Congressman Price, Senators Tester and Wyden, Introduce the Spotlight Act to Repeal Trump-era Dark Money Rule

February 3, 2021
Press Release

WASHINGTON, DC (February 3, 2021) – Today, Congressman David Price (NC-04), Vice Chair of the House Democracy Reform Task Force, introduced the Spotlight Act which would repeal former President Trump’s damaging rules that allow politically active nonprofit groups—including those with foreign ties—to shield their major donors from the Internal Revenue Service (IRS). The legislation also would strengthen transparency rules for a range of 501(c) groups and their major donors.

Rep. Price’s “Spotlight Act” is cosponsored Rep. John Sarbanes (D-MD), Chair of the Democracy Reform Task Force, Rep. Barbara Lee (D-CA), Rep. Jan Schakowsky (D-IL), and Rep. Eleanor Holmes Norton (D-DC).  Senators Jon Tester (D-MO) and Ron Wyden (D-OR) introduced companion legislation today in the Senate. This legislation is also supported by Senators Bennet, Carper, Whitehouse, Blumenthal, Murray, Van Hollen, Merkley, Klobuchar, Hirono, King, Brown, Cortez Masto, Booker, Menendez, Casey, Warren and Baldwin. Similar language is included under the “Secret Money Transparency” provision in H.R. 1, “The For the People Act, sweeping democracy reform and voting rights legislation.

“For too long, our elections have been plagued by escalating foreign meddling and ballooning contributions from anonymous wealthy donors shielded by our tax code and weak campaign finance rules filled with loopholes,” said Congressman Price. “This unchecked influence on political campaigns distorts our democratic system and weakens the power of voters.  I am proud to introduce this legislation with Senators Tester and Wyden and my House colleagues to reverse the Trump dark money rule and to shine a light on dark money in our elections.”

“Special interests and big money donors wield far too much power in our political system, and are able to do it without Americans ever knowing who is footing the bill,” Senator Tester said. “The Spotlight Act will hold shadowy political groups seeking to influence our politics more accountable, and will restore some much-needed transparency to our elections.”

“Our democracy has been under significant strain and is urgent need of reform. A key piece of reform is reversing a Trump administration policy that allowed dark money interests to operate in total secrecy,” said Senator Wyden. It’s critical that there’s transparency. The wealthy donors spending millions to influence our elections, and undermine our democracy should not be allowed to hide their identities from the authorities.”  

End Citizens United/Let America Vote, Common Cause, and Democracy 21 have endorsed the Spotlight Act. Price is a lifelong advocate for campaign finance reform, introducing bills such as the Stop Super PAC–Candidate Coordination Act to close loopholes for donations made to political campaigns by Super-PACs and the Stand by Your Ad Act to increase transparency of political advertisements.

 

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. Unfortunately, the Trump administration 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 Trump 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.

A copy of the legislation can be found here.