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Congressman David Price Introduces Bill To Boost Transparency in Elections

September 26, 2018
Press Release

WASHINGTON, DC – Today, Wednesday, September 26, 2018, Congressman David Price (D-NC), Vice Chair of the House Democracy Reform Task Force, introduced the Spotlight Act to boost accountability and transparency in elections.

The bill would reverse the Treasury Department decision that allows politically active non-profit organizations to avoid disclosing certain donor information to the Internal Revenue Service (IRS). The bill also requires these organizations to disclose the names of major donors to the public, not just the IRS. Spending by these organizations is often called "dark money" because these outside groups generally do not have to disclose the sources of their funding and often serve as conduits for extremely wealthy individuals to influence elections.

Rep. Price’s measure is a companion bill to legislation introduced by Sen. John Tester (D-MT) and cosponsored by 28 U.S. Senators. Rep. Price’s Spotlight Act is cosponsored in the House by Reps. Eleanor Holmes Norton (D-Washington, D.C.), Steve Cohen (D-TN), Carol Shea-Porter (D-NH), Anna Eshoo (D-CA), John Garamendi (D-CA), Tim Ryan (D-OH), Sean Patrick Maloney (D-NY), Mark DeSaulnier (D-CA), Salud Carbajal (D-CA), Jan Schakowsky (D-IL), and Katherine Clark (D-MA).  This pro-accountability, pro-disclosure legislation is also endorsed by Democracy 21 and Common Cause.

“The Trump administration’s decision to allow politically active organizations to obscure millions in dark campaign money further weakens our already failing campaign finance system,” said Congressman Price, Vice Chair of the House Democracy Reform Task Force. “At a time when our elections are plagued by unlimited corporate spending, anonymous donors, and illegal foreign meddling, this action provides a mask to special interests and bad actors  while diminishing the power of voters.”

“We need more transparency in our elections,” said Senator Tester. “The Spotlight Act will defend our democracy from dark money, and I’m thankful Rep. Price is helping me fight back by holding political groups accountable and shining more light on our elections.”

“At a time when corporate special interests funded by secretive billionaires always seem to get their way, it is outrageous that the Trump-led Treasury Department would stop requiring donor disclosure information for politically-active non-profits,” said Aaron Scherb, director of legislative affairs at the government watchdog Common Cause. “We commend Congressman Price for introducing the Spotlight Act to help shine a light on secret money in politics so that all Americans can see who is trying to influence their voice and their vote.” 

“Democracy 21 supports the Spotlight Act sponsored by Rep. David Price,” said Fred Wertheimer, Founder and President of Democracy 21. “By eliminating nonpublic disclosure to the IRS of contributions made to nonprofit organizations, the Treasury Department has opened a massive campaign finance loophole. The Treasury Department action has eliminated any practical way for the government to protect against non-profit advocacy groups being used by foreign governments, foreign companies and foreign individuals to launder tens of millions of dollars in illegal, undisclosed foreign money into our elections. The fact that the Trump Administration would open up this loophole in the face of Russian efforts to intervene in our elections and undermine our democracy is indefensible and irresponsible. Rep Price is a longtime leader in the effort to repair our campaign finance laws. Democracy 21 strongly commends Rep. Price for introducing the Spotlight Act which will close the serious campaign finance loophole opened by the Trump Administration.”

Background

In the wake of the Citizens United decision and related rulings by the Supreme Court, politically active non-profits—especially 501(c)4 “social welfare” groups and 501(c)6 trade associations—have flooded federal elections with unaccountable spending over the last three election cycles.  According to the Center for Responsive Politics, spending by organizations that do not disclose their donors has increased from less than $5.2 million in 2006 to well over $300 million in the 2012 presidential cycle and more than $174 million in the 2014 midterms. The Brennan Center has found this “dark money” is concentrated in competitive elections.  In 2014, it amounted to more than $1 of every $4 spent on close U.S. Senate elections and $1 of every $6 in such elections in 2016.

Unfortunately, the Treasury Department in July made this problem even worse by eliminating the longstanding requirement that most tax-exempt organizations (including 501(c)4 and (c)6 groups) report the identities of major donors to the Internal Revenue Service. The rule will make it harder to determine who is trying to influence the voting public. In addition, many tax and campaign finance experts believe this rule change will significantly hamper the ability of the IRS, law enforcement, and intelligence agencies to police the laundering of funds through our political system. It also significantly increases the likelihood that foreign funds will illegally find their way to organizations engaged in political activity. 

The Spotlight Act would rescind the Treasury Department’s misguided ruling and go one step further by requiring 501(c)4, (c)5 and (c)6 groups to publicly disclose the identities of major donors who contribute $5,000 or more annually. This change would, in effect, require dark money groups to publicly disclose the same donor information that private charitable foundations are currently required to disclose to the public. The legislation also removes the ability for the Treasury Secretary to unilaterally exempt certain tax-exempt groups from donor disclosure obligations. These public disclosure provisions would apply to filings for the 2018 tax year. 

The full text of the bill can be found here.

 

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