Court Rules FEC Ignored Law; Shielded Political Donors From Disclosure

Rep. Chris Van Hollen (D-MD)

Rep. Chris Van Hollen (D-MD)

A 2007 regulation promulgated by the Federal Election Commission significantly de-fanged disclosure rules for outside groups engaging in “electioneering communications” shortly before federal elections. And even after the Supreme Court’s Citizens United ruling opened the floodgates for outside spending, the commission’s three Republicans have steadfastly blocked any efforts to even consider closing those loopholes to allow voters to know who is paying for the speech they now endure virtually non-stop.

But a recent federal court ruling against that FEC rule may force slightly more disclosure of previously secret political spending.

The Bipartisan Campaign Reform Act of 2002 (commonly known as McCain-Feingold or BCRA) required that those running electioneering communications — targeted broadcast, cable or satellite ads that refer to a clearly identified candidate for federal office and air shortly before an election for the office that candidate is seeking — disclose the sources of their funding. That law, signed by President George W. Bush, said that groups spending over $10,000 in a year on such ads must reveal, at a minimum:

the names and addresses of all contributors who contributed an aggregate amount of $1,000 or more to the person making the disbursement during the period beginning on the first day of the preceding calendar year and ending on the disclosure date

In 2007, in the wake of the Supreme Court’s Wisconsin Right to Life (WRTL) ruling (which struck down some spending restrictions imposed on those running “issue ads”) the FEC dramatically reinterpreted the disclosure rules, requiring disclosure only if the contribution was made “for the purpose of furthering electioneering communications.”

This huge loophole has meant that 501(c)(4) groups like Crossroads GPS are required to disclose only their donors who overtly earmark the donation for that communication. Very few donors have done so.

Last April, Rep. Chris Van Hollen (D-MD) challenged the regulation in federal court, arguing it was not consistent with the text of BCRA. Now, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia has agreed, ruling:

Congress spoke plainly, that Congress did not delegate authority to the FEC to narrow the disclosure requirement through agency rulemaking, and that a change in the reach of the statute brought about by a Supreme Court ruling did not render plain language, which is broad enough to cover the new circumstances, to be ambiguous. The agency cannot unilaterally decide to take on a quintessentially legislative function; if sound policy suggests that the statute needs tailoring in the wake of WRTL or Citizens United, it is up to Congress to do it.

It remains to be seen whether and when the gridlocked FEC will change its rules to comply with the ruling — and the unambiguous text of the law. And, while this may mean some additional disclosure for one type of third-party spending, countless loopholes remain. For instance, donors and companies could more-or-less launder donations through middle-man groups, shielding their own identities.

While increased campaign finance transparency is a small positive step, the problem remains that giant corporations and billionaire activists dominate the airwaves and overwhelm the political process. Even if we somehow achieved full disclosure — like Sen. Mitch McConnell (R-KY) used to back — for all political spending, any meaningful reforms to the campaign finance system will require the high court to reverse the 5-4 Citizens United ruling.