Shining a light on recent transparency reforms — did they work?
As Sunshine Week comes to a close, we take a look back at two recent reforms that show the ups and downs of advocating for greater government transparency. One of the pro-transparency changes increased accessibility to campaign donor disclosures. The other failed to stop “dark money” from skirting FEC regulation on donor disclosure while funneling millions of dollars into the 2018 midterm elections.
The first reform, mandated electronic disclosure of campaign finance reports for U.S. Senate candidates, was signed into law by President Donald Trump in September of last year. The regulation was slipped into an appropriations bill by Congress after 15 years of stalled legislative attempts.
Under the previous system, Senate candidates were the only federal candidates not required to file electronically. Disclosures could be filed entirely by paper to the Secretary of the Senate, which then sent the report to the Federal Election Commission. The FEC projected it spent $900,000 in taxpayer dollars per year to digitally convert the files.
Montana Senators Jon Tester (D) and Steve Daines (R) teamed up to pass the legislation, which Tester had been promoting since 2008.
“There was no good policy reason why Senate candidates were filing their campaign finance reports on paper while House candidates and presidential candidates were required to electronically file the same information,” said Michael Beckel, manager of Research, Investigations and Policy Analysis at Issue One, a nonprofit that advocates for campaign finance reform.
Transparency advocacy groups had waged years of advocacy efforts pushing for the change. The Center for Responsive Politics submitted testimony to the Senate rules committee as early as 2012, stating “It is no longer acceptable for a legislative body at the Federal level to refuse to adopt this simple process for ensuring the public’s right to know.”
“Thanks to this change, the public and the press now has access to all the information filed in senators’ campaign finance reports as soon as they are filed with the Federal Election Commission,” Beckel said.
Then-FEC chair, Republican Caroline C. Hunter, said in a statement the new system would “accelerate public disclosure of campaign finance activity, improve accuracy and result in significant savings for taxpayers.”
The second pro-transparency reform, though an effort at greater transparency, has not successfully stopped dark money groups from circumventing FEC guidelines. After a federal court ruling, the FEC issued a press release detailing new guidance for independent expenditures by groups like 501(c)(4) nonprofits that are not traditional political committees. The new guidance requires groups that spend more than $250 advocating for or against candidates to disclose every donor who gave the group more than $200 for “political purposes” during that year.
Yet Erin Chlopak, director of campaign finance strategy for the Campaign Legal Center, said the FEC should further clarify what amounts to “political purposes,” as outside groups are manipulating the vague definition to not disclose their donors while funneling “millions of dollars” into elections, Chlopak said.
Many outside groups quickly took to working around the guidance in the lead-up to the 2018 midterm elections. Some groups contended they did not have to disclose donors or did not report them outright. Other groups listed other groups as their sole contributors, a concern raised by Chlopak. Because of this loophole, a group trying to obfuscate the ultimate source of funding can simply disclose the name of other dark money groups as its donors.
Majority Forward, the largest dark money spender in 2018, linked to the Democrat-led Senate Majority PAC, argued it “does not accept contributions earmarked for a specific political purpose,” and therefore does not report who finances the millions of dollars it is already putting towards the 2020 elections.
The Campaign Legal Center filed a complaint with the FEC against the conservative group Heritage Action for America over lack of donor disclosure. While Heritage Action told the FEC that “no reportable contributions were made” towards $1.6 million of outside spending supporting Republicans, despite its director publically saying the group tells donors “every dollar we raise over our budget we can effectively pour more into” elections.
The FEC’s policy is that “an enforcement complaint be kept strictly confidential until the case is resolved,” an FEC spokesperson said.
Chlopak said while Campaign Legal Center sees the FEC press release on the guidelines as “an improvement,” the commission should issue further regulation clarifying the disclosure requirements for outside groups.
“The content of the press release essentially restates what the court decision says rather than really providing further guidance, an explanation of how to comply with the requirement itself,” Chlopak said. “The FEC is a regulatory agency… and a press release is not a regulatory interpretation.”
As it stands now, major changes to campaign finance laws may be the only real way to shine a light on dark money.
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