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Campaign Finance Onus Placed on Agencies

Democrats on Capitol Hill have called for hearings and legislation to rein in unrestricted campaign money, but the real action is at a handful of federal agencies being bombarded with letters from lawmakers, lobbyists and activists.

The shift in focus to agencies such as the Federal Communications Commission, the Securities and Exchange Commission and the IRS — not the typical locus of political money fights — reflects a tacit acknowledgement that campaign finance legislation is going nowhere on Capitol Hill.

“With the current status quo in the Senate, it is very difficult to move on this issue,” said Julie Edwards, a spokeswoman for Sen. Jeff Merkley. The Oregon Democrat joined with seven other Senators in a letter last week urging FCC Chairman Julius Genachowski to act on proposed rules that would require TV broadcasters to shift from paper to online disclosure reports for campaign ad buys.

Merkley is one of a half-dozen Democrats meeting regularly on a Senate campaign finance task force appointed by Rules and Administration Chairman Charles Schumer (N.Y.) and chaired by Sen. Sheldon Whitehouse (R.I.).

Democratic Sens. Michael Bennet (Colo.) and Jeanne Shaheen (N.H.), also task force members, spearheaded letters to the IRS and the FEC earlier this month. In January, Sen. Bob Menendez (N.J.) rounded up more than a dozen signatures from fellow Senate Democrats to the SEC. The Supreme Court’s 2010 ruling to deregulate political money has spurred Democrats into action, raising the issue’s visibility and sparking a recent wave of big GOP fundraising.

The letters call on agency heads to take up new regulations that would curb political spending from a variety of angles. These include better enforcement of IRS rules that limit campaign activity by tax-
exempt groups, writing new FEC rules to improve disclosure for super PACs and SEC rules to require corporations to disclose their political spending to shareholders.

The FCC is expected to act as early as March on a proposed rule that would replace the decades-old, paper-based filing system for public disclosures by TV broadcasters with standardized, online reporting.

Public interest advocates have long argued that the broadcasters’ “public-inspection file,” which includes details about the size and timing of political ads, should be available online. At the moment, broadcasters around the country are required only to keep paper records, which must be accessed by visiting the individual TV station in person.

“With campaign season in full swing and new super PACs springing up weekly, the public must have access to information about who is funding these ads,” Merkley and other Senators wrote in last week’s letter to the FCC.

Broadcasters have lobbied aggressively against the proposal, arguing that it would impose substantial new cost and administrative burdens on stations and give competitors access to proprietary information.

“The irony and the disappointing thing to us is: Our biggest competitor, which is cable operators, are not subject to these new rules,” said Dennis Wharton, executive vice president for media relations at the National Association of Broadcasters. “So one question is: Why just broadcasters? Why not others?”

Lobbying for the rules is the Public Interest Public Airwaves Coalition, an umbrella group that includes the Campaign Legal Center, Free Press and the Media Access Project, among others.

“They say that it will be burdensome and onerous, to which we say: This will be the first time in history that digitizing records is seen as creating more, rather than less, cost,” said Andrew Jay Schwartzman, senior vice president and policy director for the Media Access Project.

At the SEC, commissioner Luis Aguilar signaled interest last week in taking up the issue of corporate political disclosure, stating at a Feb. 24 conference that “investors are not receiving adequate disclosure, and as the investor’s advocate, the commission should act swiftly to rectify the situation.”

A petition for rulemaking submitted last August by a coalition of 10 prominent academics calls on the agency to require corporations to disclose political expenditures to shareholders and has generated close to 65,000 public comments, which, if not a record, is soon to be one.

It’s an echo of the hundreds of public comments that flooded the FEC late last year when comedian and TV show host Stephen Colbert, who runs his own spoof super PAC, urged viewers to oppose a proposed rule that would have made it easier for super PACs to coordinate with candidates in producing campaign ads. The agency deadlocked on the issue.

“We think the SEC has complete authority to promulgate rules around disclosure of publicly traded companies,” said Lisa Gilbert, deputy director of Congress Watch at Public Citizen, which has helped organize a Corporate Reform Coalition to push for shareholder disclosure. “It’s within their jurisdiction.”

Reform advocates are still moving forward with legislation. House Democrats have introduced a disclosure bill aimed at strengthening public reporting rules for super PACs and politically active nonprofit groups.  But they acknowledge that they’ve failed to round up a single GOP ally as of yet.

And even regulatory fixes could prove elusive. The IRS, for one, has long proved loath to involve itself in fights over regulating political activity, noted David Keating, president of the Center for Competitive Politics, which promotes free speech and political deregulation. If anything, Keating said, campaign finance changes are likely to move in the direction of less regulation, not more.

“I sense growing frustration among candidates and political leaders,” Keating said. “They are not controlling the message as much as they like.”

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