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More than two dozen legislators have already signed on to the donor disclosure measure.
In wake of scandal, bipartisan push in Ohio for money-in-politics transparency
Aug 06 2020
Days after the speaker of the Ohio House was charged with racketeering, colleagues from both parties are lining up to bolster the state's donor disclosure laws.
By Thursday, 22 majority Republicans and five Democrats in the General Assembly had signed on to a measure requiring political advocacy groups to begin naming the original sources of their funds and file disclosure reports with the state.
The bill's prospects are not certain. Still, it's an unusual level of bipartisan collaboration — at either the state or federal level, and especially in an election year — to bolster regulation of campaign finances in hope of controlling the secretive influence of special interests over campaigns and then governing. Good governance groups see mandating this sort of sunshine as essential to the running of a clean democracy.
<p>Had such transparency been in place, the allegedly corrupt way Republican Speaker Larry Householder benefitted from tens of millions in <a href="http://thefulcrum.us/dark-money" target="_self">dark money</a> would have been revealed much sooner — if not warded off from the outset.</p>
<p>Householder was removed from the speakership two weeks ago after he and four of his allies were charged in federal court with a bribery scheme that prosecutors describe as probably the biggest instance of public corruption in the state's history.</p>
<p><p style="text-align: center;" id="sufn"><a style="font-weight: bold;margin:40px auto;font-size:2rem" href="https://thefulcrum.us/st/newsletters">Sign up for The Fulcrum newsletter </a></p></p><p>The group was accused of accepting $60 million in payments from FirstEnergy Solutions over the past three years as donations to a dark money group called Generation Now, created to help Householder win and hold the gavel in Columbus. In return, prosecutors allege, the speaker pushed to enact a $1.3 billion bailout for two of the company's nuclear power plants.</p>
<p>"Now more than ever, Ohioans have seen first-hand how dark money can influence the decisions that impact our lives," said Republican Secretary of State Frank LaRose, Ohio's top elections official. "I'm hopeful that this legislation will be a positive first-step towards finding the solutions necessary to get voters the transparency they deserve."</p>
<p>The bill was introduced in the state House last week by Democrat Jessica Miranda and Republican Gayle Manning. The companion Senate bill is sponsored by Manning's son, Republican Nathan Manning.</p>
<p>No votes have been scheduled, and both chambers are dark for all but one day until the middle of next month. If enacted, the measure would take effect next year and:</p><ul class="ee-ul"><li>Require groups spending to support or oppose ballot referendums or initiatives to register with the state.</li><li>Align state law with the Supreme Court's 2010 <a href="http://thefulcrum.us/citizens-united" target="_self">Citizens United</a> decision by allowing corporations to make independent expenditures and requiring spending and contribution reports.</li><li>Mandate nonprofits that spend politically to file campaign finance reports.</li><li>Give the secretary of state subpoena power to look at bank records and other related documents.</li><li>Require federal political action committees spending in Ohio to file reports with the state.</li></ul>
<p>The legislation is modeled after a bill, proposed by Republican Lt. Gov. Jon Husted when he was a state senator, that died a decade ago. "Ohio would be in a much better place today" had it passed, Husted said, adding he hopes "enough lessons have been learned" in the intervening years to change its prospects.</p>
<p>"This is the first step to rein in the wild west of dark money spending we've seen in Ohio over the last decade or longer," Miranda said. "Corruption has tainted our statehouse for far too long. We're seeing the sowing of all that right now more than ever."</p>
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Campaign finance loophole allows for foreign election interference, report finds
Jul 29 2020
Businesses that finance super PACs could be exploited by foreigners who want to secretly and illegally spend millions to influence American elections, a campaign finance advocacy group warned Wednesday.
So long as they disclose their donors, super PACs are allowed to raise and spend unlimited amounts in support or opposition of candidates for president and Congress. But these donations too often come from opaque shell companies, Issue One said in a new study, obscuring the true source of the money and opening campaigns to even more interference by overseas adversaries.
A bipartisan nonprofit that advocates for a broad democracy reform agenda, Issue One says the remedy is more regulation of these shell companies. (The group operates but has no journalistic say over The Fulcrum.)
