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Public Statements

Disclose Act of 2012--Motion to Proceed

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. WHITEHOUSE. Mr. President, I rise to speak about the DISCLOSE Act of 2012, legislation that will shine some much needed light into the flood of secret money that is now polluting our elections. I would like to open with thanks to Senators Chuck Schumer, Mike Bennet, Al Franken, Jeff Merkley, Jeanne Shaheen, and Tom Udall for their hard work in our task force that developed this legislation. I look forward to continuing to work with them through this debate.

On Thursday, Majority Leader Reid moved to proceed to this vital piece of legislation, and we will vote on it this evening. I thank the leader. I and many of my colleagues are looking forward to the opportunity to make the case for this important measure. But in a sense, for the American public, the case has already been made. As anyone who watches television knows, our airwaves are filled with political attack ads. The organizations paying for many of these ads have patriotic and benign-sounding names with words such as ``prosperity'' and ``freedom'' and ``future'' frequently to be found. These names sound harmless, but all too often the ads are actually paid for by secret special interests, such as billionaires and wealthy corporations seeking secret special influence in our democracy. In the process, they drown out the voices of regular American families who wish to participate in elections.

The Republican leader indicated we were going after the impression of mischief where there is none. Many Americans certainly have the impression of mischief.

As U.S.A. Today put it last week in an editorial supporting this DISCLOSE Act:

Everybody's watching what's expected to be by far the most expensive presidential campaign in history, and not without a dose of horror. Freed by the Supreme Court from spending limits, all manner of special interests are opening the spigots to buy influence.

Here is how my home State paper, the Providence Journal, explained the Citizens United decision that unleashed this torrent of special interest money.

The [Citizens United] ruling will mean that more than ever, big-spending economic interests will determine who gets elected. More money will especially pour into relentless attack campaigns. Free speech for most individuals will suffer because their voices will count for even less than they do now. They will simply be drowned out by the big money.

I think the Providence Journal hit the nail right on the head. What has happened since the Citizens United decision has, in fact, proved them right. Senator John McCain said earlier this year:

The United States Supreme Court--in what I think is one of the worst decisions in history--struck down the restrictions in the so-called McCain-Feingold law, and a lot of people don't agree with that, but I predicted when the United States Supreme Court, with their absolute ignorance of what happens in politics, struck down that law, that there would be a flood of money into campaigns, not transparent, unaccounted for, and this is exactly what is happening.

Senator McCain is right. This is exactly what is happening. It is not an impression of mischief, it is mischief on the loose.

Richard Posner, a leading conservative legal scholar and a Federal judge, recently said:

Our political system is pervasively corrupt due to our Supreme Court taking away campaign-contribution restrictions on the basis of the First Amendment.

Our political system is pervasively corrupt. This is from a conservative Federal judge.

The impact of Citizens United has been very clear. In the 2010 midterm elections, the first after Citizens United, there was a more than a fourfold increase in expenditures from super PACs and other outside groups compared to 2006--$69 million up to $305 million--with nearly three-quarters of political advertising coming from sources that were prohibited from spending money back in 2006. Also, in 2010, those 501(c)(4)s and (c)(6) not-for-profit organizations spent more than $135 million in unlimited and secret political contributions. Anonymous spending rose from 1 percent of outside spending in 2006 to 44 percent in 2010.

We are already seeing the influence of money on the 2012 elections. Super PACs and other outside groups have spent over $150 million in this election cycle, about twice of what was spent in the same period of 2008 during the last Presidential election.

Nondisclosing groups, said the New York Times, ``have accounted for two-thirds of the political advertising bought by the biggest outside spenders so far in the 2012 election cycle ..... with close to $100 million in issue ads.''

Campaigns are no longer waged by candidates and parties fighting over ideas, they are now waged by shadowy political attack groups posing as social welfare organizations run by the likes of Karl Rove and other political operatives and fueled by millions of undisclosed dollars from secret special interests. When these secret special interests take over our elections this way, it drowns out the voices of regular individual Americans. It also puts in jeopardy some of the key pillars of a strong middle class, pillars such as Medicare, Social Security, and Pell grants that have paved the way for generations to achieve the American dream but have always been the targets of special interests.

These special interests have motives. They have motives to spend this kind of money. If those motives were good for America and were welcomed by the average American, they wouldn't need and wouldn't want to keep them secret. We need to ask ourselves a very important question: What are they hiding? Why do they demand secrecy? Whatever the answer, one thing is clear: Americans who worry that Washington is too beholden to special interests now need to be concerned more than ever. Hang onto your wallets, here come the special interests, and you won't even know who they are.

