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DISCLOSE Act: Shine the Light on Special Interests Behind American Elections

After years of the Abramoff scandal, special interests lobbyists writing legislation and an explosion of earmarks, the New Direction Congress is working to restore honest leadership and open government.

On June 24th, the House passed the DISCLOSE Act (H.R. 5175) to close some of the biggest election loopholes created by a recent court decision and help ensure that the voices of the American people are not drowned out by a corporate takeover of our elections.  In the Citizens United case, the Supreme Court opened the floodgates to unrestricted special interest campaign donations in American elections--even from entities controlled by foreign governments. 

This legislation--the most far-reaching campaign finance reform law since McCain-Feingold does more to strengthen disclosure and transparency than any measure in recent history--works to:

  • Prevent U.S. corporations controlled by foreign - or even hostile - governments from dumping in secret money to influence U.S. elections;
  • Stop manipulation of elections by fly-by-night “hit” groups funded by corporations such as BP, special interests, foreign companies, and multimillionaires;
  • Expose Wall Street, Big Oil, insurance companies, and other special interest groups behind last minute attack ads and other election ads--requiring their CEOs to stand by their ads;
  • Prevent large government contractors and TARP recipients from making political expenditures;
  • Give shareholders, organization members, and the public the right to know about corporate and interest group campaign expenditures;
  • Ensure that established, grassroots organizations, with membership of 500,000 or more, stand by their political ads and prohibits them from using corporate dollars for campaign purposes - while respecting privacy of their contributors. (Provision applies only to organizations that take part in federal campaign-related activities.)

Watch video highlights of the floor debate:

Read the bill»

Read the Manager's Amendment»

Summary:

Prevent Large Government Contractors from Spending Money on Elections: Prevents government contractors with over $10 million in contract money from making independent expenditures and electioneering communications. Before the Citizens United case, corporations could not make political expenditures in federal elections. 

Prevent TARP recipients from Spending Money on Elections:  Prohibits bailout beneficiaries from making independent expenditures or electioneering communications in federal elections until the government money is repaid.

Limit Foreign Influence in American Elections:  Extends existing prohibitions on campaign contributions and expenditures by foreign nationals to domestic corporations in which foreign nationals own more than 20% of voting shares, make up a majority of the board of directors, and/or have the power to dictate decision-making of the domestic corporation.

Strengthen Disclosure of Election Ads:  Expands electioneering communications that must be disclosed under the bill to broadcast ads referring to a candidate in the 120 days before the general election, expanded from 60 days before the general under current law.

Stand by their Ads:  Requires corporate CEOs to appear on camera to say that he or she “approves this message,” just like current law requires candidates do in political ads, funded by their company.

  • Requires Top Donor to Appear in Political Ads and Top Five Donors to be Listed in Ads. The top funder of a campaign-related ad (who provided more than $10,000) is required to stand by their ad.  Also requires a TV ad to list the top five funders and the amounts they gave to be used for campaign-related ads, as long as they have provided more than $10,000 over that last 12 months.
  • Radio ads must state the top 2 funders, and robo calls must disclose the sponsor and the significant funder on the call and mass mailings must disclose the sponsor, significant funder and top 5 funders.

Strengthen Donor Disclosure of Political Expenditures by Corporations, Unions, and 504 (c)(4)s, (6)s, and 527s:  Requires full and timely disclosure of campaign-related expenditures made by covered organizations, including corporations and labor organizations. The bill imposes disclosure requirements that prevent covered organizations from masking their campaign-related activities through the use of conduits and intermediaries.

  • Corporations, labor unions, trade associations, 501(c)(4) organizations, and 527 organizations must report all donors who have given $1,000 or more if the organization has made an expenditure in excess of $10,000 from its general treasury funds for “electioneering communications,” and $600 or more if the organization has made an expenditure in excess of $10,000 from its general treasury funds for “independent expenditures” to the FEC. 
  • The name of the donor, date and amount of the donation must be disclosed. 
  • Exempts from these donor disclosure requirements 501(c)(4)s that have 500,000 million or more dues-paying members in the prior year, with members in each of the 50 states, that received no more than 15 percent of their funding from corporations or labor organizations, that have been in existence for over 10 years, and that do not use any corporate or union money to pay for their campaign-related expenditures.  These organizations, however, would still have to stand by their ads.
  • An organization can establish a separate “campaign-related activities” account to make campaign-related expenditures (independent expenditures or electioneering communications). 
  • Restricts organizations from using a donation for campaign-related activities if the donor specifies that it may not be used for such activities, in which case the identity of the donor is not to be disclosed. 

Disclosure of Political Expenditures to Shareholders and Members:  Requires corporations, unions, trade associations, 501(c)(4) organizations and 527s to disclosure campaign related expenditures on the organization's website as well as included in any periodic or annual financial reports. 

Lobbyist Disclosure of Political Expenditures:  Requires lobbyists --registrants under the Lobbying Disclosure Act -- to disclose the amount of any independent expenditure or electioneering communication of over $1,000 and the name of the candidate referred to in the ad.

Extends Ban on Coordinating with Candidates and Parties:  Prevents corporations, labor unions, nonprofits and individuals from coordinating campaign-related expenditures with candidates and parties in House and Senate races in the period from 90 days before the primary through the general election, and where the ad is run in the candidate's jurisdiction.  (Current FEC rules apply just to the 90-day pre-primary and pre-general election periods.)  For presidential elections, the bill put into law the existing FEC regulation that bans coordination on ads from 120 days before the first presidential primary or caucus through the date of the general election.