<p>The 20-page <a href="https://www.issueone.org/wp-content/uploads/2020/07/Mystery-Money-Report-Tipsheet.pdf" target="_blank">"Mystery Money" report</a> details a dozen cases of businesses seemingly set up as shell companies to steer cash in secret toward both parties. While super PACs list these businesses among their donors, the individual or group behind the firm can stay well-hidden. </p><p>"The Justice Department says foreigners have already used shell companies to illegally funnel money into U.S. elections at least twice in recent years," said Issue One CEO Nick Penniman. "It's only a matter of time before this glaring loophole in our campaign finance system is more systematically abused by malicious foreign actors."</p><p><p style="text-align: center;" id="sufn"><a style="font-weight: bold;margin:40px auto;font-size:2rem" href="https://thefulcrum.us/st/newsletters">Sign up for The Fulcrum newsletter </a></p></p><p>Both parties benefit from the loophole. In one case study, a New Jersey plumbing firm gave $250,000 last November to the main super PAC supporting Republican Senate candidates. The business "appears to be associated with" billionaire Steven Roth, who has been an economic advisor to President Trump, the authors said.</p><p>Another case study described two companies "tied to a pair of businessmen who have been accused of bribing a politician in New Orleans" and contributing $300,000 in the past five years to New Horizons USA, a super PAC that has mostly aided Democrats in Louisiana.</p><p>To close this loophole, the nonprofit watchdog says Congress should make it a felony for Americans to create business entities that conceal illegal political activities by foreign nationals, while the Federal Election Commission should also strengthen regulation and transparency around corporate donations to super PACs.</p>
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A watchdog group alleges an effort to hide payments to presidential daughter-in-law Lara Trump and former campaign manager Brad Parscale, among others.
Sweeping complaint about Trump campaign spending heads to FEC black hole
Jul 29 2020
The Trump campaign is vowing to fight a complaint from a watchdog group alleging an unusually bold and broad violation of campaign finance law. But it might not have to fight too hard, because the matter is now before an essentially shuttered Federal Election Commission.
The allegation formally lodged Tuesday by the Campaign Legal Center, which advocates for tighter money-in-politics rules, is that President Trump's reelection operation paid almost $170 million to companies affiliated with one-time campaign manager Brad Parscale and other campaign operatives — but did not disclose the intended recipients of the money, as the law requires.
While efforts to obfuscate campaign spending details are not uncommon, as candidates from both parties clamor for every tactical advantage, what the CLC described in its complaint as "laundering the funds" by Trump's team seems unprecedented in size and scope.
<p>The CLC is still pursuing, for example, its similar complaint filed with the FEC four years ago, alleging the Hillary Clinton campaign paid a law firm knowing the real recipient was going to be the opposition research firm Fusion GPS, which was investigating Trump's ties to Russia. The amount at issue, however, was less than $1 million.</p><p><p style="text-align: center;" id="sufn"><a style="font-weight: bold;margin:40px auto;font-size:2rem" href="https://thefulcrum.us/st/newsletters">Sign up for The Fulcrum newsletter </a></p></p><p>That complaint has moved at a snail's pace mainly because the six-member FEC, the sole regulator of money in national politics, was in total partisan deadlock for almost a decade ending last summer — at which point the agency was essentially shut down because its membership shrank to three, one shy of a quorum. It reopened for a month this summer after the Senate confirmed a Trump nominee, Trey Trainor, then fell into limbo again as soon as Republican commissioner Caroline <a href="https://thefulcrum.us/campaign-finance/caroline-hunter-resigns-fec" target="_self">Hunter resigned last month</a>. </p><p>Even under normal circumstances, it would take the FEC many months to resolve such allegations — and that's even if there were four votes to do something. </p><p>With Senate Democrats delaying a vote on her proposed replacement, deregulatory campaign finance advocate Allen Dickerson, the only thing likely to happen before the election is that agency bureaucrats formally accept the Trump campaign's response in the next month.</p><p>The CLC could bypass the agency altogether and turn the complaint into a federal lawsuit if there's no movement at the FEC for four months — but that would be several weeks after the election. By that point the complaint might be pointless as a practical matter, if the president is defeated, but campaign finance advocates may want to press it nonetheless as a matter of precedent-setting principle.</p><p>Federal law requires candidates for president and Congress to disclose all payments above $200, including to subcontractors closely tied to the campaign. The 82-page complaint says the Trump campaign and the Trump Make America Great Again Committee unlawfully evaded these rules by funneling money through Parscale Strategy but mainly through another firm over which he has significant influence, American Made Media Consultants. </p><p>The CLC complaint says some of the money was to keep secret some payments to Parscale, who was replaced as campaign manager this month by Bill Stepian, while other money was quickly passed along for vendors and advisors including the maker of the campaign app, Phunware, as well as both Lara Trump, the wife of Eric Trump, and Kimberly Guilfoyle, the girlfriend of Donald Trump Jr.</p><p>The Trump "scheme flagrantly violates the transparency requirements mandated by federal law, and it leaves the public in the dark about where the campaign funds are actually going," the watchdog group's president, former FEC Chairman Trevor Potter, said Wednesday. "And this secrecy could potentially disguise other campaign finance violations, but we don't know, because the campaign isn't disclosing these routed payments.".</p><p>Spokesman Tim Murtagh said the campaign had done nothing wrong and so would contest the allegations vigorously. "The campaign complies with all campaign finance laws and FEC regulations," he said.</p><p>The last time a campaign was sanctioned for concealing payments appears to be eight years ago, when Rep. Michele Bachmann of Minnesota was fined for paying an Iowa Republican official for his presidential endorsement but masked the money.</p>
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New longshot bid tries to persuade Supreme Court to rein in super PACs
Jul 23 2020
Sixteen states, a half-dozen progressive senators and a collection of campaign finance reform experts have launched an uphill campaign to persuade the Supreme Court to close down the nation's super PACs.
