Campaign Finance Reform
On January 21, 2010, the Supreme Court announced its ruling in Citizens United vs. the Federal Election Commission. In its decision, the Court overturned a provision of the Federal Election Campaign Act which prohibited corporations and unions from funding advertisements advocating the election or defeat of a candidate for federal office. Additionally, the Court overturned part of the 2002 Bipartisan Campaign Reform Act (McCain-Feingold) which regulated corporate and union funded issues ads which mention federal officials but fall short of expressing a choice in an upcoming election.
Left standing by the Court ruling was a century-old ban on corporations making direct contributions to candidates. In their decision, the five justices voting in the majority cited First Amendment rights as the central issue.
On June 24, 2010, the House considered H.R. 5175, known as the DISCLOSE Act (Democracy is Strengthened by Casting Light on Spending in Elections Act). This bill was introduced in response to Citizens United vs. Federal Election Commission. Despite the pretensions of its flamboyant title, the DISCLOSE Act was a highly flawed, partisan attempt to limit the political speech of only some entities affected by the Supreme Court's decision. H.R. 5175 passed the House by a vote of 219 - 206. Rep. Tom Petri voted against adoption of the DISCLOSE Act. Similar legislation was not considered in the U.S. Senate, and the DISCLOSE Act did not become law.
The DISCLOSE Act attempted to limit the influence on federal elections of the new money made available by the Supreme Court's decision. Among its provisions, H.R. 5175 would have required significant disclosures by corporations, unions, 527 organizations, and 501(c) groups, including an organizational disclosure statement as part of radio and television ads. Additionally, it would have required such groups to provide reports of their campaign activities to shareholders or members, and it would have prohibited firms with federal contracts from making certain campaign expenditures and disallowed corporate political expenditures from domestic corporations whose shares are more than 20 percent owned by foreign nationals.
Not all of its provisions, however, would be applied equally to corporate and union donors. For instance, the bill would have limited the political speech of government contractors, but contained no such limit on labor groups receiving grants from the government or negotiating employment contracts for its government-employee members. Corporations whose stock is 20 percent owned by foreign entities (stricter rules apply in cases where ownership is held by a foreign government or its government officials) would have been prohibited from political involvement, but the legislation was silent on the issue of unions with international affiliates. Additionally, H.R. 5175 would have required the public disclosure of all donors whose annual contributions exceed $600, a total low enough to include most corporate donors but higher than the average annual dues paid by the members of the 15 largest labor unions.
As a general rule, Rep. Petri believes disclosure is an important element of effective campaign finance regulation. Knowing who is financing a candidate's campaign is crucial information that could influence a voter's choice on election day. In the end, any system of disclosure must be implemented fairly so as to not favor one political party over the other. In this respect, H.R. 5175 was an absolute failure.
Attracting Small Donors to Political Campaigns
Rep. Tom Petri has a long standing interest in broadening the base of donors contributing to political campaigns. During the 111th Congress, Petri introduced H.R. 726 - The "Citizen Involvement in Campaigns Act" (CIVIC Act), and he will be reintroducing it in the current 112th Congress.
This bill seeks to revive and expand the tax credit for political contributions, which was in place from 1972 until the comprehensive tax reform of 1986. Under this proposal, a taxpayer who makes a political contribution to a candidate for federal office or a national political party could claim a tax credit of up to $200 per year or a tax deduction up to $600 (both figures doubled for joint returns). With this bill, Rep. Petri seeks to encourage broader participation in the funding of political campaigns, and in so doing provide a counterweight to the influence of big-money donors and special interests. It stands to reason that if politicians were less financially dependent on such donors, the influence of those donors would also be diminished.
Developments in the 112th Congress
Early in 2011, various media outlets reported on a draft executive order circulating within the Obama White House. This order would place new political disclosure requirements on companies bidding for federal contracts. Such companies would need to disclose contributions made over the previous two years to any federal candidate, including individual contributions made by company officers and directors. These firms would also be required to disclose any contributions made to independent groups that involve themselves in political campaigns. While disclosure of campaign contributions to federal candidates is already law, the policy concerning donations to independent groups is a new requirement which would not apply to any other class of political donors.
Reaction in the House of Representatives has been swift and negative. On May 12, 2011, the House Committee on Oversight and Reform held a hearing in response to this draft order. Of this hearing, Committee Chairman Darrell E. Issa stated, "Thursday's hearing of the House Committee on Oversight and Government Reform fulfills the committee's responsibility to safeguard the federal contracting and procurement processes from the exploitation and the undue influence of partisan political concerns."
On May 25, 2011, during consideration of H.R. 1540, the National Defense Authorization Act for Fiscal Year 2012, the House adopted an amendment by a vote of 261 - 163 which would prevent the implementation of the policy anticipated by the Administration's draft executive order. On June 2, 2011, the House adopted an amendment, by a vote of 252 - 170, to the Department of Homeland Security Appropriations Act, 2012, which would prevent the use of funds provided in the bill to enforce or implement an executive order concerning additional disclosures of political spending. Rep. Petri supported both of these amendments.