The Changing Center of Gravity in Campaign Finance Reform

Eliza Carney has an interesting piece in Roll Call observing that in light of Congressional inaction, several federal agencies have now moved to center stage in the fight over unrestricted campaign money. While bills like DISCLOSE Act continue to be proposed, procedural bottlenecks and the current absence of Republican support for campaign finance regulations have left many campaign finance reform advocates looking elsewhere. As Carney explained:

The shift in focus to agencies such as the Federal Communications Commission, the Securities and Exchange Commission and the IRS — not the typical locus of political money fights — reflects a tacit acknowledgement that campaign finance legislation is going nowhere on Capitol Hill.

As Carney notes, several important agency proposals are already on the table. SEC Commissioner Luis Aguilar gave a speech last Friday encouraging the SEC to adopt a rule that would require public corporations to publicly disclose their political expenditures to investors. This rule-making petition (SEC File No. 4-637) is already one of the most commented-on proposals in the agency’s history. The IRS has similarly been called on to consider several proposed rules that would limit the political activities of certain tax-exempt entities such as 501(c)4 organizations. The FCC is considering modernizing its disclosure forms from paper to an electronic version. And the Federal Elections Commission (FEC) has been under constant pressure—from Steven Colbert and countless others—to revise its toothless regulations on coordinated communications and independent expenditures.

While Senators and Representatives interested in campaign finance reform remain somewhat stymied in the legislative realm, they have joined efforts calling on agency heads to act quickly and decisively even as they continue to push for bills like the DISCLOSE and Shareholder Protection Acts. Indeed, several coalitions of Senators have recently been carrying out their responsibilities to their constitutions by publicly supporting efforts to get the FCC, the FEC, the IRS, and the SEC to launch rulemakings or to adopt the proposed rules described above, all of which would improve transparency and accountability over campaign-related spending.

Particularly in the area of campaign finance regulation, this shift in power away from an increasingly ineffectual and obstructed legislative branch toward federal agencies should not come as much of a surprise. The Brennan Center explained this dynamic in its 2010 testimony before the U.S. Senate Committee on Rules & Administration, writing that “Congressional stalemate is likely to push the President to seek policy change through administrative action.” Longer-term questions of governability aside, independent agencies, courts, and state legislatures are all relatively empowered in their ability to address the nation’s political demands under this hydraulic view of political power.

Beyond the shift in attention to federal agencies, these dynamics are already having an enormous impact on how parties and campaign donors are focusing their attention and resources. The states have also become an important arena for maintaining transparency in the election system. A number of states (including most recently California) are considering corporate governance reforms and disclosure laws that would provide some much needed transparency and oversight into political spending. The Obama administration, additionally, could make a substantial immediate impact to staunch the flow of secret money in elections by issuing the draft executive order requiring government contractors to disclose their contributions to groups that engage in political spending.

While there are good reasons to be concerned about the dysfunctionality of the federal legislative branch, this shift presents important opportunities for democracy advocates to work with government officials whose dependencies on private money are not quite as extreme. There is a lot that can happen at the state level. And providing public comments and keeping political pressure on federal agencies remains one of the most critical battlegrounds for resisting the harms that unlimited corporate campaign spending poses for the democracy.