Corporations and unions would have to identify themselves on political ads they bankroll, and the CEO or top official would have to make "I approve this message" statements under legislation being introduced in Congress Thursday.
The measures are a direct response to a 5-4 ruling by the Supreme Court in January that upheld the First Amendment rights of such groups to spend money on campaign ads — a decision greatly enhances their ability to influence federal elections.
"At a time when the public's fears about the influence of special interests were already high, this decision stacks the deck against the average American even more," Sen. Charles Schumer told a news conference on the steps of the Supreme Court building.
The New York Democrat was joined by other Democrats, including campaign finance legislation veteran Russ Feingold of Wisconsin, who said the ruling in the Citizens United case was "one of the worst decisions in the history of this distinguished body."
The bill had no Republican sponsors, but Schumer said Democrats were talking to GOP lawmakers and "a good number" were favorably disposed.
A House group led by Rep. Chris Van Hollen of Maryland, a member of the Democratic leadership, and two Republicans, will hold a similar news conference later in the day.
Opponents of the ruling say it overturned established law and that it dangerously tilted the power balance away from individual candidates and voters and in the direction of deep-pocketed corporations and unions. Supporters argue that in addition to abridging the freedom of speech, those seeking to limit campaign spending are serving the interests of better-funded incumbents.
President Barack Obama, in his State of the Union address last February, said the ruling "reversed a century of law to open the floodgates for special interests — including foreign corporations — to spend without limit in our elections."
Saying "sunlight is the best disinfectant," Obama urged Congress in a statement Thursday to act quickly "so the American people can follow the money and see clearly which special interests are funding political campaign activity and trying to buy representation in our government."
The proposed bill would also bar foreign-controlled corporations and government contractors from spending money on elections, and prohibit political spending by companies that received government bailout money.
The top financier of an ad would be required to record a stand-by-your-ad disclaimer message to prevent organizations from funneling money through shell groups to hide their identity. Corporations and unions must also disclose campaign-related spending on their websites and report that spending to shareholders and members.
Schumer said he expected the case to be a factor in considering Obama's pick to replace retiring John Paul Stevens on the Supreme Court. "The next nominee must be someone who will understand how the court's decisions affect people in the real world. Because, in the Citizens United case, the current court didn't."
The lawmakers say their goal is to have the legislation enacted by July 4, in time for it to be put into effect before the November election. They said the measure could significantly reduce the anticipated flood of special interest spending on ads.
"There will be no hiding," Schumer said. "Once sunlight occurs they shrivel up and don't do them."
"We expect a major battle," said Fred Wertheimer, president of the campaign finance watchdog group Democracy 21.
The U.S. Chamber of Commerce has said it will "fight any and all attempts to muzzle and or demonize independent voices from the election discussion," and the Republican leader of the Senate, Mitch McConnell of Kentucky, has long been a fierce opponent of putting limits on campaign spending.
But Wertheimer said the Supreme Court was clear that laws requiring greater disclosure are constitutional. "We think we have a powerful case," he said.
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