As recently reported in the New York Times, secret spending groups have accounted for two-thirds of this advertising. Two-thirds of ad spending from groups, other than candidates or parties, has come from secretive corporations and billionaires whose names and agendas the voters may never know and who will have no accountability for how that money is spent. Impression of mischief, indeed.

Of course, when we don't have accountability, there is no limit to what people will say. One of the restraints on the vitriol and the filth that is so often part of the American political debate is that candidates have to stand by their ads. If someone says something that is awful, if they engage in relentless negative attacks, voters may charge them a price for that. They may find that unwelcome. That, of course, disappears when the name behind the ad is attached to no living person or corporation. It is just an entity, a sham, a phony, a shell.

How has this worked out? Not well for the American public. An April study found that about 70 percent of ads in this election cycle have been negative. That is up from only 9 percent through the same period in 2008. In 2008, 9 percent of ads in that time period had been negative. In this cycle, 70 percent have been negative. Over the last 6 months, if we look at the four top-spending political 501(c)(4) organizations, the ones that don't have to disclose their donors, they spent an estimated 85 percent of their election spending on ads containing deceptions. So 70 percent of the stuff out there is negative, up from only 9 percent, and 85 percent of the big spenders are spending their money on ads that have been determined to be deceptive.

The names of the organizations sound lovely: Americans for Prosperity, American Future Fund, American Energy Alliance, and Crossroads GPS. Without knowing who funds these shadowy groups, the American voter has no idea what mischief they are up to.

This is all a result of the Supreme Court's disastrous and misguided decision in Citizens United v. Federal Election Commission. This is the decision that opened the floodgates to unlimited and secret corporate and special interest money pouring into our elections.

This chart shows how easy it is under our current system for wealthy interests to skirt existing disclosure rules and spend secret millions in election ads. This amounts to a form of legalized political money laundering or, to use the phrase Senator McCain and I used in our brief to the Supreme Court, ``identity laundering.''

Super PACs are supposed to disclose their donors under current law, but that can sometimes be weeks or months after a deceptive ad runs. If a donor wants to avoid even that disclosure, it can set up a shell corporation, which may be nothing more than a P.O. box someplace, and send the money through that super PAC through a shell corporation without a real name showing up on a disclosure form. They just launder it through the shell corporation, and the next thing they know the money is doing their work.

They can also pass the money through a 501(c)(4) social welfare organization. I put the words ``social welfare'' in quotes because that is the IRS phrase that is used for these organizations. There is very little social welfare being accomplished by the big political donor groups known as social welfare associations. The IRS gives nonprofit status to these groups whose primary purpose--and in many cases their only purpose--is to shield big spenders from having their identities disclosed. In many cases, these 501(c)(4) so-called social welfare groups are so closely affiliated with the super PACs that they have all the same staff and the same office space. It is a 501(c)(4) independent social welfare organization for the IRS with the same staff and the same office space as a super PAC. Please. Of course, the 501(c)(4) groups still don't have to disclose their donors, even when they are the same staff and the same office as the super PAC.

On this chart, we see the money raised by one of them, Citizens United, by Republican political operatives, including Karl Rove. They raised money through the Crossroads PAC. It is a super PAC, and it is supposed to disclose its donor. It has attached to it Crossroads GPS, a 501(c)(4) group that is not the super PAC and it can maintain complete secrecy for its donors. Guess which one has raised the most money. It is an easy question. It is the 501(c)(4) group that doesn't have to disclose its donors. The group raised $76.8 million through 2011 as opposed to only $46.4 million raised by its sister super PAC. This is by no means a unique situation.

As the New York Times wrote in an editorial last Sunday in support of the DISCLOSE Act, ``Corporations love the secrecy provided by Mr. Rove's group because it protects them from scrutiny by nosy shareholders and consumers.'' They want a big influence on elections but without leaving any tracks.

An unnamed corporate lobbyist told the newspaper Politico earlier this year that nondisclosure is always preferred by corporate donors. Why is it preferred? Because it makes it impossible for the public and law enforcement to track down the corrupting influence of the money that these corporations spend in elections. The DISCLOSE Act puts an end to this nonsense. It puts an end to using 501(c)(4) groups and shell corporations to shield the identities of big donors.

