Center for American Progress

RELEASE: CAP Calls for Executive Actions to Address the Influence of Money in Politics
Press Release

RELEASE: CAP Calls for Executive Actions to Address the Influence of Money in Politics

Washington, D.C. — The dominance of unaccountable and often anonymous big-money contributors in political campaigns is an increasing problem. Nearly five years after the U.S. Supreme Court’s Citizens United decision—which eased decades-old limits on corporate and union participation in federal campaigns—campaigns are increasingly in the hands of interests that voters cannot hold directly accountable or even identify. To address the growing problem of money in politics, the Center for American Progress today called on the Obama administration to take action to increase transparency and accountability through an Internal Revenue Service, or IRS, rulemaking on political activity by nonprofit organizations, an executive order regarding political activity by federal contractors, and a Securities and Exchange Commission, or SEC, rulemaking on corporate political disclosure.

According to the Center for Responsive Politics, the 2014 midterm elections were the most expensive in history with more than $3.6 billion in spending. A significant amount of this spending, especially in competitive races, was conducted by groups that are supposedly independent of the candidates. Many of these “independent” organizations—so called “dark-money” groups—do not disclose their donors.

“The flood of dark money in our elections is not healthy for democracy, and the post-Citizens United landscape has opened up new avenues for undisclosed political spending by corporations and individuals,” said Michele Jawando, Vice President for Legal Progress at the Center for American Progress. “We must take action to protect our elections and governance from being auctioned off to those who yield the most economic power.”

“While Congress and Supreme Court precedent stand in the way of major reforms on money in politics, there are concrete steps that the executive branch can take to increase disclosure, acting under current law,” said Alex DeMots, Vice President and Deputy General Counsel at the Center for American Progress. “Increased disclosure could help provide the  information voters need to hold their elected representatives accountable.”

Specifically, CAP is calling on the executive branch to act in the following three areas:

  1. IRS rulemaking on political activity by nonprofit organizations: Current regulations enable so-called dark-money groups to masquerade as 501(c)(4) “social welfare” organizations, thereby avoiding campaign finance disclosure laws. The IRS should clarify the rules for 501(c) organizations and should also tackle the problem of undisclosed political spending more directly by amending the regulations for Section 527 of the tax code. Rather than simply regulating dark money groups out of Section 501(c), the IRS should regulate those groups into Section 527 and thereby mandate public disclosure of donors.
  2. Political activity by federal contractors: The executive branch should mandate further disclosure of political spending by federal contractors and should furthermore require those contractors take steps to ensure that they are not making impermissible federal political contributions.
  3. SEC rulemaking: Currently, there is no rule requiring corporations to disclose political activity expenditures to their shareholders. The SEC should prioritize the development and implementation of a political activity disclosure rule. This corporate transparency would not only help to ensure that corporate spending is in line with shareholder interest, but it would also combat the problem of dark money.

Read the column: Addressing the Influence of Money in Politics Through Executive Action by Alex DeMots

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For more information or to speak to an expert, contact Chelsea Kiene at [email protected] or 202.478.5328.