Sunlight Foundation Policy Center

The Sunlight Foundation's policy team is helping to create a more open, transparent government.

Our policy work joins issue expertise with an open, innovative approach to advocacy, bringing technology to analysis and lobbying, and adding substantive detail to our vision for digitally empowered governance and citizenship.

Sunlight Agenda 2010: Principles for Transparency in Government

A New Regime Required For Disclosure
By Ellen Miller on 01/29/10
LINK

As most of you know I have a long history in the campaign finance field as a founder of two organizations – one which is the nation’s première money and politics data crunching organization and a nonprofit that pioneered the concept of a system of full public financing. So it was with some substantial interest that I reviewed (and yes, I admit with horror) the results of the Supreme Court’s decision in Citizens United v. the Federal Election Commission, which opened the floodgate for corporate and union spending in elections. If the sheer size of corporate bank accounts is any indicator, we will soon see just how much money can buy in the political arena.

Or will we? That is the critical question that must be addressed. Without an immediate update to the disclosure laws — covering everything from who has to disclose, what is required to be disclosed, how often, and in what form — the public will be unable to see this new spending as it occurs, nor how corporations and unions pour money into the many other pockets of a politician’s coat. Without vastly improved disclosure, we won’t be able to understand the new play of forces in Washington. Lobbyists, as well as top officials for corporations and unions, will have a new kind of leverage over politicians. The only deterrent to widespread arm-twisting of public representatives by private interests—short of a constitutional amendment reversing the Court’s ruling, or major changes in how campaigns are financed—may well be the requirement that such arm-twisting be disclosed in a timely manner. Clearly, now more than ever, our entire system of public disclosure of election-related contributions and expenditures needs to be upgraded to keep pace with the influences it is designed to track. And in the 21st century this means that everything must be filed online, in real time.

Whatever one may think about the Citizens United underlying argument concerning the First Amendment and campaign finance law, there is a small ray of hope to the ruling, which is the near unanimous support on the Court for robust political disclosure rules. The majority opinion in Citizens observed that the Internet is becoming the best way to hold politicians and influencers accountable, allowing citizens to judge political speech and government action on their own terms. But in our view, the Court majority is being a bit too optimistic about the current state of political disclosure. For online transparency to perform the function ascribed to it by the Citizens United ruling, Congress has to create new laws that reflect both the new reality of expanded independent spending to influence politics, as well as the existing array of money-driven influences on public officials.

In addition, we must take into account the new realities of our 24/7 world and insist that disclosure move as fast as influence: if a lobbyist can book a meeting with a Congressman and get an earmark inserted into a bill on a Monday, the fact of that meeting, its topic, and the result should all be reported by Tuesday. There is no longer any technical reason why all the players involved in making decisions in our nation’s Capitol, from lobbyists to staff to Members of Congress and government regulators, can’t report online, on a 24-hour basis, their interactions. Lobbyists for foreign governments and government officials overseeing the securities industry already report such contacts in rich and timely detail; that disclosure regime needs to be expanded to Congress as well. Otherwise, and in the face of what Citizens United has now unleashed, our existing disclosure regime will be as useful as a having a video camera that records a robbery at a bank ATM machine, but whose tape can’t be accessed for three to six months after the fact.

Sunlight has now prepared some detailed recommendations to this end and John, our policy director, will be posting later today on the specifics of Sunlight’s proposals. We’d really welcome your feedback and your ideas. Please leave them in the comments.

A Comprehensive Disclosure Regime in the Wake of the Supreme Court’s Decision in Citizens United v. Federal Election Commission.

(also available as a PDF)

The Supreme Court, in its Citizens United decision, opened the door to an unfettered, unregulated influx of money into elections from corporations and labor unions. A first step in addressing the multitude of problems the decision created is disclosure. It is incumbent upon Congress to immediately create a robust, rapid transparency regime that takes full advantage of technology. This requires real-time, online transparency on every level of influence, from independent expenditures to lobbying to bundled campaign contributions.

I. Create a Powerful Independent Expenditure Reporting System

Rationale: The American people have the right to know how much money corporations and labor unions spend to influence elections. Disclosure must reveal whether corporate and union contributions are being channeled through straw organizations or middlemen.

Corporations, labor unions and other organizations must be required to file electronic independent expenditure reports with the Federal Election Commission (FEC). The reports must be filed within 48 hours of making or contracting to make an independent expenditure. Expenditures made within 60 days of an election must be filed within 24 hours.

The independent expenditure report must include the name and address of the entity making the independent expenditure as well as the date and amount of the expenditure. The report must describe the purpose of the expenditure, the medium, (whether it is a radio ad, direct mail, etc.) and it must name the candidate supported or opposed by the expenditure. It must also identify the office for which he or she is running.

