Lieu bill proposes increased transparency of donations to political campaigns and ballot initiatives
By Gary Walker
When the state Legislature reconvened for the 2013-14 session Dec. 3, state Sen. Ted Lieu (D-Marina del Rey) wasted no time in moving to draft legislation that could soon draw the attention of political campaign consultants as well as campaign finance opponents and proponents.
Lieu and Sen. Leland Yee (D- San Francisco) are co-sponsoring a bill that would require a greater degree of financial disclosure of political contributions statewide.
“Transparency and disclosure are critical to a healthy democracy,” Lieu told The Argonaut.
Senate Bills 2 and 3 would increase penalties for failing to properly disclose campaign contributions and require greater disclosure of funding sources on mass mailings and media advertisements.
Additionally, the legislation would close a loophole in state law that permits some nonprofit organizations to finance campaigns without disclosure of their donors.
The state has filed a lawsuit against an Arizona nonprofit corporation that advocated for the passage of Proposition 32, a Nov. 6 ballot initiative. The proposition sought to ban contributions from corporations and unions but exempted independent expenditure committees and big business “super PACs,” or political action committees backed by corporate special interests.
The ballot measure lost 56 percent to 33 percent.
Lieu was troubled by a late infusion of $11 million from money outside the state to the Yes on Prop. 32 campaign where the donors were unknown, and this was one reason that the provision on non-profits is included in the legislation.
“This is a loophole that we hope to fix,” the senator said.
Yee sees what happened with the Arizona non-profit as an affront to democracy.
“Laundering money through non-profits in an attempt to avoid transparency is fundamentally undemocratic,” he said. “Our democracy should not be bought and sold in shady backroom deals.
“The California Disclose Act will close this loophole and ensure that Californians are well aware of who is funding campaigns and ballot measures.”
Proposition 9 created the Political Reform Act in 1974. The law requires detailed disclosure of the role of money in California politics.
This includes the disclosure of contributions and expenditures in connection with campaigns supporting or opposing state and local candidates and ballot measures, as well as the disclosure of expenditures made in connection with lobbying the state Legislature and attempting to influence administrative decisions of state government.
Money has long been a concern in politics, but a landmark federal case involving unlimited political contributions has created an even more unlevel playing field, according to some proponents of campaign finance reform.
Citizens United vs. the Federal Elections Commission, commonly known only as Citizens United, is a 2010 United States Supreme Court ruling that allowed corporations, unions and other donors to raise unlimited amounts of money and donate them to political campaigns. Unlike unions, corporate donors are not required to disclose who is contributing to a particular campaign or raising the funds.
The ruling from the nation’s highest court was part of the impetus for introducing his proposed legislation, Lieu said.
“It’s absurd to allow unlimited campaign donations to super PACs without requiring the donors to reveal themselves,” asserted Marc Saltzberg, a Venice resident and former president of the West Los Angeles Democratic Club. “The idea that you can hide behind a super PAC or a 401 (c) (4) (nonprofit) is really absurd.”
Hans A. von Spakovsky, a former Republican member of the Federal Election Commission, supports the Supreme Court decision, which was decided 5-4.
“The Supreme Court has restored a part of the First Amendment that had been unfortunately stolen by Congress and a previously wrongly decided ruling of the court,” he said, referring to the federal McCain Feingold Act, of which Citizens United overturned certain provisions.
Named for Republican Arizona Sen. John McCain and former Democratic Wisconsin Sen. Russell Feingold, the act regulates campaign financing, prohibiting national political party committees from raising or spending any funds not subject to federal limits.
California League of Women Voter Jennifer Waggoner is an early supporter of Lieu’s proposed bill.
“Voters’ trust in their government is eroded when they can’t find out about the large donations from special interests that play a big role in elections,” Waggoner said. “Effective regulation of money in politics ensures the public’s right to know and promotes confidence in the political process.”
There have been previous attempts to add increased transparency to political donations statewide. Assembly Bill 1648 would have required all political advertisements to identify their top three funders of $10,000 or more and to provide a website where voters can get more information about the top 10 financial backers of the ads.
The legislation was sponsored earlier this year by Rep. Julia Brownley (D-Ventura), who then represented Santa Monica in the Assembly.
Lieu said when voters know who is behind a measure or a candidate, they can vote accordingly.
“The voters in California are very smart and can figure out when an issue is funded by a special interest group,” the senator said. “And that is because of disclosure.”
Saltzberg, who is also the vice president of the Venice Neighborhood Council, said the fact that candidates and ballot measures backed by many super PACs and independent expenditure committees did not win in the last election cycle should not mean the influence of unregulated money in political campaigns should no longer remain cause for concern.
“The fact that they didn’t win this time is not reflective of what can happen the next time,” he said.
Lieu said he wanted the legislation to be all encompassing so that all loopholes would be closed. “Our intent is to cover ballot measures,” he said.
Saltzberg, who was unaware of Lieu’s proposed bill, agrees with it in principle. “But I don’t think it goes far enough,” he added.
The Venice Neighborhood Council vice president thinks a constitutional amendment to repeal Citizens United would be too difficult so he proposes instituting the American Anti-Corruption Act, a nine-point manifesto created by former Republican Federal Elections Commission Chairman Trevor Potter.
Amending the United States Constitution requires either approval of 67 percent of Congress or 75 percent of states seeking to ratify the amendment.
Brownley’s bill did not make it out of the Assembly Appropriations Committee but Lieu believes the results of the Nov. 6 election, where Democratic wins gave the party a super majority in Sacramento – which is required to pass budgetary items and other legislation without being delayed or defeated by Republicans – will give his bill a solid chance in both houses of the Legislature.
“Now that we have a super majority, I’m optimistic that we have good chance at getting (SB 2 and 3) passed,” he said. §