One thing that should not be lost in the discussion of anonymous spending is the fact that there is one person to whom this spending is never anonymous; that is, the candidate who is either benefited or punished. Although the donors have managed to hide their identities from the public, they can sure tell the candidate how much money they are putting in the candidate's super PAC and, by the way, what position they want that candidate to take on issues. What this creates is a perfect recipe for corruption--wealthy corporations, individuals, and special interests secretly spending millions of dollars to influence a candidate in ways the public never sees.

A rich donor can secretly threaten massive spending against a candidate without even putting up the money. If the candidate doesn't take the right position on an issue, then they can pull the trigger, but they can make the threat quietly.

Political scientist Norm Ornstein recently said:

I had this tale told to me by a number of lawmakers. You're sitting in your office and a lobbyist comes in and says, ``I'm working for Americans for a Better America. And I can't tell you who's funding them, but I can tell you they really, really want this amendment in the bill.'' And who knows what they'll do. They have more money than God.

If the candidate complies, of course, the expenditure is never made, there is no paper trail, no trace of that threat. Yet the system has been corrupted. Let's also dispense with the fiction that this spending is independent. The whole rationale for unlimited spending was that it was to be done independently of candidate campaigns. The reality is that super PACs are anything but independent. Campaigns and super PACS share fundraising lists, donors, former staff, and consultants. Candidates appear at fundraisers for their super PACs. Super PACs recycle ads that were originally run by the candidates. They share film. They are free to act as the evil twins of candidate campaigns, as one FEC Commissioner put it, raising unlimited, secret money, and then spending it on massive amounts of advertising--most of it negative--to benefit their preferred candidates.

Our campaign finance system is broken, and it lends itself to corruption in new and unprecedented ways. Immediate action is required to fix it. Today we are debating a bill that will at least bring some transparency and accountability into this election spending. This should not be a Democratic issue or a Republican issue, and in the past, it has not been. It has always had bipartisan support because it is about protecting our Democratic process. We need to pass the DISCLOSE Act now.

The USA Today editorial said:

Citizens United left the public only one way to protect itself from the rising threat: Disclosure. At the federal level, this would be achieved by the DISCLOSE Act.

I thank USA Today for supporting this bill.

The Supreme Court also made it crystal clear in this very Citizens United decision that disclosure was an appropriate and even a necessary part of a healthy campaign finance system. Here is what Justice Anthony Kennedy wrote, writing for the majority:

[P]rompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation's political speech advances the corporation's interest in making profits, and citizens can see whether elected officials are in the pocket of so-called moneyed interests.

The new version of the DISCLOSE Act will do exactly this. It says nothing more and nothing less than when corporations and other wealthy interests spend money--more than $10,000--to influence our elections, their identities must be disclosed.

There is no question where the American people stand on this issue. Americans of all political stripes are disgusted by the influence of unlimited, anonymous corporate cash in our elections and by campaigns that succeed or fail depending on how many billionaires the candidate has in his pocket--or advisers, perhaps. More and more, people feel their government responds only to wealthy and corporate interests. They see their jobs disappear. They see their wages stagnate. They see bailouts and special deals for the big guys. And they lose faith that their elected officials will listen to them.

Six in ten Americans say the middle class will not catch a break in this economy until we reduce the influence of lobbyists, big banks, and big donors. Seven in ten Americans, nearly, including a majority of both Democrats and Republicans, agree that ``new rules that let corporations, unions, and people give unlimited money to super PACs will lead to corruption.'' Notwithstanding what the NRA and the chamber and other big DC lobbying powerhouses want, they are at odds with the regular American people. Indeed, one in four Americans says they are actually less likely to vote because big donors to super PACs have so much more influence over elected officials than average Americans.

These numbers should be a call to arms for anyone who believes our American democracy is one of our world's shining jewels and should be scrupulously, carefully, ardently protected. Indeed, people are answering this call to arms in numbers that are increasing every day.

I have with me today here on the Senate floor 213,000 Americans--213,000 citizen cosponsors of this DISCLOSE Act, which were collected by CREDO Action. My colleagues can leaf through them and see people from Apple Valley, MN; from San Francisco, CA; from Ashland, OR; from Austin, TX; from Long Beach, NY; from Imperial, NE; from Yorktown Heights, NY; from Brick, NJ; from Schaumburg, IL; people from all across the country--nearly a quarter of a million of them now--coming from all 50 States, and more than 1,000 Rhode Islanders are in this group. Unlike the corporations and the billionaires who are spending hundreds of millions of dollars to buy our elections and who insist on doing it in secret, these regular people are unashamed to stand up for what they believe in. Their pride in civic engagement reflects the best values of America, and their numbers show that this is an issue where a broad cross-section of Americans demand a change to what is happening in our elections.

