Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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The SEC Won't Force Corporations to Disclose Their Political Spending (Yet)

| Mon Dec. 2, 2013 7:44 AM PST
SEC chair Mary Jo White.

In the summer of 2011, a group of law school professors filed a petition (PDF) with the Securities and Exchange Commission, the nation's leading financial regulator, asking it to force corporations to disclose their political spending. At the time, a small but growing number of corporations voluntarily revealed their political giving, but the law professors argued that corporate executives shouldn't ever be able to spend shareholders' money on campaigns and elections without telling shareholders where it was going.

Support for the corporate disclosure petition spread like brushfire. More than 600,000 comments—most of them supportive—were filed in response, a record for the SEC. When white-collar attorney Mary Jo White was confirmed as the new SEC chair in April, transparency advocates hoped she would take action on the issue.

Over the weekend, those hopes were dashed. The Washington Post reported on Saturday that White's SEC has dropped corporate disclosure from its 2014 to-do list:

Missing from the Security and Exchange Commission's list of regulatory priorities for the coming year is any plan to consider whether public companies should disclose their political spending, a setback for investor advocates who rallied behind the cause.

Last year around this time, when the SEC released its 2013 to-do list, it signaled that it might consider formally proposing a rule to require the spending disclosures. But the item slipped off the 2014 agenda released this past week without any formal explanation.

Supporters of the disclosure petition couldn't hide their disappointment at White's decision to sideline the issue:

"[White] obviously did not really recognize the significance of this," said Bruce Freed, president of the Center for Political Accountability, which has pioneered the push for political spending disclosures. "She is not looking at investor protection and corporate governance broadly. You do not see those as primary drivers of her agenda."

Robert J. Jackson, one of the professors involved in crafting the petition, said he has not lost hope.

The agency's new agenda is geared toward advancing proposals that are mandated by Congress, so it is not surprising that a non-mandatory initiative has dropped off the radar screen for now, he said. The agency is not precluded from acting on a matter, even if it's not on the formal agenda, according to federal statute.

"I remain hopeful that the SEC will eventually take up this rule," said Jackson, an associate professor at Columbia Law School. "I'm hopeful that when the SEC looks at the merits, they're going to decide that a rule is necessary."

In other words, corporate disclosure isn't dead at the SEC. It's just on the back burner for 2014. Certainly nothing major will happen before the 2014 midterm elections. The 2016 presidential race? Maybe. In the meantime, you can expect ongoing pressure from the advocates who churned out those hundreds of thousands of SEC comments.

Republicans—Yes, Republicans—Are Joining the Battle Against Big Money Politics

| Mon Nov. 25, 2013 7:32 AM PST
Rep. Tom Petri (R-Wisc.), the author of a new campaign finance reform bill.

After the 2012 election, the Republican National Committee published a 100-page autopsy (PDF) nobly titled the "Growth and Opportunity Project" that pointed the supposed way forward for the humbled Grand Old Party. Regarding the dark-money-driven, super-PAC-mad politics of today, the document left little doubt about the party's view: Let the money flow. The RNC called for ending the ban on "soft money" (the 1990s-era equivalent of dark money that fueled the Clinton White House scandals), raising contribution limits, removing the aggregate limit on how much overall money a donor can give in one cycle, and further deregulating money in politics at the state and federal levels.

But as the cost of winning an election increases, fundraising swallows up more of a congressman's time, and candidates scramble to acquire their own super-PACs, several House Republicans are bucking their own party and demanding real reform.

Last week, Rep. Tom Petri (R-Wisc.) introduced a bill called the Citizens Involvement in Campaigns, or CIVIC Act, with the hope of spurring more small-dollar donations to political campaigns by reviving a pair of tax incentives. Petri's bill would offer small donors two options. They could receive a tax credit of up to $200 (or up to $400 on a joint tax return) for donations made to a campaign or national political party. Or that same donor could claim a tax deduction of up to $600 (up to $1,200 for a joint return) for political donations. The intent is obvious: entice many more small donations to candidates.

When he unveiled his bill, Petri lamented both the cost of running for federal office and the growing clout of very wealthy donors in the political process. "Campaigns are becoming more and more expensive with no signs of slowing down," he said. "And most would agree that the ideal way to finance a campaign is through a broad base of donors. Unfortunately, most Americans aren't in the position to donate hundreds or thousands of dollars—but they want to get involved. We should be encouraging political participation."