They filed briefs Wednesday asking the court to consider a fresh challenge to a central aspect of campaign finance law: A federal appeals court ruling from a decade ago that ended contribution and spending limits, but not disclosure requirements, for independent political groups that want to elect or defeat candidates — thus creating super PACs.
There is no guarantee the justices will decide to take the case after it reconvenes this fall, however. And even if they do, the court's reliably conservative majority and string of precedents promoting the deregulation of campaign finance suggest that victory for reformers is a longshot.
<p>While the court in its most famous money-in-politics case, <a href="http://thefulcrum.us/citizens-united" target="_self">Citizens United v FEC</a>, said a decade ago the First Amendment means corporations, nonprofit organizations and labor unions may spend what every they like on campaigns, it has not addressed the question posed by the new case: Is it constitutional for Congress to limit contributions to political committees that make only independent expenditures? That's what super PACs do.</p><p><p style="text-align: center;" id="sufn"><a style="font-weight: bold;margin:40px auto;font-size:2rem" href="https://thefulcrum.us/st/newsletters">Sign up for The Fulcrum newsletter </a></p></p><p>A common misconception is that the Citizens United ruling gave rise to super PACs. But it was actually the D.C. Circuit Court of Appeals decision the same year in <a href="https://thefulcrum.us/speechnow" target="_self">SpeechNow.org v. FEC</a>. So campaign finance advocates maintain the high court would not have to revisit and then spurn its Citizens United precedent in order to put a crimp into super PACs. They dished out more than $822 million to influence campaigns for Congress two years ago — an amount three quarters the size of the $1.1 billion candidates for the House and Senate spent in the aggregate.</p><p>"Super PACs weren't created by Congress, or the U.S. Supreme Court — they were created by a lower court decision, based on faulty assumptions, that has never been reviewed or revisited," said Ron Fein, legal director of <a href="https://thefulcrum.us/free-speech-for-people" target="_self">Free Speech For People</a>, a campaign finance reform nonprofit working on the new appeal.</p><p>The main plaintiff in the case Lieu v. FEC, is Ted Lieu, a Democratic congressman from California.</p><p>"I'm extremely skeptical that the court would take this case (because a majority would agree with the D.C. Circuit in SpeechNow was right that the limits on contributions to super PACs are unconstitutional)," professor Richard Hasen of the University of California at Irvine <a href="https://electionlawblog.org/?p=113360" target="_blank">wrote in his Election Law blog</a>. "And if the Court took the case, I believe it would only make campaign finance law even more deregulatory."</p><p>Although it may appear quixotic, the appeal has drawn a strong cast including four senators on the Judiciary Committee — Patrick Leahy of Vermont, Richard Blumenthal of Connecticut, Sheldon Whitehouse of Rhode Island and Mazie Hirono of Hawaii — and fellow Democrats Tom Udall of New Mexico and Chris Van Hollen of Maryland.</p><p>"A tsunami of special interest money is drowning out Americans' voices and corrupting our democracy," Whitehouse said. "At the center of the tidal wave are Super PACs through which corporations and billionaires run unlimited money to push their political agendas."</p><p>Of the 16 states that are part of the appeal, 10 have both governors and legislatures that are Democratic: Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, New Mexico, Rhode Island, Virginia, Washington. The rest have divided governments: Maryland, Massachusetts, Michigan, Minnesota, Pennsylvania and Vermont.</p><p>Other parties supporting the efforts include nine election law scholars, seven political scientists, three academic researchers and a former FEC commissioner.</p>
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