Dems' Campaign Finance Bill Could Be a Privacy Nightmare

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Dems' Campaign Finance Bill Could Be a Privacy Nightmare
AP Photo/J. Scott Applewhite
Dems' Campaign Finance Bill Could Be a Privacy Nightmare
AP Photo/J. Scott Applewhite
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The first major piece of legislation introduced by Democrats after taking control of the House of Representatives is dead on arrival. So long as Republicans control the Senate, the “For the People Act” (HR1) is never going to pass both chambers. But that hasn’t stopped the legislation from being heavily promoted by party stars such as Alexandria Ocasio-Cortez and becoming a cause célèbre on the left. It’s a radical and comprehensive bill that would drastically reshape how the country holds federal elections and otherwise uses campaign finance regulations to hold politicians and moneyed interests accountable. As a Time magazine headline puts it, “Democrats Will Use 'Drain the Swamp' Against Trump in 2020,” and the sweeping changes in HR1 are the centerpiece of that strategy.

There’s not much about how our elections operate that HR1 wouldn’t affect. It would establish a new form of federally regulated speech, a robust public financing system, and create new regulations for political communications on social media, among many other things. All of this has First Amendment defenders on guard. 

However, one of the biggest concerns about the legislation is barely being discussed. HR1 requires so much disclosure of funding sources that, critics say, far from rendering politicians accountable and transparent, it creates a privacy nightmare for ordinary citizens who give to nonprofit organizations.

In 2010, the Citizens United Supreme Court decision ruled that nonprofits with certain IRS designations — 501(c)(4) social welfare organizations, 501(c)(5) unions, and 501(c)(6) trade associations — can spend unlimited amounts of money in elections. These groups do not have to disclose their donors. The pejorative term “dark money” was coined to describe this kind of funding.

In order to allegedly enlighten voters, HR1 requires these nonprofits to reveal their top five donors of $10,000 or more in TV/video political communications (only the top two would be required for radio or audio-only ads). Already required disclaimers for political advertising cut into the time allotted for messaging, and HR1 also includes other burdensome requirements, such as requiring the CEO of the organization to be personally identified in political communications.

This naming, and inevitable shaming, of donors would likely prove to be a huge obstacle for fundraising.  It also opens the door to targeted harassment of lesser-known nonprofit donors. Most everyone who follows politics is familiar with the campaigns to demonize billionaire donors such as the Koch brothers and George Soros, but for years now there have been significant efforts underway to name and shame relatively unknown donors to partisan politics. In 2012, after Idaho businessman Frank VanderSloot was revealed to have donated $1 million to a super PAC supporting Republican presidential candidate Mitt Romney, the Obama campaign’s website put him on a list of "less than reputable" GOP donors. 

Not long afterward, the Wall Street Journal’s Kim Strassel reported that a former Democratic Senate staffer, Michael Wolf, called VanderSloot’s local courthouse in Idaho Falls, seeking VanderSloot’s divorce records -- presumably looking for dirt. At the time, Wolf was working for the Washington, D.C., research firm Fusion GPS, now infamous for its work compiling and disseminating the discredited Trump-Russia dossier. It seems highly unlikely that these kinds of dirty tricks won’t be used on donors to nonprofits once they start being revealed.

Curiously, groups on the left that would be affected by the law have lined up to show their support for HR1. On Feb. 28, 71 members of the Declaration for American Democracy coalition signed a letter directed at members of Congress “to strongly urge you to vote for H.R. 1, the ‘For the People Act of 2019,’ and to vote against any weakening amendment and against any motion to recommit to weaken or remove any provision in the Act.” If you’d like to know more about the Declaration for American Democracy coalition -- who’s behind it and how it’s funded -- well, its website consists of little more than a mission statement, a form for sending letters to Congress, and a non-working email contact form.

However, the signatories to the letter read like a who’s who of progressive organizations and liberal-leaning reform groups, including heavy hitters on the left such as People for the American Way, the Service Employees International Union, Common Cause, Greenpeace, Daily Kos, Citizens for Responsibility and Ethics in Washington (CREW), and MoveOn. Many of these groups are heavily involved in electioneering.

