.
  • Requires that candidates and political parties are given the lowest unit rate in television markets to prevent special interests from drowning out other voices in the election
  • Tightens rules to ban coordination between candidates and outside groups on advertisements that reference a candidate beginning 90 days before a primary through the general election

The full text of Leahy’s statement on the introduction of the DISCLOSE Act follows.  A brief summary is also available below.

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Statement Of Senator Patrick Leahy (D-Vt.),
Chairman, Senate Judiciary Committee,
On Introduction Of
The Democracy Is Strengthened By Casting Light On Spending In Elections Act (DISCLOSE Act)
April 26, 2010

Earlier this year, with the stroke of a pen, five Supreme Court justices cast aside a century of law and opened the floodgates for corporations to dominate American elections, in the case called Citizens United v. Federal Election Commission.  Those five conservative justices substituted their own preferences for those of Congress, which had built on decades of law and precedent to pass the bipartisan McCain-Feingold campaign finance reform law after an open and extensive debate.

It is difficult to overstate the potential for corrosive harm embodied in this stunning decision.  It threatens a dimming of our democratic ideals, a corruption of the practical functioning of our election and political systems, and a deflating blow to the Court’s most precious asset, its own credibility, based on the public’s trust.

In order to reach its divisive decision giving corporations, banks and insurance companies rights that were once were reserved for individual Americans, the Court rejected not just the conclusions of the elected branches of our system of Government, but also its own binding precedent of upholding the very same law it now chooses to overturn.  

This brash and wayward upheaval of precedent and principle should not stand, and I hope it will not stand.  I am pleased today to join with Senator Schumer and other Senators to introduce the Democracy Is Strengthened by Casting Light On Spending in Elections Act (DISCLOSE Act) to help stem the tide of corporate influence unleashed by five Justices in the Citizens United decision.  The DISCLOSE Act would fortify several parts of our campaign finance laws to ensure that individual Americans still take the primary role in our electoral process.

Our Constitution begins with the words “We the People of the United States.”  In designing the Constitution, the Founders spoke of, thought of, and guaranteed fundamental rights to the American people -- not to corporations.  Common sense alone should be enough to convince anyone and any jurist that corporations are not the same as individual citizens, and in our election laws, they should not be treated as though they are.  Corporations do not have the same rights, morals or ideals.  Corporations cannot vote.  For so-called originalists, I note that corporations are mentioned nowhere in the Constitution.  These straightforward observations have been recognized in countless judicial decisions through the years, as well as in the bipartisan campaign finance reforms that Congress fully debated and worked to enact.  All of this used to go without saying.  But if it needs to be said again in law, let us say it -- and firmly enough for any court to hear. 

I have long supported and worked on reforms to help counter the corruptive influence of money.  The most recent example is the Senate’s work this month to address the corporate greed that is the backdrop of our efforts to end the Wall Street abuses and secrecy that recently threatened to bring down our entire economy.

The American people I am sure hope there will be bipartisan support for remedies to prevent corporations from drowning out their own voices in our elections.  But some on the other side of the aisle have praised the Citizens United decision, as the Republican party has run to court to try to leverage the decision to bypass other legal restraints.  What the defenders of this decision fail to acknowledge is that these new rights for corporations come at the expense of the rights of hard-working Americans.  It is both saddening and illuminating to see that campaign operatives such as Karl Rove are rushing to hold strategy sessions with Republican leaders about how to use this new corporate spending to influence our upcoming election.  The moneyed corporations that can now dominate the airwaves and election discourse will crowd out a multitude of individual voices. 

The DISCLOSE Act takes several steps to help ensure that the playing field in elections remains fair for individual Americans who, after all, are real people, not corporate entities.

First, the bill would limit the ability of foreign corporations to influence American elections by banning foreign corporations from spending money on U.S. elections.  This is a matter not directly addressed by the conservative majority in Citizens United.

Second, it would thwart corruption by banning those corporations receiving taxpayer money from spending on elections.  In other words, government contractors like Halliburton cannot use their influence with campaign spending to garner their next multi-million-dollar, taxpayer-funded contract with the Government.

Next, the DISCLOSE Act takes practical steps to ensure openness and transparency in American elections.  One of my ongoing efforts in the Senate has been to strengthen laws that honor the public’s right to know, such as the Freedom of Information Act, because sunshine – transparency and access to information – can be a self-enforcing tool of reform.  Under the new bill, corporations, unions and other entities that finance political advertisements would be required to clearly identify themselves, so Americans will know which interests are spending money on political campaigns.  And the bill includes the mandate that corporations disclose campaign spending to their shareholders, those who own the corporation.  The DISCLOSE Act will also ensure that candidates who are the targets of corporate-funded advertisements have the ability to purchase affordable airtime to respond. 

The Citizens United decision was only the latest in a series of recent activist Supreme Court decisions in which the preferences of five Justices led the Court to side with powerful interests by overturning laws enacted to protect the needs and interests of hardworking Americans.  The DISCLOSE Act would underscore that in the American system of government, our democratic underpinnings are intended to empower “We the People,” and not just corporations.

Vermont is a small state with a proud tradition of involvement in the democratic process.  It is easy to imagine corporate interests flooding the airwaves with election ads and transforming even local elections in our state.  It would not take much to outspend all of our local candidates combined.  If a local city council or zoning board is considering an issue of corporate interest, why would the corporate interests not try to drown out the views of hardworking Vermonters?  

I know that the people of Vermont, like all Americans, take seriously their civic duty to choose wisely on election day.  Vermonters cherish their critical role in the democratic process and are staunch believers in the First Amendment.  Vermont refused to ratify the Constitution until the adoption of the Bill of Rights in 1791.  The rights of Vermonters and all Americans to speak to each other, to be heard, and to select their representatives in government through a fair process that honors these values, should not be diluted and undercut by corporate spending.  That is the clear danger ahead, unless we restate these values in law.  The DISCLOSE Act is a timely and constructive first step in doing just that. 

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The DISCLOSE Act:

Democracy is Strengthened by Casting Light on Spending in Elections 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.    

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