Republicans are mounting a last ditch-effort to stop Democrats from pushing through a controversial bill intended to roll back a recent Supreme Court decision by restricting companies' and associations' political advertising.
Euphemistically called the Democracy is Strengthened by Casting Light on Spending in Election (Disclose) Act, the bill is expected to come to the House floor as early as Wednesday.
On Monday, Democratic leaders cleared the bill's way by cutting a deal with the NRA, exempting the massive gun-rights organization from the act's requirements. Democrats in moderate districts were wary of crossing the NRA by trying to limit its campaign ads.
Democratic leaders now are confident they can push the bill, H.R. 5175, through the House without difficulty. Americans for Tax Reform founder Grover Norquist, who opposes the act, says House Republicans probably can't stop it.
"It will pass the House," he tells Newsmax, "but it probably won't pass the Senate."
Americans for Tax Reform and more than 50 other groups, including The American Conservative Union, CatholicVote.org, the Center for Competitive Politics, and Citizens Against Government Waste, have sent a letter to Congress calling the bill "an unequivocal ban on free speech, masquerading as an exercise in accountability."
The controversy stems from the Supreme Court's recent Citizens United v. FEC ruling. In that case, the high court ruled that provisions of the McCain-Feingold campaign finance law, which severely restricted the rights of corporations and nonprofit groups to run political advertising, were unconstitutional.
Democrats soon vowed to enact legislation rolling back that decision. During President Obama's State of the Union address, he publicly scolded the Supreme Court for its verdict in Citizens United v. FEC, alleging that it would "open the floodgates for special interests, including foreign corporations, to spend without limit in our elections."
What Obama did not mention is that a separate federal law, unrelated to McCain-Feingold, already prohibits the expenditure of funds by foreign nationals and foreign companies to influence U.S. elections.
The U.S. Chamber of Commerce has voiced strong opposition to H.R. 5175, which requires disclosure of the major corporate donors to a nonprofit that airs a political commercial.
The chamber recently blasted the bill as "unconstitutional," calling it a "desperate attempt" of Democrats to grab a political advantage in the upcoming midterm elections.
Among the bill's controversial provisions:
- It would expand the window for "electioneering communications," which was 30 to 60 days under McCain-Feingold, to 90 days before a primary or caucus. During that period, corporations and nonprofits would face stringent procedures for any corporate advertising. The electioneering window, once opened, would continue through to the general election. So because presidential primaries fall well before the election, the restrictions could conceivably be in place for over a year.
- The bill requires a mountain of paperwork, because companies must submit a list to the FEC of all donors who contributed more than $600. "In the 1950s, the NAACP went to court to say it should not have to disclose its membership list," Heritage Foundation legal scholar Hans Von Spakovsky says. He contends the provision to disclose members' names poses constitutional problems "because it interferes with their right to associate."
- It prohibits any company that received government contracts, or that received TARP bailouts, from spending any money on election advertising.
- In a precedent-setting exemption, the Disclose Act for the first time would restrict the activities of nonprofits and companies, but not unions in some cases. Opponents point out that unions recently spent over $10 million in an unsuccessful bid to defeat Arkansas Sen. Blanche Lincoln in the Democratic primary. "This is the empower-labor-unions-over-everybody-else act," says Norquist. "It's making it illegal for Americans to participate in politics."
- It bans any advertising from foreign companies, including domestic companies that have 20 percent or more foreign control.
- The names of all donors who give $1,000 or more to an organization must be disclosed to the FEC, if the organization spends more than $10,000 on political advertising. Labor unions are included in this provision.
- It requires CEOs to appear on camera stating they "approve this message." Those familiar with how political fundraising work say this alone would scare away political speech by the vast majority of companies and associations. Curt Levey of the Committee for Justice, one of the groups that signed the anti-Disclose Act letter, tells Newsmax: "I see this as a threat especially to conservative nonprofits, but really to nonprofits in general, because that's ultimately where the corporate spending that is being attacked here is coming from. Donors very often ask about anonymity. That's important to them. I could see the groups losing a lot of donations. It's meant to have a chilling effect, and it will have a chilling effect. I think it's going to have a horrible effect on nonprofits groups."
- The top donor to the organization, who might not have donated any money for that particular ad, would be required to appear in the commercial to provide the public with information on those funding the commercial. Also, a TV ad would have to list the top five funders to the organization, and radio ads would have to disclose the top two funders. Disclose Act opponents point out the additional time required for the burdensome disclosures would make the ads prohibitively expensive.
Another opponent of the bill, Mark Fitzgibbons, president of corporate and legal affairs for Richard Viguerie's conservative American Target Advertising, says the act is rife with many intentional loopholes and exceptions.
Members of Congress, for example, who receive donations from corporate PACs, are still able to donate that money directly to their parties' election coffers.
Politico reported Monday that nine Democratic incumbents have funneled $50 million in this election cycle to the Democratic Congressional Campaign Committee.
"That's far more secretive and corruptive … and helps explain why Democrats are the kings of crony capitalism, getting more money from BP, Goldman Sachs, Fannie Mae and so on," Fitzgibbons tells Newsmax.
Democrats are promoting the bill as a way to disclose to the American people those who are really behind the political advertising the public is exposed to. But the bill's proponents have openly touted it as a way to tighten the spigot on corporate speech related to campaigns — the precise impulse that the Supreme Court already has ruled was unconstitutional.
"The deterrent effect should not be underestimated," Schumer said when the New York Democrat rolled out the bill.
Norquist said Monday he is "very disappointed" the NRA cut a separate deal with House leaders, rather than stand with conservatives on principle.
The legislation also apparently would not affect Citizens United, the organization whose court case started the whole controversy. That's because the FEC ruled Monday that Citizens United would qualify for the "press exemption" written into the 1971 Federal Election Campaign Act to avoid improperly restricting media activities during an election.
Norquist believes Republicans opposed to the bill will have to make their stand in the Senate.
"We hear they have 41 against in the Senate," Norquist tells Newsmax. "We need all hands on deck to make sure Republicans hold in the Senate. The bill is a disaster, but hopefully the Republicans in the Senate will stop it."
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