Campaigning for radical disclosure could be in these liberal organizations’ interests. Running for president in 2016, Hillary Clinton railed against the Citizens United decision and dark money dozens of times. Almost never did the campaign coverage mention that the Citizens United case hinged on whether campaign finance regulations could be used to stop a nonprofit from showing a film critical of … Hillary Clinton. Furthermore, the left is not shying away from dark money even as it claims to oppose its use in politics. A recent report from Capitol Research Center notes that a single network of political nonprofit organizations on the left is “afloat in a half-billion-dollar ocean of cash.”

That the political left is pushing for stringent disclosure requirements could simply stem from a belief it is better positioned to win a media and culture war over shaming and punishing the other side’s donors if they were to be exposed. At a minimum, increased donor targeting also raises the specter of even more political polarization. Gun control activist David Hogg started organizing protests at Publix grocery stores last year because Publix had donated money to Adam Putnam, a Republican gubernatorial candidate in Florida who supported the National Rifle Association. Publix had also given $760,000 to Democratic committees in the previous decade, much of which likely went to candidates who were opposed to the NRA. But in response to the gun control protests, Publix suspended all political giving.

Still, it’s telling that virtually no political nonprofit organizations, including those specifically advocating against dark money, voluntarily reveals its donors. Even the notable exceptions are illustrative. The liberal Center for American Progress, one of the largest think tanks in D.C. and another signatory in support of HR1, actually does have a page on its website that lists “Our Supporters.” CAP started revealing its donors in December of 2013, but only after it started getting attacked by others on the left who were suspicious of it cozying up to corporate interests — in July of 2013 the leftist Nation magazine ran an exposé of “Washington institutions esteemed for their independent scholarship [that] don’t disclose donations from corporations and foreign governments,” prominently featuring the CAP.

The think tank issued a lengthy rebuttal before eventually naming its donors later that year. However, CAP still isn’t totally transparent. Of the donors listed on its website that have given it more than a million dollars, all are trusts and charitable foundations. It does, however, note that five anonymous donors have given it more than a million dollars. If those donors have corporate or foreign interests, it’s impossible to know what they are.

Though the left is doing its best to be unified in support of a law that could negatively impact many of its major institutions, there are some revealing cracks in the façade. Incredibly, one of the signers of the Declaration for American Democracy coalition’s letter urging the passage of HR1 is Planned Parenthood Federation of America. In the last decade, both an abortion doctor and an abortion protester have been murdered, and the abortion debate is a magnet for violence and harassment. In fact, in just the last year, state-level Planned Parenthood organizations in New Jersey and Oklahoma have come out against state laws that would have required donor disclosure. Regardless, Planned Parenthood of America has rebuffed repeated inquiries about HR1 and the organization’s apparent willingness to out its largest donors.

And though the American Civil Liberties Union is at pains to emphasize that it supports much of what’s in the bill, it has come out against HR1, extensively detailing its concerns in a 13-page letter. Looming large among those concerns is donor privacy. “The bill unduly burdens constitutionally protected associational rights by requiring widely distributed disclosure of the names of donors to organizations that are not engaged in express advocacy of the election or defeat of the candidate. Moreover, the donors themselves may not even be aware of or support the content of the ad that would now prominently include their names,” notes the ACLU. “Without a sufficient nexus between the covered communications and advocacy of the election or defeat of a candidate, the bill creates too great a risk of invading the privacy of donors to pure issue advocacy groups.”

Despite the concerns of the ACLU and others, the momentum for HR1 and sweeping new disclosure requirements at the state level seems to be happening without regard for privacy concerns. There also seems to be an uncritical acceptance of the idea that more “transparency” always translates into less corruption or that a politician’s vote can readily be explained simply by examining the latest FEC report.

Money is also not always the determining factor in politics in this disruptive era — just ask Hillary Clinton, who spent nearly twice the amount of money Donald Trump did in 2016. The Washington Post further notes that “left-leaning outside groups also outspent their Republican counterparts by considerable margins” in that election. Yet, the media and political observers rarely highlight the complexities or inconvenient facts showing money does not always guarantee electoral or legislative success. And somewhat ironically, oversimplifying or misrepresenting the connection between campaign cash and a particular elected official’s votes is now a standard negative campaign tactic.

