Court ruling means shadowy campaign groups may have to disclose donors

On Monday, a three-judge panel of the U.S. Court of Appeals for the D.C. circuit ruled to uphold an order for shadowy campaign groups like Karl Rove's Crossroads GPS to disclose their donors if they are producing federal campaign ads, or what's known to the FEC as "electioneering communications," said a report at Huffington Post.  Voting 2-1, the panel struck down a request for a stay on that order, which was handed down in April by a district court judge whose aim was to close a campaign finance loophole that has allowed outside spending to run amok in this election cycle.

Rep. Chris van Hollen (D-MD) originally filed the lawsuit to compel the groups to reveal their sources of funding.  His attorney, Democracy 21 President Fred Wertheimer, said, "This case represents the first major breakthrough in the effort to restore for the public the disclosure of contributors who are secretly providing massive amounts to influence federal elections."

Wertheimer, when asked whether he believes the groups will now disclose their donors, told Raw Story,"Right now, the provision is in effect and I expect people to comply."  His group's effort, he said, is part of a multi-pronged approach to hitting back against changes in election laws that decrease transparency or, like the Supreme Court's Citizens United decision, grant corporations and businesses the same rights as citizens to freely donate and participate in elections.

Secret money, wielded by groups like Rove's Crossroads, the billionaire Koch brothers-sponsored group Americans for Prosperity and pro-business advocacy group the U.S. Chamber of Commerce, has already had a big impact on the 2012 presidential race, with each of the Republican primary candidates' campaigns relying on powerful, secretive super PACs and other private organizations to craft their messaging and coordinate the production and deployment of political ads.  Reuters reports that Rove has announced that his organization plans to spend $300 million this year attempting to unseat President Barack Obama.  Just today, Crossroads GPS unveiled its new $25 million ad campaign, "Obama's Broken Promises."

The loophole in election law that has allowed this kind of unprecedented private spending is a result of a 2007 ruling by the FEC that allowed groups to keep their donors secret as long as those donors do not control of the content of a specific type of ads.  “Electioneering communications” are defined as "broadcast ads that mention a federal candidate and that are run within 60 days of a general election or 30 days of a primary."  The ruling opened a floodgate through which millions of dollars of unregulated money have poured.

According to Huffington Post, "That loophole, combined with the Supreme Court's 2010 Citizens United decision, led the percentage of undisclosed independent campaign spending to jump from 1 percent in 2006 to 43.8 percent in 2010, according to the Center for Responsive Politics."

Monday's ruling means that outside groups will no longer be able to produce these ads without revealing their donors' identities, but Wertheimer stressed in our interview that this is only one stage of the disclosure battle.  He said that Van Hollen has already filed a second lawsuit to overturn another badly flawed FEC statute relating to the disclosure of contributors who fund “independent expenditures” ads that expressly advocate the election or defeat of a candidate.

The "intervening parties" trying to block the new disclosure rulings may attempt to have the stay upheld by the Supreme Court, but the Democracy 21 president seemed to feel that the groups' chances of getting what they want were slim.  In the meantime, he wants to see the organizations reveal some names.

One group, the conservative American Future Fund, has made inquiries to the FEC as to whether it can skirt disclosure rules if it drops President Obama's name and simply refers to "the administration" or "the White House."  Wertheimer scoffed at the idea that this would constitute an exception to the April ruling.

"The FEC hasn't ruled on that, yet, but look," he said, "They may try to get around it, but the statute is in place.  We expect them to reveal their donors."