What is wrong with the DISCLOSE Act?

Unfortunately, on June 24, 2010, the DISCLOSE Act -- a fundamental threat to political free speech passed the US House -- passed the US House 219-206.

GOOD NEWS: Campaign finance bill fails again

September 23, 2010 - Senate Democrats failed to break a filibuster of a campaign finance reform bill Thursday, marking the second time their DISCLOSE Act has fallen short of the votes necessary to be debated on the floor.

The chief Senate sponsor of the bill, Democrat Chuck Schumer of New York, had tried to make a last-ditch appeal to his Republican colleagues Wednesday by saying Democrats would be open to amendments - including a push back of the legislation's effective date to the next campaign cycle. But GOP senators were unconvinced by the appeal on a bill they believe should have been more openly negotiated and merited a committee debate.

The legislation required 60 votes to move forward and failed, 59-39, without a single Republican breaking ranks. Read more here.

Analysis of House DISCLOSE Act:

The First Amendment to the Constitution of the United States is very clear: "Congress shall make no law... abridging the freedom of speech."  We the undersigned, representing our Nevada organizations oppose and ask you to oppose the DISCLOSE ACT, HR 5175, which was recently passed by the House of Representatives. 


The DISCLOSE ACT is a direct threat to political free speech of both express and issue advocacy groups to communicate with their supporters and the public about office holders, candidates and issues.  The DISCLOSE ACT will have a chilling effect by discouraging certain advocacy groups from communicating about officeholders by exposing citizens who support such efforts to harassment and intimidation, and by smothering organizations in layer upon layer of record keeping and reporting requirements, all backed by the threat of civil and criminal sanctions.  This makes the DISCLOSE ACT fundamentally un-American.  


Not only is the DISCLOSE ACT a threat to many groups, it is discriminatory and written to benefit one side.  The DISCLOSE ACT provides preferential treatment to powerful unions which are exempt from the same reporting and suffocating disclosure requirements of smaller grass root groups.  Proponents of the DISCLOSE ACT say that their target is large corporations, but the bill makes no distinction between for profit and non-profit corporations or between large and small corporations-except where it exempts a few large centralized corporations.  Many issue advocacy groups are incorporated and this bill will have a chilling effect on their advocacy and free speech.  The fact that the act would take place only 30 days from being signed into law means that the FEC will have no chance to create regulations to guide organizations on how to proceed.  Where there is any uncertainty, groups will be acting at their own peril.  This creates another chilling effect on political free speech.


An exemption carved out for the NRA and a few other large centralized corporations is worthless for most groups. One set of criteria in the exemption is that the organization have "1 million or more dues-paying members in the prior calendar year, that had members in each of the 50 states..." This further discriminates against groups like all of ours. What advocacy group in Nevada could possibly have one million dues paying members in their organization, much less members in all fifty states, to exempt them from these limitations on free speech and the harassment that would come to its donors who would have their names and addresses posted on the internet?  This gives larger powerful groups an unfair advantage over smaller ones "to petition the Government."

Among the threatening and chilling requirements would be that our groups turn over our membership and donor lists to the FEC.  This would destroy the anonymity of small donors and those who choose to contribute to organizations engaged in controversial issues.   It would require that we list top funders in political communications and have their names and addresses posted on the internet.  As the ACLU notes, the result would be to deter organizations "from engaging in public communications that would subject its donors to disclosure... and donors sensitive to public disclosure might refrain from giving to the organization."  In both cases "organization's ability to engage in speech will have been curtailed."  The ACLU says "in both cases, those whose names are disclosed would be subject to personal, political, or commercial impacts - something NAACP v. Alabama clearly protects against."

It is no wonder Senator Chuck Schumer says "The deterrent effect should not be underestimated." (The Influence Industry: Disclose Act could deter involvement in elections May 13, 2010). Our members and supporters have a right to support our public advocacy about important and controversial issues without having their identifying information posted on the Internet, exposing them to harassment or retribution by those who may disagree with their beliefs.

THE DISCLOSE ACT would also expand the "electioneering communications" period to 30 days before a primary and 120 days before a general election including asking a representative to vote a certain way or asking citizens to ask the representative to do the same.  That takes two more months out of an election year in which we are subject to special requirements backed by the threat of civil and criminal penalties.   The ACLU notes that if an "issue happens to be on the legislative schedule during this new expanded period, such advocacy organizations are effectively denied the use of a major communications tool in seeking to advance their priorities."


