$$$$: H.R.1 Confronts the Quagmire of Campaign Funding Practices

$$$$: H.R.1 Confronts the Quagmire of Campaign Funding Practices

Issue Reports

By Ginny Jones

H.R. 1, the energized initial legislative contribution of the newly elected U.S. House of Representatives in 2018, focuses on three critical concerns for sustaining and expanding our democracy: an expansive and protected voting franchise, accountable and transparent financing of political campaigns and high standards of ethics for public office holders. This article focuses on the second of these.

“Campaign financing,” notes Ann Ravel, former chair of the Federal Elections Commission, “is like the gateway issue to every other issue you might care about…whether it be education, tax reform or foreign policy.”

The Race for Cash

A recent New York Times front page article trumpets that “the race for cash in the 2020 Democratic primary is reaching a frenetic peak.” The article’s title? “Boasting of Small Gifts, Candidates Privately Vie for Large Ones.” This captures the apprehensiveness of individuals concerned about the role of super-PACs, schemes to avoid detection involving large campaign contributions and the role of “dark money” in American political campaigns.

Dark Money

Dark Money frames the dilemmas of current campaign financing laws for New Yorker writer Jane Mayer and film producer Kimberly Reed. In award winning works, both express apprehension about untraceable money contributed to political campaigns.

Investigative journalist Mayer’s Dark Money: The Hidden History of the Billionaires behind the Rise of the Radical Right, selected as one of the top ten books of 2016 by The New York Times, documents loopholes available for the wealthy to make contributions to nonprofit social welfare groups without having to reveal the monetary source.

Kimberly Reed’s 2018 film Dark Money illuminates the roles of the super-rich in funding elections along with the calamitous impact of Citizens United v. Federal Election Commission, 558 U.S. 310 (2010). In Citizens United, the U.S. Supreme Court ruled that monetary contributions to campaigns were protected by the free speech provision of the First Amendment. The Supreme Court reinforced this interpretation in McCutcheon v. FEC, 527 U.S. 185 (2014). These rulings have transformed campaign financing practices. 

Because of McCutcheon, candidates can more easily band together and raise big money from the same individuals through legal entities called “joint fundraising committees.” These committees let contributors write a single large check to an umbrella group, which, in turn, splits the money up among several beneficiaries. In recent years, joint fundraising committees have proliferated, and McCutcheon has empowered them to become even bigger. —The Editors

The initial focus of H.R. 1, Division B—Campaign Finance addresses the need for increased scrutiny and transparency of money filtered through “shell companies” that can politically contribute to “undermining our democracy.” The legislation requires any organization involved in political activity to disclose its large donors, which allows big-money contributors and special interests to hide their spending in networks of so-called “social welfare” organizations. H.R. 1’s DISCLOSE Act mandates disclosure of the names and addresses of donors who gave $10,000 or more to organizations that engage in "campaign-related disbursements," which includes electioneering communications and independent expenditures.

Public funding of House elections also assumes a key position in H.R. 1 (this legislation governs the election of U.S. Representatives; the Senate would need to pass its own standards for funding senatorial election). Proposals for public financing include a federal tax credit for contributions up to a maximum of $50, matching $150 contributions at a 6-to-1 rate and experimenting with a voucher program in selected states. This raises public support in promoting increased citizen participation and a sense of election ownership but opposition concerning the cost.

H.R. 1 has justifiably generated extensive public dialogue concerning the role of money in democratic elections. See LWVUS positions and LWVIL positions on campaign financing.            

Read Part 1 of our series on H.R.1.

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