Justice Antonin Scalia has written:

Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed.

Our friends who have signed on as citizen cosponsors have that courage, and the biggest campaign spenders in the world should as well. Frankly, even those big campaign spenders should be patriotic enough to understand, as Justice Scalia did, that democracy is doomed without civic courage, and they should step up on their own. But, instead, they are hiding behind the rules and hiding their identities and trying to buy influence.

I will conclude by saying that prior to Citizens United, there was a long bipartisan tradition supporting laws that require disclosure of spending in elections. This bipartisan consensus may be reemerging. Senator John McCain of Arizona and I recently filed with the Supreme Court a brief that urged the Court to reconsider the flawed premise of its decision in Citizens United--the false premise that independent expenditures can't lead to corruption or the appearance of corruption. As the statistics about anonymous spending and public perception I have cited make clear, this premise has been fully discredited.

Although the Supreme Court declined this opportunity to put our elections back on a saner path, I am proud to have worked in a bipartisan fashion on that brief with Senator McCain, who has long been a leader in this Congress and in this country on campaign finance issues. I hope our partnership will mark the beginning of greater cooperation across party lines on this issue of vital importance to our democracy.

There are some misconceptions about the act that have colored the public debate. We plan to explain during the course of the debate why the critics of this bill have gotten so many things just plain wrong. This act contains only the most basic provisions requiring outside groups to disclose campaign-related fundraising and spending. The legislation has been streamlined from the DISCLOSE Act that nearly passed the Senate in 2010. It places fewer burdens on covert administrations. It contains no prohibitions on spending, no special exemptions for any group or type of group. Contrary to what the Republican leader said, it does not require grassroots organizations to disclose their donors, and it treats every organization exactly the same right across the board.

Some have complained, such as a Republican witness in the Rules Committee hearing on this bill, that the so-called stand-by-your-ad requirements originally in the bill were too burdensome. He described them, actually, as radical. So we removed them. We have tried to accommodate. I know that many of my colleagues, including Senator Ron Wyden, who authored this stand-by-your-ad legislation and who has heroically fought for it for many years, remained very supportive of these provisions, and I hope we will be able to reintroduce them at another time. But we didn't, so that complaint should be closed off. Some complain that this was just an attempt to influence this election. Well, its effective date is January 1, 2013, so it will not, to the regret of many, influence this election.

According to Republican former FEC Chairman Trevor Potter, the DISCLOSE Act of 2012 is ``appropriately targeted, narrowly tailored, clearly constitutional and desperately needed.''

I stand ready to work with any of my colleagues, Democrats or Republicans, who want to make this bill better, but we can't use complaints--particularly unjustified complaints--as an excuse to do nothing.

While the status quo of unlimited secret money may work to benefit some politicians for the moment, in the long run it will hurt us all, regardless of party. Unlimited money is not a force that anyone can ultimately hope to control, and unlimited secret money is even more dangerous. More important, the American people, who are already beginning to lose faith in our electoral system, can reasonably fear that their elected officials will only care about the anonymous donors writing eight-figure checks in deals and gifts that they will never see.

Many of my Republican colleagues in the Senate know this, and they have supported disclosure in the past. Senator Mitch McConnell, the Republican leader, for instance, was once a great advocate for disclosure. As he said in 2000, ``Republicans are in favor of disclosure,'' adding, ``Why would a little disclosure be better than a lot of disclosure?'' That question is as timely today as it was then.

I hope my Republican colleagues will join us in passing this important piece of legislation. Help us restore the fundamental principle of a government of the people, by the people, and for the people.

The Washington Post wrote yesterday in an editorial supporting this DISCLOSE Act:

We'd like to see a few courageous Republicans rise in the Senate on Monday and declare: Enough is enough.

If our friends across the aisle decide to block this legislation which clearly reflects the will of the American people, I am prepared to force this issue by debating this bill long into the night. If they are unwilling to join us in our mission to shine a light on secret money elections, we will keep the lights on here.

I urge my colleagues to support the DISCLOSE Act of 2012.

I thank the Presiding Officer, and I yield the floor.

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