Earlier we quoted the first amendment: "Congress shall make no law... abridging the freedom of speech."  In a May 19th letter to the Committee on House Administration, eight past members of the FEC wrote, "the FEC now has differing regulations for 33 types of contributions and speech and 71 different types of speakers." There are over 800 pages of federal laws and regulations governing "political" speech.  There are more than 1,200 pages in the Federal Register explaining its decisions. H.R. 5175 would add 90 more pages of limitations on free speech about office holders, candidates and pending legislation.  This would exponentially raise the cost of free speech and the right to petition our government.

The DISCLOSE ACT aims to silence political speech by intimidation and onerous regulation.  Such efforts should be rejected swiftly. Thus, on behalf of the many Nevadans we represent, we urge you to reject this un-American and discriminatory assault on free speech by opposing the DISCLOSE ACT. 


Tuesday at 2:45, there will be a cloture vote on the motion to proceed to S. 3628 <http://www.congress.gov/cgi-lis/query/z?c111:S.3628:>, the newly introduced version of Senator Schumer's DISCLOSE Act. The DISCLOSE Act, as you are no doubt aware, is the Democrat attempt to overturn the Supreme Court's decision in /Citizens United /by re-imposing corporate speech prohibitions and newly imposing a raft of burdensome disclosure requirements on political speech by certain covered organizations. House version of the bill passed on June 24, 2010 on a mostly party line 219-206 vote <http://clerk.house.gov/evs/2010/roll391.xml>, which is a reflection of the partisan nature of this bill.

The new Senate version of DISCLOSE closely tracks the version as passed by the House, a summary of which is attached. (This CRS paper
<http://www.crs.gov/Pages/Reports.aspx?Source=search&ProdCode=R41264#ifn29> is also useful, but it has not yet been updated to include the new Senate language.)

_S. 3628 - Summary of Key Provisions_

· Prohibits certain government contractors (but not their unions), TARP recipients (but not their unions), and corporations with certain levels of foreign ownership (but not unions with foreign members), from engaging in electioneering communications

o Unlike the House version, this bill does not contain similar prohibitions on holders of off shore oil leases. (In other words, it omits House section 101(c))

· Broadens the definition of coordinated communications and expands the time-frame in which they can be regulated

· (Includes a section 105, absent from the House version, which clarifies that internet communication is not treated as advertising unless paid for on another person's website.)

· Treats political speech that "functionally" advocates for or against a candidate as an independent expenditure, triggering broad and burdensome disclosure reports.

· Organizations that engage in political speech valued above a certain threshold must disclose all their members and donors who give above 600 dollars (a threshold likely to shield most union donations, but not advocacy group donations)

· These burdens apply to corporations, unions, 501(c)(4), (5), (6), and (7)s , except for those that meet the so-called "NRA exemption" that was included in the House bill.

· Includes "stand by your ad" disclaimer requirements covering the organization's head AND the organization's largest donors (these disclaimer requirements could consume as much as 15 seconds in a 30-second ad).

· S. 3628 does not include exemptions for union transfers between affiliated organizations that was included in the House passed bill.


· The nearly 120 page bill goes far beyond what is affected by /Citizens United/. It seeks to permanently tilt the playing field by silencing critics of the Democrats and their policies.

· This is a partisan bill, the principle architects of which are Senator Schumer and DCCC Chairman Chris Van Hollen. Only two House Republicans (Cao and Castle) supported it.

· This bill does not represent deliberative law making, coming quickly on the heels of /Citizens United/ before any evidence of its impact can be assessed. The Rules Committee has not held a hearing on it and the majority is trying to rush it to the floor via Rule XIV, without the opportunity for amendment.

· The bill includes a variety of threshold triggers that will, in practice, exempt unions from disclosure and disclaimer requirements. According to the Center for Competitive Politics
<http://www.campaignfreedom.org/blog/detail/disclose-act-still-overwhelmingly-favors-unions> S. 3628 would protect "the privileged status as political speakers that unions would enjoy while much of the business community would be silenced."

· The bill does not apply to corporations that own media outlets, which would allow certain large corporations to have unrestricted speech, while most corporations would face the full weight of the bill's burdens.

· This bill is opposed by a wide array of business groups including the U.S. Chamber of Commerce, National Association of Manufacturers, National Retail Federation, Associated Builders and Contractors, International Foodservice Distributors Association, and many others. Issues advocacy groups, such as the National Right to Life Committee, Concerned Women for America, Americans for Tax Reform, and many others, also have voiced their opposition to DISCLOSE. (See attached letters.)

Gregg T. Nunziata

Judiciary and Homeland Security Policy Counsel

Senate Republican Policy Committee

Senator John Thune, Chairman