President Obama, Cong. Van Hollen Challenge Secrecy of Political Contributions

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April 23, 2011; Source: Los Angeles Times | This political/nonprofit controversy was destined to happen. In the wake of revelations that the U.S. Chamber of Commerce and other business-friendly interests went wild with undisclosed political expenditures in 2010 against the Dems and the failure of both parties to pass the DISCLOSE Act in Congress, the unfettered secrecy of political donations to and through nonprofits was bound to be challenged.

President Obama is contemplating an executive order to require bidders for federal contracts to disclose not only their corporate/business expenditures to political parties and candidates, but also "any contributions made to third party entities with the intention or reasonable expectation that parties would use those contributions to make independent expenditures or electioneering communications" (PDF). Disclosure would be required not just of the bidding entity, but its officers and directors and also the entity's subsidiaries and affiliates.

Rep. Chris Van Hollen's (D-MD) lawsuit against the Federal Elections Commission charges that the FEC "overstepped" its authority by allowing corporations (and presumably unions) to make secret donations to electioneering-engaged tax exempt entities such as Karl Rove's Crossroads GPS, the Koch-funded Americans for Prosperity, and the U.S. Chamber of Commerce which spent $65 million to influence the 2010 elections without having to disclose the identities of their donors.

Conservatives such as former FEC member Hans von Spakovsky are howling in opposition about Obama's end-run of the failure of the DISCLOSE Act and the alleged violation of First Amendment free speech rights. Don't think it's just conservatives, however. There are a number of southpaws who quietly supported the Citizens United decision and oppose ending the "veil of anonymity" that Van Hollen decries. Campaign finance reform crusader Fred Wertheimer contends that "secret money in American politics is a formula for scandal and corruption". History makes the counterarguments difficult to defend. If corporate donors are going to be embarrassed by their contributions to 501(c)(4)s, maybe the problem isn't disclosure, but the donors' inability to stand behind their own political positions allegiances. As a Los Angeles Times investigation reveals, "only a few of the country's 75 leading energy, healthcare and financial services corporations fully disclose political spending," even to their own shareholders.

Is money the equivalent of speech? Does getting rid of secrecy in political spending violate free speech? Should nonprofits be prepared to sacrifice something in return for cleaning up the nation's fetid campaign finance system? Let us know what you think! – Rick Cohen


  • David Cearley

    Dems might try to remember that the first instances of “secret” donations were early donations to the NAACP and other organizations helping minorities in the South to vote freely in elections. The Citizen’s United case revolved around a company’s right to produce an unflattering film about Hillary Clinton during the 2008 campaign. Mr Obama apparently now wants to expose corporate donations to conservative causes to embarrass or pressure companies to keep their mouth shut about government policies that hurt them, and their employees, while donations to unions will be conveniently ignored. You would do well to recognize that the primary purpose of disclosure laws is to shame individuals or companies from supporting unpopular causes like the individuals in California who found themselves unemployed after gay rights activists publicized vulnerable donors that disagreed with them.
    I have no idea what the next politically incorrect position will be, but whatever party is in power shouldn’t be able to shame them into muffling their message, chilling everyone’s free speech rights.

  • Ron Kensey is a 501(c4)