Any organization making an independent expenditure must identify the name and address of any entity that has provided aggregate contributions to that organization over $200, any portion of which was used to fund the independent expenditure.

An individual who files the independent expenditure report on behalf of a corporation must certify, under penalty of perjury, that there was no coordination between the organization and the candidate. Criminal and civil penalties should apply.

The FEC shall ensure that all independent expenditure reports are online immediately upon receipt and shall create a searchable, sortable database of independent expenditures.

II. Provide Shareholders with Timely Data about Corporate Political Expenditures

Rationale: After Citizens United, corporate CEOs can spend general treasury funds—in essence, money belonging to shareholders—on political activities. Shareholders are entitled to know immediately if their money is being spent to encourage the election or defeat of a candidate.

The current “8-K” reporting system of the Securities and Exchange Commission (SEC), by which corporations are required to file a separate report to announce major events that shareholders should know about, should be updated so that spending on political activities, including in-kind contributions as well as contributions, membership dues or other payments to organizations that engage in political activities, is reported each time aggregate spending totals $10,000. These reports should be filed electronically, within 48 hours.

The SEC must make this information publicly available through its disclosure database.

In addition, corporations should file reports with the SEC identifying all senior management responsible for approving political expenditures, and the company must promulgate and disclose its guidelines for political spending.

The Department of Labor shall require unions to similarly disclose their political activities in a searchable, sortable, downloadable database.

III. Require Substantive, Timely Disclosure by Lobbyists

Rationale: To demonstrate that corporate or union independent expenditures are not made in coordination with candidates, independent expenditure reporting must be coupled with real time, online disclosure of all lobbying contacts.

The 20 percent exemption for lobbyist reporting must be eliminated so that all significant contacts—by phone, in person or electronic—in which a request is made for a government action are fully disclosed. Corporate and union heads, anyone who bundles campaign contributions or other influential insiders must be subject to the Lobbying Disclosure Act (LDA) rules for disclosure. These reports must provide: the name of the official being lobbied, a summary of the action requested and the name of the lobbyist’s client or employer. Only individuals who are able to make a good faith estimate that their income or expenditures related to lobbying fall below a certain threshold would be exempt from disclosure requirements.

Lobbyist disclosure reports must be filed electronically within 24 hours. To facilitate filing and disclosure, the House Clerk and the Senate Office of Public Records shall develop an online and mobile tool for collecting lobbying disclosure reports. Lobbyists will use a unique identifier for themselves and their clients or employer to streamline filing and disclosure.

All reported lobbying contacts must be made available to the public in a searchable, sortable, machine-readable format.

Disclosure of contacts by executive branch officials – currently limited to requests for Troubled Asset Relief Program (TARP) or stimulus funds – should be reworked so that all significant contacts in which a specific government action is requested are reported in real time and online.

IV. Increase Disclosures Related to Paid Advertisements

Rationale: Just as candidates are required to “stand by their ads” so that the public knows who is delivering the message, corporations, labor unions or other entities that air political ads should also take responsibility for and enlighten the public about who is behind a message.

Disclaimers on independent expenditures should require a spokesperson to state the name of the corporation that paid for the ad, as well as the corporation’s approval of the message. In addition, the entity’s address or Web site must be included in the advertisement.

An online database of paid political advertisements should be created, and should include the text or video of the ad. It should identify where and when the ad was placed, the cost to run the ad and the name of the organization that paid for it.

V. Strengthen Reporting by Political Candidates

Rationale: To foster greater trust in government, it is imperative to demonstrate that there is no coordination between the corporation and the candidate. Timelier electronic reporting of campaign disclosure statements, including better reporting of bundled contributions, will aid in demonstrating independence while enabling the public to better understand the entire ecosystem around money in politics.

Campaign finance reports should be filed monthly instead of quarterly, and all campaign finance reports – candidate, PAC and party – should be filed electronically with the FEC so that contribution information is available online, in a searchable, sortable, machine-readable format immediately after the reports are filed.

The FEC should be required to rewrite its regulations regarding bundled contributions so as to better capture and disclose the identity of anyone who bundles.

Bundlers who have significant contacts with members of Congress or executive branch officials should be required to register and report under the LDA.

VI. Provide for Meaningful Enforcement

Rationale: To ensure compliance with the new disclosure regime, significant penalties must be available to agencies charged with enforcing the law.

The Justice Department, the FEC and the SEC must be armed with strong civil and criminal sanctions that can be imposed upon any organization or individual who knowingly breaks or recklessly disregards these disclosure rules.