The result is that the entire debate on campaign finance regulations often begins and ends with internalized assumptions that may or may not be true. Even the language involved can be loaded. “I would not use the word disclosure and I would not use the word transparency. … Disclosure is for the government. Privacy is for private organizations and individuals,” says attorney Eric Wang, who authored a critical analysis of HR1 for the Institute for Free Speech. “I don't necessarily buy in to this notion that this is all about disclosure and transparency. Because those are terms that are laden with positive connotations and they sort of stacked the deck in the debate of this issue.”

In 2009, Harvard professor Lawrence Lessig wrote a prescient New Republic essay, “Against Transparency,” about the limits of campaign finance disclosure. Lessig says he supports other aspects of HR1 and he’s even amenable to the idea of disclosing very large donations to nonprofits above a certain level, though he acknowledges there’s going to likely be disagreement over how sizable a contribution has to be before knowing about it is deemed to be in the public interest. But of HR1’s invasive disclosure requirements, such as listing the top five donors in every political ad, he says, “I think all of that is stupidly cumbersome and confusing and creates a chill that's not really appropriate.”

If HR1’s disclosure requirements are cumbersome and chilling, that’s nothing compared to some of the even more radical “transparency” proposals that have been bubbling up in the states. In 2018, North Dakota voters passed Measure 1 requiring the disclosure of the “ultimate and true source” of funds spent in any medium in an amount greater than $200 to influence any statewide election, election for state assembly, ballot issue, or to lobby government. The legislature is currently debating authorizing language for the sweeping new ethics commission created by the law, and depending on how enforcement of the regulation plays out, this could, say, require a church that gives money to a pro-life organization to make the details of the church’s tithing public.

New Jersey’s legislature passed a sweeping new state disclosure law, NJ S1500. Among other things, it requires nearly all 501(c)(4)s to disclose many of their donors even if they only provide neutral, factual information about pending legislation. Incredibly, the bill also included a requirement for retroactive donor disclosure going back to 2018, so that people who gave money with the knowledge it could be done anonymously would be exposed. That retroactive requirement was stripped out of the legislation shortly before it passed. (Again, Planned Parenthood of New Jersey publicly opposed this bill.)

In Arizona, the “Stop Political Dirty Money Amendment,” which would alter the state constitution such that the legislature couldn’t modify it, very narrowly missed the number of signatures needed to be on the ballot last year, and has been reintroduced for the 2020 election with significant backing. The bill would require any nonprofit that spends $10,000 in a two-year election cycle to disclose every person who contributed at least $2,500 to it. This proposal is, again, so sweeping it would expose churches, alongside other organizations and individuals with understandable interests in privacy.

California recently started requiring nonprofits to report donors who give more than $5,000. And Idaho and Oklahoma have entertained, but not passed, alarming new disclosure requirements — at least in Oklahoma, the state Planned Parenthood organization thought it was alarming and opposed it.

The current push for radical amounts of disclosure is also crowding out the potential for more practical solutions. Lessig would like to see more consideration of pseudonymous disclosure where “you don't know anybody's name, but you do know where they work and what kind of industry they work in,” he says. “If it turns out that a candidate got 90 percent of his money from Wall Street and then you would look at that candidate and when he says, ‘Let's take apart Dodd-Frank [financial regulations],’ maybe that's motivated not by a judgment about what's in the public interest, but a judgment of what his campaign funders would demand.” But ultimately, there’s no one perfect solution, even if some measure of disclosure is in the public interest.

In the meantime, preying on the Pavlovian instincts of voters to “Stop Political Dirty Money” won’t necessarily fix corruption, to say nothing of protecting privacy rights. Such laws could even backfire if voters quickly realize that the person in the pew next to them knows how much they tithed, or if they resent not being able to give money to groups such as Planned Parenthood or the NRA for fear of having their reputation or business targeted by an internet-driven lynch mob.

There’s much that campaign finance experts such as Wang and Lessig probably disagree on. But in order to have a productive debate on what transparency and accountability for campaign cash should look like, Lessig observes, “We have to be sensitive to the different levels of engagement and different interests at stake.” The worry is that there is no ongoing debate about the limits of transparency, even though the country is on the precipice of enacting laws that threaten privacy and could have major unintended consequences.

Mark Hemingway is a writer in Alexandria, Va. You can follow him on twitter @heminator.



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