By Fred Wertheimer, President, Democracy 21

Representative Chris Van Hollen (D-MD) won an important campaign finance disclosure victory in federal district court on Friday, March 30, 2012 in the case of Van Hollen v. Federal Election Commission.  

Judge Amy Berman Jackson in her opinion struck down as contrary to law an FEC regulation that gutted the existing contribution disclosure requirement for outside groups making “electioneering communications.”

“Electioneering communications” are defined in federal law as broadcast ads that mention a candidate 60 days before the general election and 30 days before a primary.

Representative Van Hollen was represented in the case by the Democracy 21 legal team led by Roger Witten and lawyers from his law firm of WilmerHale, and including lawyers from Democracy 21 and the Campaign Legal Center.

This victory for disclosure notwithstanding, however, it remains essential to enact the DISCLOSE Act pending in the House and Senate in order to have a comprehensive solution to the current problem of huge amounts of secret contributions being laundered into federal elections.

The existing contribution disclosure requirements for “electioneering communications” cover only a portion of the secret contributions being injected into federal elections.

According to Judge Jackson’s opinion in the case, “There is no question that the BCRA provides that every ‘person’ who funds ‘electioneering communications’ must disclose ‘all contributors.’”

Judge Jackson noted that “there are no terms limiting that requirement to call only for the names of those who transmitted funds accompanied by an express statement that the contribution was intended for the purpose of funding electioneering communications.”

Judge Jackson further said that “there is no question that the regulation promulgated by the FEC directly contravenes the Congressional goal of increasing transparency and disclosure in electioneering communications. . . .[T]he general legislative purpose here is clearly expressed and it favors plaintiff’s interpretation of the statute: that Congress intended to shine light on whoever was behind the communications bombarding voters immediately prior to elections.”

The decision by Judge Jackson makes clear that the contributions used to make “electioneering communications” that are being kept secret from the American people are, in fact, required to be disclosed to the public. Congress meant for citizens to have this important information and the only reason they have not received it is because the FEC has thwarted contribution disclosure through improper regulations.

This is the third case in which the Democracy 21 legal team has successfully represented Members of Congress in lawsuits that struck down FEC regulations as contrary to law and as undermining the statute the agency is supposed to administer and enforce. The first two cases were Shays v. Federal Election Commission I and Shays v. Federal Election Commission III.

At some point, President Obama and Congress must act to protect the interests of the American people by fixing this rogue agency.

In 2010, 501(c) groups making “electioneering communications” in congressional races disclosed the sources of less than 10 percent of their $80 million in “electioneering communication” spending.  The ten groups that reported spending the most on “electioneering communications” disclosed the sources of a mere five percent of the money spent. 

American Action Network, for example, a 501(c)(4) group headed by former Republican Senator Norm Coleman of Minnesota made $20 million in electioneering communications in the 2010 congressional races and disclosed none of the donors whose funds were used to pay for these expenditures. If Judge Jackson’s ruling had been in effect, apparently all of the donors of $1,000 or more would have been disclosed to the American people.

The FEC should immediately conduct a rulemaking and expeditiously issue a new regulation to comply with the court’s decision. Absent such a move, an appeal of this decision by the FEC or by one of the intervening defendants in the case will, in practical terms, delay the decision being put into effect until after the 2012 election.

The Van Hollen lawsuit is part of a broader multi-prong effort supported by Democracy 21 and other reform groups to address the problem of massive amounts of secret contributions being injected into federal elections, for the first time since the Watergate era. This problem has resulted from a combination of the disastrous Citizens United decision and fundamentally flawed FEC disclosure regulations.

Representative Van Hollen is the lead House sponsor of the DISCLOSE 2012 Act, H.R.4010,  that would establish comprehensive contribution disclosure requirements for groups making campaign-related expenditures in federal elections. Senator Sheldon Whitehouse (D-RI) is the lead sponsor in the Senate of similar comprehensive disclosure legislation, S. 2219, the DISCLOSE Act of 2012. Democracy 21 and other reform groups support these bills.

Representative Van Hollen is also considering bringing a second lawsuit to challenge a second FEC regulation that improperly restricts the contribution disclosure requirements that apply to “independent expenditures” made in federal elections.

“Independent expenditures” are defined in the law as expenditures for communications that contain express advocacy or the functional equivalent of express advocacy.

Unlike “electioneering communications,” independent expenditures can take place at any time but they require an express message in support of or opposition to a candidate, instead of just requiring that the candidate be mentioned.

Under existing law, a group making an “independent expenditure” is required to disclose contributions made “for the purpose of furthering an expenditure.” This clearly means any and all expenditures.

The FEC however adopted a regulation that is again in direct conflict with the statute and is contrary to law. The regulation provides that disclosure is only required for contributions “made for the purpose of furthering the reported independent expenditure.”

This makes no sense and is fundamentally flawed in the same way as the disclosure regulation just struck down by Judge Jackson. The regulation means that donors can evade the disclosure provision by not requesting their contributions to be spent for a specific ad.

A second lawsuit would challenge this FEC regulation as contrary to the disclosure law it is supposed to implement.

Nevertheless, it is still essential to enact the DISCLOSE Act in order to end the practice of secret contributions being spent to influence federal elections.

The disclosure time frames of 60 days before a general election and 30 days before a primary in the existing “electioneering communications” provisions are too narrow and do not appropriately reflect the reality of the campaign season that exists today.

The post-Citizens United experience shows that outside spending groups are running broadcast ads to influence federal elections throughout the course of the entire election year and even earlier. As a result, the DISCLOSE legislation covers the calendar year of an election as the appropriate disclosure period for “electioneering communications.”

The district court decision last week in the Van Hollen case was an important victory for the right of citizens to know the donors whose funds are being used to pay for campaign-related expenditures to influence their votes. A potential second successful lawsuit will provide further important progress in the battle to end secret money being spent in federal elections.

In the end, however, the DISCLOSE legislation is essential to ensure that timely contribution and expenditures disclosures are made available to citizens for all “independent expenditures” and for “election communications” made during the course of the actual campaign season.