To fund the new disclosure and enforcement mechanisms, filing fees for corporations making independent expenditures must be imposed on a sliding scale: The greater the independent expenditure, the larger the filing fee.

VII. Ensure Interoperability of the Data

Rationale: In order for citizens to have a complete picture of the greater influence money in politics will have in a post-Citizens United era, all data about campaign finance must be interoperable.

All information to be reported under this regime must be reported electronically and available online in real time. The FEC, SEC, Secretary of the Senate, Clerk of the House and any other agency charged with collecting and disseminating campaign finance data must be required to develop a system to create a common data format standard. The format should be open and nonproprietary.

Transparency Reforms on List of President’s Priorities
By Ellen Miller on 01/27/10
LINK

Copies of the SOTU speech are now circulating and there are several things in it that Sunlight is extremely happy about.

First, the President will call for the establishment of a single Congress-wide database so that all of us can track earmarks. A state-of-the-art, user-friendly online database, one that allows users to search, sort, and download machine-readable data, will spur more citizen interest and involvement — and accountability — in federal budgetary questions.

Sunlight has long advocated transparency to ensure that earmarks reflect the public interest. There is a long history of members abusing earmarks, requesting funding to build bridges to nowhere and to reward political allies, family members and even for personal enrichment. These abuses were most prevalent when there was little transparency in the process. Until 2007, members did not disclose which earmarks they requested, recipients were not named and individual earmarks were scattered throughout a dozen or more congressional committee documents that totaled hundreds of pages.

While the last two Congresses have improved earmark disclosure, it’s still impossible for a citizen to find, in a single place, all the relevant information about the projects their elected lawmakers request before votes are taken on them. What the President is requesting — a centralized database with information posted before final decisions are made — is a much-needed change.

Second, the President is calling for more complete disclosure by lobbyists when they are lobbying the White House or Congress. Under his plan, each contact would be reported, presumably with enough specificity to be meaningful. Sunlight believes strongly that such disclosures should be made electronically, published promptly and maintained online in a downloadable, searchable, sortable format. We believe that disclosure should include all legislation and regulations discussed and all requests for specific services or government funding. Legislative contacts should be reported within 24 hours of any meeting. In addition, the requirement that contributions by registered lobbyists be reported semiannually should be amended to require contributions be reported within 24 hours of being made.

And third, the President calls for fixes to the campaign finance system in the wake of the Citizens United Supreme Court decision. We believe that this decision certainly calls for an immediate update to the entire campaign finance disclosure law regime — covering everything from who has to disclose, what is required to be disclosed, how often, and in what form – whether the spending comes directly from corporations’ or unions’ treasuries, from lobbyists, political parties or the candidates themselves. Clearly, now more than ever, our entire system of public disclosure of election-related contributions and expenditures needs to be upgraded to keep pace with the influences it is designed to track. And with the technical capacity we now have in this 24/7 world, this means that disclosures must be filed online, in real time.

We applaud the President for making these new initiatives and stand ready to consult with Congress and the administration to find the best technical means to accomplish these goals.

Excerpts from the Speech below:

Rather than fight the same tired battles that have dominated Washington for decades, it’s time for something new. Let’s try common sense. Let’s invest in our people without leaving them a mountain of debt. Let’s meet our responsibility to the people who sent us here.

To do that, we have to recognize that we face more than a deficit of dollars right now. We face a deficit of trust – deep and corrosive doubts about how Washington works that have been growing for years. To close that credibility gap we must take action on both ends of Pennsylvania Avenue to end the outsized influence of lobbyists; to do our work openly; and to give our people the government they deserve.

That’s what I came to Washington to do. That’s why – for the first time in history – my administration posts our White House visitors online. And that’s why we’ve excluded lobbyists from policy-making jobs or seats on federal boards and commissions.

But we cannot stop there. It’s time to require lobbyists to disclose each contact they make on behalf of a client with my Administration or Congress. And it’s time to put strict limits on the contributions that lobbyists give to candidates for federal office. Last week, the Supreme Court reversed a century of law to open the floodgates for special interests – including foreign companies – to spend without limit in our elections. Well I don’t think American elections should be bankrolled by America’s most powerful interests, and worse, by foreign entities. They should be decided by the American people, and that’s why I’m urging Democrats and Republicans to pass a bill that helps to right this wrong.

I’m also calling on Congress to continue down the path of earmark reform. You have trimmed some of this spending and embraced some meaningful change. But restoring the public trust demands more. For example, some members of Congress post some earmark requests online. Tonight, I’m calling on Congress to publish all earmark requests on a single Web site before there’s a vote so that the American people can see how their money is being spent.