Debate Over Campaign Finance Disclosure Continues

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While the landmark decision of Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), opened the door to unlimited corporate spending independent of candidates, it also opened the door to unlimited debate over the appropriate balance between freedom of speech and the disclosure of who is funding groups that are making independent expenditures or participating in issue advocacy.

Don’t expect the issue to be settled any time soon. Following this month’s election, which some estimate included over $6 billion of campaign spending, both Senator Amy Klobuchar and Representative-elect Rick Nolan called for campaign finance reform and greater disclosure. In her election-night speech, Senator Klobuchar reassured supporters that she would tackle the issue during her next six years in office.

The issue is likely to be addressed by both the legislative and judicial branches and on both the state and federal level. Within the past two weeks, there has been discussion of possible federal legislation including the reintroduction of the DISCLOSE Act or other legislation such as the American Anti-Corruption Act, a proposal drafted by Former Federal Election Commission chairman Trevor Potter. Mr. Potter was also instrumental in putting together the McCain-Feingold law. On the state level, some speculate that with a Democratic controlled Senate and House, we may see renewed efforts at legislative campaign finance reform in Minnesota.

In the courts, constitutional challenges continue. Last month, Minnesota’s Federal District Court largely upheld the registration and reporting requirements for corporations and other political groups that make independent expenditures in Minnesota. However, the Court invalidated a provision under which reporting was required in periods where no campaign spending occurred. The decision followed a lengthy court battle that included a remand from a split, full Eighth Circuit Court of Appeals which had questioned the constitutionality of Minnesota’s law.

Meanwhile, courts in California and Idaho issued rulings requiring the disclosure of donors to 501(c)(4) organizations that spent money on election related issues in those states. In addition, the United States Supreme Court is considering review of two potentially significant campaign finance cases - Real Truth About Abortion v. FEC (U.S., No. 12-311, cert. petition filed 9/10/12) which challenges the federal definition of express advocacy as well as Danielczyk v. U.S. (U.S. No. 12-579, cert petition filed 11/8/12) which involves a challenge to the longstanding ban on corporate contributions to federal candidates. The Danielczyk case asks the Court to re-examine the distinction between campaign contributions and independent expenditures. If the Supreme Court decides to grant review in either the RTAA or Danielczyk cases or in both, we could see another major campaign finance ruling sometime in 2013.

 

Published In: Business Organization Updates, Constitutional Law Updates, Elections & Politics Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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