Disclosure and Corruption Revisited

The Conversation
November 19, 2010

Thanks to all the commentators for taking the time to read and react to my proposal. As John and I mostly agree on this issue, and since Nikki Willoughby chose to ignore my arguments on the merits, I will pick on my good friend and colleague Richard Hasen. First, as to the timing of my ideas, there is nothing “odd” about urging new ways to think about disclosure given that the DISCLOSE Act will have to be substantially altered if it is going to have even a remote chance of passing in the newly reconstructed Congress. Richard characterizes my argument as looking for “less disclosure” when what is needed is “more,” but that is both imprecise and revealing at the same time. It is imprecise because I argue for fuller, timelier reporting to the FEC (including nonprofits doing electioneering ads), but for semi-disclosure of donor identity to enhance free speech protections: in short, it is both more and less. His remark is revealing because it reflects a belief (widespread in the election law community) that disclosure is the last tool left in the regulatory box to fix the soft money leak caused by both past and recent Supreme Court decisions.

Richard chose to ignore my arguments about why the battle against soft money is both futile and debatable on the merits. As he well knows, the constitutional path to independent spending was forged in Buckley v. Valeo, and many of us predicted that the parties would turn to outside groups when McCain-Feingold was adopted. In essence, Richard defends a politically inefficient hard money system that places large amounts of unneeded funds in the hands of risk averse incumbents who spend too much time raising money due to contribution limits rather than a system that allows political parties and affiliated groups to raise money more easily and spend it more strategically in the districts where it can do the most good. I have a hard time believing that the system he defends is any less corrupting than the soft money world I favor. In any event, there is no clear empirical evidence on this point.

On the matter of semi-disclosure, let me address a few objections. First, both Richard and John worry about aggregate categories. I certainly agree that political people would love categories like “greedy capitalist pig,” “selfish government workers,” or, more likely, subtler slants. But I would use the census or other standard government occupation categories. I do not see that an individual’s union membership adds much important information but whether a political committee is union affiliated does. If I am wrong, then add union membership. John believes that people should be making voting decisions based on more substantive information, and I agree, but many don’t, and I don’t want to make a paternalistic judgment about how voters should make up their minds.

Richard also thinks that revealing identity is an important anti-corruption tool. Where is the evidence of this? In the last election cycle the Kochs and the Tea Party groups were not looking for a particular governmental action that would make them a profit: they were looking to change government philosophy which might in the long run allow them to keep more of their income or profits. Not exactly altruistic to be sure, but is it corrupt?

At a deeper level, Richard, I believe, implicitly disputes the Supreme Court’s long held distinction between the corruption potential of independent expenditures versus contributions to candidates. How does electioneering corrupt if the Court says that independent expenditures cannot do so? And what is the line of reasoning that leads to quid pro quo corruption when electioneering speaks broadly of policy and not a tax break or subsidy for company x?

As for enforcement, what is it that we are enforcing? There can be no limits on independent expenditures. If we move to full reporting, there might be reporting violations, but it is pretty hard to hide the fact that you made a big buy in a highly visible race. The candidate who is attacked will know that he or she is being attacked and can report this to the FEC if they believe that the other side has not complied with reporting rules?

Professor Hasen denies it, and perhaps my generalization does not apply to him, but I believe that the true agenda is to prevent distortion (i.e. speech inequality based on unequal resources) using disclaimer and disclosure to discourage First Amendment activity. Since speech equality is not a recognized state purpose, the debate has been recast as preventing corruption, but it makes no sense when you examine the argument closely since limited contributions to candidates and unlimited independent expenditures by Supreme Court definition cannot corrupt.

Against all the uncertain gains in preventing corruption and helping enforcement, there is a growing potential to undermine basic individual political rights. Semi-disclosure better preserves individual autonomy with little or no harm to enforcement and anti-corruption goals.

Also from This Issue

Lead Essay

  • Shade from the Glare: The Case for Semi-Disclosure by Bruce Cain

    Bruce Cain’s lead essay calls for a compromise on campaign finance disclosure. We want many things from our election law, he notes – the freedom to speak, a process that both is and appears to be just, a well-informed electorate, and protection for the holders of controversial opinions. Cain suggests semi-disclosure as a good way to get most of what we want. He advocates “the full reporting but only partial disclosure of campaign donor information.” Semi-disclosure of the type Cain suggests is already used in the release of census data, where individual privacy is respected even while demographers gain valuable information from the aggregate. Giving voters information about campaign contributions without giving them donors’ names would allow voters to consider the nature of a candidate’s or a measure’s supporters while shielding those supporters from personal attack, Cain argues.

Response Essays

  • The Costs of Mandating Disclosure by John Samples

    In his response essay, John Samples notes that disclosure discourages people from participating in the political process. When someone decides not to do something, that decision is all but invisible to researchers who might wish to study it. Disclosure also shifts attention from the content of speech to the identity of the speaker, which is not necessarily the best basis for decisionmaking. The paternalism of disclosure is also a problem, as he sees it: the government appears to be trying to keep you from hurting yourself, even if you decline to fulfill your responsibilities as a citizen by examining the issues on their merits.

  • DISCLOSE Act Is an Opening, Not a Barrier by Nikki Willoughby

    In her response essay, Nikki Willoughby argues that anyone who opposes full disclosure of donors’ identities probably has something to hide. Spending money isn’t speech; it’s a commercial transaction, and thus regulable under our law. Moreover, even if campaign finance were a matter of speech, some speech always has been subject to regulation, including slander, libel, and speech that incites imminent acts of violence. We should likewise regulate speech that imminently threatens our democracy, by mandating that sources of such speech are disclosed. Secrecy destroys trust in government, driving citizens away from political participation. Openness wouldn’t chill participation – openness would encourage it.

  • A Semi-Objection to Bruce Cain’s Semi-Case for Semi-Disclosure by Richard Hasen

    Richard Hasen offers some objections to Cain’s case for semi-disclosure. Cain’s plan doesn’t seem to appreciate sufficiently the benefits of disclosure; whereas public disclosure and analysis by independent watchdog groups can provide fairly sophisticated monitoring of campaign finance data, we shouldn’t expect the government to provide all the details about patterns of campaign contributions that we might desire. Further, he finds little benefit to demographic data about campaign finance shorn of names and public identities of major contributors.

The Conversation