Disclose Act

Floor Speech

Mr. SCHUMER. Mr. President, I rise today in support of S. 3295, the DISCLOSE Act. I am happy to be joined by several of my colleagues, all of whom were essential in putting this bill together: Senators Feingold, Wyden, Bayh, Franken, and Bennet. We come to the floor today with a clear and powerful statement: the DISCLOSE Act will provide much-needed transparency to our political process in light of Citizens United, and will allow the public to know who really is behind the political messages they see on TV or hear on the radio. The DISCLOSE Act will follow the Supreme Court's advice and make disclosure and disclaimers the cornerstone of our reform efforts and will apply equally to all corporations, unions, trade associations, social welfare organizations and section 527 groups. It is intended to encourage political participation by creating an educated electorate. Further, the DISCLOSE Act will not chill speech or political participation, it will enrich it.

On April 30, 2010, 37 colleagues and I introduced the DISCLOSE Act, Democracy Is Strengthened by Casting Light On Spending in Elections, S. 3295, to respond to the Supreme Court decision in Citizens United v. FEC. The purpose of this legislation is to provide the American public with information on who is speaking when political advertisements and expenditures are made and to prevent them from being misled by organizations attempting to disguise their identities through the use of shadow groups. I want to reiterate that this act is in no way meant to deter political speech or spending, only to provide information so that the public is empowered to make informed decisions. Additionally, the disclosure and disclaimer provisions in the act apply equally to corporations, unions, and groups organized under sections 501(c)(4), (c)(5), (c)(6), and 527 of the Tax Code. We play no favorites.

In writing the majority opinion for the Court in its January decision, Justice Kennedy was very clear in articulating the Court's support for disclosure. He said, ``[t]he First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.'' Kennedy also stated that ``disclaimers avoid confusion by making it clear that the ads are not funded by a candidate or political party.'' In fact, eight of the nine Justices agreed that disclosure and disclaimer provisions were necessary, and in the public's interest, to provide this information. The Court's decision opened the door to allow certain corporate spending in elections that was previously disallowed. In line with the Court's support for disclosure and disclaimer provisions, we have introduced the DISCLOSE Act and designed it to strengthen the Court's stated protections so that the public knows who is speaking and sponsoring these newly permitted messages.

This legislation would provide the following increased protections for the American people. It will ensure that they have full and timely disclosure of campaign-related expenditures by corporations, labor unions, social welfare organizations, trade associations and 527 groups. It requires these covered organizations to report expenditures to the Federal Election Commission within 24 hours if the expenditure is $1,000 or greater within 20 days of an election and $10,000 or greater before that date. It will then require the organization to post this information on its own Web site 24 hours after reporting and to send the information to its shareholders or members in any periodic or annual reports. This Internet publication requirement and more rapid reporting helps implement the Court's opinion that ``prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.''

It will also require enhanced reporting to the FEC by those covered organizations, requiring those that spend more than $10,000 per year on campaign-related expenditures to either disclose all of their donors that have given over $1,000 or to create a campaign-related activity account for exclusive use in making these expenditures. If this account is created, the organization will only need to disclose those donors that have donated over $10,000 in unrestricted funds or over $1,000 in funds specifically designated for campaign-related expenditures.

This legislation will also require those organizations that make transfers to other organizations for the purpose of making campaign-related expenditures to report those transfers in order to drill down so that the public truly knows where the money being spent is coming from. It will also allow donors to covered organizations to designate that their donations will not be used for campaign-related activity. If a donor makes this designation, the organization must then certify to the FEC that it will not use the donation in this manner. These requirements force organizations making these expenditures to be aware of the persons whose money they are spending on campaigns.

Our intent is not to seek the names of dues-paying members. Nor do we want to dissuade prospective members or donors from supporting a particular cause or organization. First, as outlined above, we believe that setting up and utilizing a campaign-related activity account will shield any organization from having to disclose any donor that does not want to have his or her funds go to political purposes. Second, creating the option for a donor to affirmatively designate that the donation should not be used for political spending will provide a mechanism to keep this donation walled-off from disclosure or disclaimers. Third, even if a group decides to transfer money from its general treasury to the campaign-related activity account, thus triggering disclosure of its general treasury, we believe the $10,000 threshold will exclude dues-paying members or your average donor who would not want to be disclosed.

This legislation also institutes several enhanced disclaimer provisions for political ads to ensure that the public knows who is sponsoring them. Current regulations require candidates sponsoring ads to stand by their ads and notify the public that they approve the message. Our language extends this requirement to the newly empowered organizations to make the public aware that it is not a candidate or party speaking, in line with Justice Kennedy's language in the decision. Additionally, it requires the top funder of an advertisement to record a similar disclaimer, and a list of the top five donors to be visible on the screen.

Stand-by-your-ad requirements are constitutional and essential. Further, we believe that it would take 8 seconds to read the two disclaimers, and not half of an advertisement as some opponents misleadingly suggest. For those advertisements that are 15 seconds, the act provides for a hardship exemption.

We have instituted all of these additional requirements in order to bring more awareness to the public. I believe that it is completely in the American peoples interest to know who is speaking about candidates, and the Supreme Court agrees. This is not about preventing speech or making speech more difficult, it is solely about making the public aware of who the speakers are. This is fully consistent with the Constitution. There is no reason that any group would decline to spend unless it was attempting to deceive the American public by speaking without identifying who it is. This bill drills down and follows the money so that any organizations attempting to disguise their activities through shadow groups are not allowed to mislead the public. It brings everyones political speech into the sunlight.

I now yield for Senator Feingold, a leader and true champion of reform and transparency.

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