January 14, 2011; Source: PubliCola | As we’ve mentioned in these pages before, state legislatures may step in where the Congress seems unwilling in regards to compelling the disclosure of campaign contributions and expenditures by 501(c)(4) and other tax-exempt organizations. In Washington state, campaign finance scandals affecting both major political parties have prompted the introduction of legislation that seems to be aimed at campaign finance reform, but the bills don't get at the issue of political donors hiding their identities behind nonprofits.

The Democratic campaign finance controversy involves a wonderfully named Democratic political consulting firm, Moxie Media, which set up shell groups to support a weak Republican candidate in order to squeeze a stronger Republican out of runoff elections – the money and interests behind these groups wasn't exactly disclosed to the public.

On the Republican side, Americans for Prosperity Washington, apparently related to the Tea Party-affiliated Americans for Prosperity, financed big-time political mailings against Democratic candidates which experts estimate to have cost half a million dollars, but AFPW said in its official state disclosure statement that the mailings only cost $30,000. Contrary to state rules, AFPW reported its expenditures and its donors (for the $30,000) only after the mailings went out.

The proposed legislation (PDF) would compel disclosure for electioneering communications starting at a threshold expenditure level of $1,000 and limit the ability of politicians or special interests to set up camouflaged "Potemkin" organizations or to make committee-to-committee contributions. It isn't clear that these reforms would get at (c)(4)s versus PACs, much less whether Democrats or Republicans will be willing to rein in the political shenanigans.

But the implication is clear. Congress might not act on 2010's proposed DISCLOSE legislation, but it appears to be within the purview of state legislatures to remedy the secrecy dimensions of the Citizens United case when it comes to hiding political contributions.—Rick Cohen