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Schumer, Van Hollen Outline Legislation Responding To Citizens United Decision

Chuck Schumer runs the Rules Committee in the Senate and is a member of the leadership team. Chris Van Hollen runs the DCCC and is also in the leadership. So you can read their legislation today, a response of sorts to the Supreme Court’s decision in the Citizens United case, as the official legislation which Democrats will take to the floor.

The legislation is actually pretty solid. Here are some of the key components:

1) Prevent Foreign Influence in US Elections: This would ban any company with as little as 20% foreign ownership, or a domestic subsidiary of a foreign entity, or any company with at least half of their board as foreign-born, from funding elections. That’s probably a more outsized ban than there was before the Citizens United ruling, as some corporations would fall under this which were allowed to make PAC donations previously.

2) Ban Pay-To-Play: This comes directly out of a recent op-ed in the Washington Post, saying that government contractors would be banned from participating in elections under the Hatch Act. This part of the bill would enforce that ban, as well as banning any company which took TARP money from spending on elections as well.

3) Enhance Disclaimers To Identify Sponsors of Ads: This is the “stand by your ad” standard that all political candidates must offer at the end of their TV and radio spots. Essentially, under this bill you would hear “I’m the CEO of Exxon and I approve this message” after any independent expenditure ad Exxon funded. For shell groups created overnight, their top funder would have to come out of the shadows and stand by the ad. Again, this goes much further than current law.

4) Enhance Requirements for Disclosure of Political Expenditures: Basically more transparency, with required disclosures to the FEC of all political spending from corporations as well as unions and 527 groups. Notices would have to be given to shareholders as well about political spending.

5) Provide Lowest Unit Rate For Candidates And Parties: Candidate ads and party ads would essentially get a cut rate or their ad buying relative to IE spending. I don’t know how enforceable this is. In addition, “the broadcaster must also ensure that the candidate or political entity has reasonable access to airtime.” This is a problem; sometimes candidates get shut off the airwaves because their opponent or other ads block them from participation.

6) Prevent Corporations From Coordinating Their Activities With Candidates And Parties: Self-explanatory. Corporations would be disallowed from direct coordination.

The big question on all of this is whether it’s enforceable. The FEC is a non-functioning body at this point, as the fines are too late and too paltry if administered at all. But if it were all adopted and assuming proper enforcement, it would actually represent a bit of improvement over current law, even from before the Citizens United decision. Of course, it does not preclude the need for a real fix to the campaign finance system like a clean elections law, or a Constitutional amendment banning corporations from political speech. But this is a pretty solid outline.

Schumer and Van Hollen urged quick action on the bill today in a press conference.

“If we don’t act quickly, this decision will have an immediate and devastating impact on the 2010 elections,” Schumer said on a conference call with reporters, saying that Congress is on “deadline” to pass the bill.

Regardless of what Congress does, “it will go down as one of the worst decision the Supreme Court has ever issued,” Schumer said.

Obviously, gaining Republican support for a wide-ranging campaign finance bill will be difficult. But that makes this as much a political play as a policy document. Proving that Republicans are for foreign entities and corporations influencing political campaigns could be useful.

UPDATE: Lawrence Lessig, who has been touting the Fair Elections Now Act (public financing) and a Constitutional amendment on corporate speech, has blasted this legislation, saying “The package the Democrats are proposing is filled with ideas that either won’t work or that, if they worked, would only invite the Supreme Court to strike again.” Here are his reactions:

(1) Ban foreign corporations from influencing elections.

This is a fine idea. Problem is that it is completely unclear how under the Supreme Court’s reasoning this change would be constitutional. The Court said the First Amendment doesn’t care who is trying to exercise the right to speak — that the First Amendment simply limits the government’s power to regulate speech. So how will it find foreigners have less freedom than corporations?

(2) Stop government contractors or TARP recipients who haven’t repaid from political spending.

This selective regulation is Supreme Court bait: it wasn’t imposed on TARP recipients when they took the money, and my bet is the Court views the government contractors limitation as too broad.

(3) Impose new disclosure requirements, so that the ultimate funder is exposed.

A perfectly fine regulation, but to what effect? Will the disclosure really make Members less dependent on the funders?

(4) Impose new disclaimers on TV ads.

Same point as above.

(5) Require candidates to have reasonable access to air time.

This is promising and important, though the Court has signaled increasing impatience with this sort of regulation. So again, an uncertain reform of limited effect.

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David Dayen

David Dayen