CAP Calls for Administration to Take Action through IRS, SEC, Federal Contractors

Center for American Progress: “”Specifically, CAP is calling on the executive branch to act in the following three areas:

  • IRS rulemaking on political activity by nonprofit organizations: Current regulations enable so-called dark-money groups to masquerade as 501(c)(4) “social welfare” organizations, thereby avoiding campaign finance disclosure laws. The IRS should clarify the rules for 501(c) organizations and should also tackle the problem of undisclosed political spending more directly by amending the regulations for Section 527 of the tax code. Rather than simply regulating dark money groups out of Section 501(c), the IRS should regulate those groups into Section 527 and thereby mandate public disclosure of donors.
  • Political activity by federal contractors: The executive branch should mandate further disclosure of political spending by federal contractors and should furthermore require those contractors take steps to ensure that they are not making impermissible federal political contributions.
  • SEC rulemaking: Currently, there is no rule requiring corporations to disclose political activity expenditures to their shareholders. The SEC should prioritize the development and implementation of a political activity disclosure rule. This corporate transparency would not only help to ensure that corporate spending is in line with shareholder interest, but it would also combat the problem of dark money.”

More information here.

Good Overview on Disclosure, Way Forward

Mint Press News: “But it’s not just disclosure exemptions and cleverly promoted television ads that have prompted public concern. Since the Supreme Court’s Citizens United decision in 2010, the unlimited contribution and outside spending amounts have prompted various advocacy groups and legislators to push for remodeling campaign finance and disclosure policies in their states.

“‘Most do not have great disclosure laws or conflict of interest laws,’ Mansur Gidfar, communications director for anti-corruption group Represent.Us, told MintPress. ‘In a lot of cases, every situation around the laws that govern how money interacts with the political process is actually a lot worse at the state level than it is at the federal level.'”

“‘Under current law, regardless of how biased the endless amounts of political ads are in support of or are against a specific candidate, the source of funding for an ad does not have to be disclosed if the ad does not explicitly use the phrases ‘vote for’ or ‘vote against.’

“‘You can spend an unlimited amount of money sending out mail in a legislator’s district saying that Legislator X … has done a terrible job for you,’ [Minnesota state Rep Ryan] Winkler told MintPress.

“But despite any insinuations, the nonprofit organizations can claim their ads are educating voters on an issue, not politicking, as long as they don’t employ those ‘magic’ words.”

FEC to Consider Loosening Rules on PACs to Draft Candidates

National Journal: “The current interpretation of the rules allows draft groups to raise funds for a specific prospective candidate, which would then be given to that candidate if he or she decides to run before the filing deadline for the race the draft group identified.

“Under the guidelines expected to be approved Thursday, the groups will have more options on what to do if their candidate doesn’t run. The rules would allow a draft group to promise would-be donors that if their preferred candidate doesn’t enter the race, the money would then go to a second candidate. For example, they could say that if Warren doesn’t run, the money would instead go to Sen. Bernie Sanders. The new rules would also give the groups more leeway to set deadlines for their candidates to enter the race.

“The new rules would also allow groups to raise money for a candidate who fits certain criteria. Specifically, a group could raise funds for ‘the first female president,’ which would go to the eventual party nominee should the nomination go to a woman.”

Sunlight Foundation Calls for Limits on Revolving Door with SuperPACs

Sunlight Foundation: “But while a candidate can’t work with a super PAC because of the big money they raise, once elected he can hire the person who persuaded all those donors to write big checks. (The biggest check that SOFA got was $120,000 from Robert Mercer, the CEO of hedge fund Renaissance Technologies.)

“It happens on both sides of the aisle, and it’s been happening for a long time. Harold Ickes, whom Bill Clinton had to fire from his White House job after the campaign finance scandals of the mid-1990s, reportedly ran the Democratic National Committee — and its prolific soft money operation — from the West Wing of the White House. That’s one reason that the Clintons, both Bill and Hillary, hosted coffees in the White House map room for big donors and why the Lincoln Bedroom became a “”Fat Cat Hotel.””

“Just like we bar former government officials from lobbying their old colleagues for a year or more after they leave office, barring individuals who just got done soliciting six- and seven-figure checks from working in Congress and the executive branch for a couple of years would certainly be within Congress’ power. And it would keep people with lots of favors to repay out of the corridors of power.”

Groups Push to Tighten, Loosen SEC Limits on State Contributions

Wall Street Journal (12/28): “The rule effectively prohibits certain employees of financial-services companies that do—or might do—business with state agencies from contributing to the officials who oversee those agencies. The rule, adopted in 2010, was intended to prevent political contributions from influencing state contracting decisions.

“Critics say the SEC rule’s effectiveness could be blunted in 2016 by the rise of super PACs, which can raise money without contribution caps but can’t coordinate with or give to candidates’ campaigns, as well as politically active nonprofit groups. In particular, they point to the increasing number of super PACs that form to support only a single candidate. Critics argue that a contribution to a group that spends money on behalf of a single candidate is akin to giving to the candidate.

“Others say the SEC rule should be eliminated, not expanded, with some noting that it creates an advantage for members of Congress, who aren’t subject to the rule, over governors in campaign fundraising. Some states have rules that are even more restrictive than the SEC’s.”

Senators to Push for Requiring Electronic Disclosure

Politico: “”Unlike House candidates, presidential hopefuls and political action committees, Senate candidates are not required to electronically file their campaign finance reports. The result: Reporters, campaign finance experts and everyone else must manually scroll through Sen. Mary Landrieu’s latest pre-runoff fundraising report, which clocks in at nearly 1,300 pages and is not searchable.”

Senate Leader Attempts to Use Rule Change, Money Machine to Maintain Control

Politico: “Before he even takes the reins as Senate majority leader, McConnell and his allies are quietly trying to engineer a bold plan that would enable party leaders to rely more on major contributions to independent groups while also removing restrictions on the ability of the National Republican Senatorial Committee and other party committees to interact with candidates.

“The outside cash would be raised by a pair of linked groups — a super PAC and 501(c)4 nonprofit — that could accept unlimited cash to boost key GOP Senate candidates, according to sources familiar with the plan. The inside cash would flow to the NRSC, which could operate more freely under an election law change McConnell began pushing this week.

“The outside cash would be raised by a pair of linked groups — a super PAC and 501(c)4 nonprofit — that could accept unlimited cash to boost key GOP Senate candidates, according to sources familiar with the plan. The inside cash would flow to the NRSC, which could operate more freely under an election law change McConnell began pushing this week.”