Meaningful Campaign Finance Reform: Full and Immediate Disclosure on the Web
by Jerome F. Winzig
Last month, Congress passed a campaign finance reform bill requiring certain tax-exempt groups that run political ads to disclose who pays for their political activities. The bill, which the President signed the next day, is an important step in the right direction. The idea of disclosing donors would go a long way towards honesty and openness in politics. Unfortunately, the bill is far too limited, which probably explains why it passed by such overwhelming margins, 385 to 39 in the House and 92 to 6 in the Senate.
The bill applies to groups registered under section 527 of the Internal Revenue Code, which provides for a category of tax-exempt organizations for political parties and political committees. Under this section, organizations can tell the IRS their sole purpose is to influence an election, thereby qualifying for a tax exemption, while simultaneously telling the Federal Election Commission they don't have to disclose their donors because their influence is not directed at a specific candidate.
Even with the bill's passage, however, many political organizations will still be able to engage in major political activity without disclosing their donors. Television stations are running numerous ads urging citizens to "vote environment" (on the left) or to vote against "Canadian-style health care" (on the right). The sponsors always seem to have generic-sounding names, leaving voters wondering who is doing the advocating.
The National Education Association's strategic plan for 1998-2000 lists $386,000 for "organizational partnerships with political parties, campaign committees and political organizations representing elected officials at the state and national level" and $540,000 for a "national political strategy." At the 1996 Democratic Convention, one tenth of all the delegates were members of the NEA. Yet, since 1994, the NEA's annual IRS filing has reported zero when asked to "Enter the amount of political expenditures, direct or indirect as described in the instructions for line 81." The instructions for line 81 state that a political expenditure is any expense "intended to influence the selection, nomination, election, or appointment of anyone to a Federal, state, or local public office."
On the other end of the political spectrum, the Republican party is looking at ways to capitalize on a newly-opened campaign finance loophole. The loophole was created by a federal appeals court decision in Colorado, which struck down a 26-year-old limitation on how much money political parties can spend directly on behalf of individual candidates.
It is time for a federal law that requires the full and immediate disclosure of all donors for all political activities. We're not talking rocket science here. The bill itself would not have to run more than a few paragraphs in length. Furthermore, given the Internet, the entire enforcement mechanism could be described in a typewritten page or so.
Let's say the federal government set up a new web site, called www.campaign-finances.gov. Whenever a political group wanted to run an ad, it would be required to log in to the site, register itself, and receive a simple campaign finance ID for that ad. Something like "MN-July-2000-12", indicating the twelfth registration for the month of July in the state of Minnesota. The site could use the same secure Internet technology used to buy airline tickets or trade on eBay.
The political organization would then be required to send regular e-mail messages to the www.campaign-finances.gov web site, listing all of its donors and their contribution amounts. Donations would have to be reported within two weeks of their receipt. The process would use common Internet technology. The new campaign finance web site would process the e-mail filings and post the donors for all to see on the web site.
In addition, all political ads would be required to prominently display the campaign finance ID assigned to that ad. Radio ads would have to end with the campaign finance ID. Individual citizens and reporters alike would then be able to go to the web site and use the ID to look up what organization had sponsored the ad and who its donors were.
That's it! Nothing more. It would let each of us find out for ourselves who is paying for today's political campaigns. It would help newspapers investigate the background of these same campaigns. Most importantly, it would help counterbalance the power of money in politics with another weapon just as powerful--information.