Fewer than 1 in 10 Americans have ever made a political donation, polls show. And for all of President Barack Obama's success in reeling in scads of small donations (aside large contributions), politics remains dominated by big money. In last year's elections, more than 60 percent of all donations came from donors giving more than $200, according to the Center for Responsive Politics. As for super-PACs and nonprofits, well, those are the playgrounds of millionaires and billionaires on both sides of the aisle.

Another House Republican, Rep. Andy Harris (R-Md.), recently introduced a bill of his own aiming to reform another cash-crazy part of congressional politics: so-called leadership PACs. Leadership PACs are different from your typical campaign committee. Instead of raising money for a politician's own reelection bid, leadership PACs, which sprung up in the 1990s, allow members to raise money for distributing to their colleagues' reelection campaigns. By spreading money around to your pals, a lawmaker can earn some goodwill and climb the ranks within his or her own party. Thanks to a loophole in the law, however, lawmakers often use their leadership PACs to pay for golf outings, tickets to NFL games, and other swanky junkets that politicians can't pay for with their traditional campaign war chest.

Harris' bill would close that loophole. "Public opinion of Congress is already low enough," he said. "By banning the personal use of political committee funds, we can help improve the public trust in Congress."

Let's face it: In the Republican-controlled House, these bills stand little chance of passage. (The slew of Democrat-introduced reform bills, which tend to be more extensive and comprehensive, are also doomed.) Yet the fact that Republicans are joining the reform effort matters. In the past, when campaign spending has spiraled out of control and resulted in headline-grabbing political scandals, Congress' instinct has been to look for the reforms already on the table and to pass one or some of those reforms in the scandal's aftermath. And if the bills have a bipartisan imprimatur, all the better.

So Petri's and Harris' proposals may be DOA. But should another money-and-politics scandal strike, these bills will be ready to go—and they'll have Democrats and Republicans ready to jump onboard.

FEC: We Won't Treat Tea Partiers Like Jim Crow-Era NAACP Supporters

| Thu Nov. 21, 2013 1:19 PM PST

By a 3-2 vote, the Federal Election Commission on Thursday rejected a national tea party group's request to stop disclosing its donors under an exemption that originated with protections given to the NAACP and its members who faced violence during the Jim Crow era. 

Here's the background: The Tea Party Leadership Fund is a year-and-a-half old political outfit that has received $2.5 million in donations from some 600 contributors. The Fund makes independent expenditures and also contributes directly to candidates, including Sens. Ted Cruz (R-Texas) and Rand Paul (R-Ky.) and Reps. Paul Broun (R-Ga.) and Steve Gaines (R-Mont.). Earlier this year, the Fund handed the FEC 1,400 pages of what it said was evidence of "harassment, threats, and reprisals" against the group and its donors. Citing all that evidence, the group asked the FEC for an exemption so that it no longer had to disclose its donors and other vital campaign finance information.

This exemption has been granted only rarely by the FEC: The most prominent recipient is the Socialist Workers Party, which has received this exemption for several decades after showing considerable evidence of threats and harassment of their supporters. (The NAACP's exemption was granted by the Supreme Court in 1958, which set a precedent for future exemptions.)

The decision over whether to give the Tea Party Leadership Fund the same exemption has been closely watched by campaign finance advocates and election lawyers. Some feared granting the exemption could set a precedent allowing many other political committees who felt harassed to get the same treatment, gradually eroding the nation's disclosure laws. "If the FEC allows it, it's a very slippery slope of this group and that group and this group all getting exemptions, too," says one Democratic campaign finance lawyer.

Opponents of the Tea Party Leadership Fund's request also argued that what the group considered harassment was far less severe than what the NAACP and Socialist Workers Party faced. "This tea party group comparing itself to the NAACP of old, whose membership feared for its lives and its livelihoods, would fail the laugh test if their request was not so offensive and so outrageous on its face," Paul S. Ryan, a lawyer with the Campaign Legal Center, said on Wednesday.

At Thursday's meeting, the FEC's commissioners split on the matter. Republicans Matthew Petersen and Caroline Hunter agreed with the tea party group, citing the scandal over the IRS' targeting of tea party groups applying for tax-exempt status. The Democrats broke the other way. Chair Ellen Weintraub quoted Supreme Court Justice Antonin Scalia's 2010 comment that "running a democracy takes a certain amount of civic courage"; tea party donors, she said, needed to show that courage. Democrat Ann Ravel, meanwhile, agreed with the Campaign Legal Center's argument that the Tea Party Leadership Fund's evidence of harassment paled in comparison to what the NAACP and Socialist Workers Party experienced.

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