MUTZ: More campaign disclosure necessary

November 17, 2012

John MutzWho made a campaign contribution and for how much should be public information before the election. Two court rulings since 2010 and creation of several finance vehicles have complicated and confused the situation.

Reports of an election this year that produced expenditures in excess of $6 billion, extremely large individual contributions, and the emergence of mysterious “super PACs” have increased concern about campaign finance.

Super PACs, officially known as independent-expenditure-only committees, may not make contributions to candidate campaigns or parties, but may engage in unlimited political spending independently of the campaigns. Also unlike traditional PACs, they can raise funds from corporations, unions and other groups and from individuals without legal limits.

These new PACs were made possible by two judicial decisions. In January 2010, the U.S. Supreme Court held in Citizens United v. Federal Election Commission that government may not prohibit unions and corporations from making independent expenditures for political purposes.

Two months later, in Speechnow.org v. FEC, the federal Court of Appeals for the D.C. circuit held that PACs that did not make contributions to candidates, parties or other PACs could accept unlimited contributions from individuals, unions and corporations (both for-profit and not-for-profit) for the purpose of making independent expenditures.

Neither case altered disclosure provisions of the McCain-Feingold law and neither case altered the right of individuals to give unlimited money for political expression.

The case that allowed large individual contributions dates to 1976: Buckley v. Valeo. What Speechnow did was allow contributions to not-for-profits, which includes 501(c)(4) tax-exempt organizations that need not disclose donors, at least not before Election Day.

Campaign spending by groups that do not disclose their donors exceeded $265 million as of Oct. 31 this year, according to the Center for Responsive Politics.

Without doubt, the role of tax-exempt organizations in shielding the identity of individuals or organizations contributing to a campaign should be clarified so that full disclosure can take place. These corporations are primarily regulated by the Internal Revenue Service, an organization not normally involved in campaign finance. Perhaps Congress could give the FEC some audit responsibility for these expenditures and require the not-for-profits to report political donors on the schedule required from other campaign funds.

Concern about the size of contributions or total expenditures are another public policy question. The ability of large donors to buy an election are largely overstated. Even though the popular perception is that advertised media have enormous impact on election outcomes, research fails to produce a correlation between amount spent on high-profile campaigns and victory. Candidates are not sold like soap.

According to the Journal of the American Academy of Arts & Sciences, symbolic manipulation through televised political advertising simply does not work. It can buy name recognition or be used to support or oppose a specific issue, but does little to affect the outcome.

No doubt, new efforts will be made to alter the role of money in politics. Some will propose using public money to pay for campaign ads, an idea that has usually failed in the past.

Others will propose using government’s control of broadcast media to provide free air time, an idea that will be opposed by the industry.

Given the country’s commitment to First Amendment rights of open expression, it seems likely the unlimited use of money will prevail, at least for now. We should insist that complete and timely (before the election) disclosure is the absolute rule of law. That’s essential for fairness.•

Mutz has held leadership positions including lieutenant governor and president of Lilly Endowment and PSI Energy. Send comments on this column to ibjedit@ibj.com.


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