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Undisclosed Interests

Legislators fight corruption by silencing their critics.

Jacob Sullum
June 2, 2010

In a 1996 law review article, Supreme Court nominee Elena Kagan warned that campaign finance laws "easily can serve as incumbent-protection devices, insulating current officeholders from challenge and criticism." The DISCLOSE Act, a speech-squelching bill supported by the man who nominated Kagan, is a good example.

President Obama and congressional Democrats say the DISCLOSE Act, which is expected to come up for a vote soon, is aimed at ensuring transparency and preventing corruption in the wake of Citizens United v. FEC, the January decision in which the Supreme Court lifted restrictions on political speech by corporations and unions. But the bill's onerous, lopsided requirements suggest its supporters are more interested in silencing their critics.

Consider the ban on independent expenditures by government contractors, under which thousands of businesses would be forbidden to run ads mentioning a candidate for federal office from 90 days before the primary through the general election. Although this provision is supposed to prevent the exchange of helpful ads for taxpayer money, it applies even to businesses that win contracts through competitive bidding. Furthermore, the ban does not apply to Democrat-friendly, taxpayer-dependent interests such as public employee unions and recipients of government grants.

Likewise, the DISCLOSE Act prohibits corporations from engaging in pre-election political speech if 20 percent or more of their equity is owned by foreign nationals. That provision would bar U.S.-based companies with foreign investors, such as Verizon and ConocoPhillips, from publicly addressing issues that affect their American shareholders and employees. Although the official aim is preventing foreign interference with U.S. elections, the ban would not apply to international unions such as the SEIU and the UFCW or to international activist groups such as Greenpeace and Human Rights First.

Even when corporations are allowed to speak, any communication that mentions a candidate during the covered period, including online material, could expose them to investigation by the Federal Election Commission (FEC) for unauthorized "coordination" with a political campaign. Despite all the rhetoric about big corporations drowning out the voices of ordinary citizens, the prospect of such an inquiry is most likely to intimidate small businesses and grassroots organizations with limited resources and legal expertise.

The "stand by your ad" statements required by the DISCLOSE Act also impose a substantial burden on the exercise of First Amendment rights. Under current law, a political ad has to include a statement indicating the sponsoring organization—say, the U.S. Chamber of Commerce or the American Civil Liberties Union. Under the DISCLOSE Act, both the organization's head and its "significant funder" would have to appear in the ad and take responsibility for it. According to the Center for Competitive Politics, these statements would consume one-third to one-half of the time in a 30-second TV spot.

The DISCLOSE Act's reporting requirements are likewise redundant, burdensome, and intimidating. Among other things, an organization's donors are presumed to support its political ads unless they specify otherwise, so their names must be reported to the government, raising the possibility of bullying or retaliation by politicians.

The anxiety and uncertainty created by the new rules would be compounded by the fact that they would take effect 30 days after the law is enacted, before the FEC would have time to issue regulations clarifying them. Opposing an amendment that would have postponed the effective date until January 1, Rep. Michael Capuano (D-Mass.) said he wants people to worry about a fine or prison sentence when they dare to speak ill of him.

"I hope it chills out all—not one side, all sides!" said Capuano. "I have no problem whatsoever keeping everybody out. If I could keep all outside entities out, I would."

Similarly, Sen. Charles Schumer (D-N.Y.), upon unveiling the bill, said "the deterrent effect should not be underestimated." For those who view nonpoliticians as meddlesome "outside entities" and criticism of incumbents as a crime to be deterred, the chilling effect of campaign finance laws is a feature, not a bug.

Jacob Sullum is a senior editor at Reason and a nationally syndicated columnist. This column first appeared at Reason.com.

© Copyright 2010 by Creators Syndicate Inc.


Jacob Sullum is Senior Editor


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