Today the Senate returns to session having not yet addressed Senator Chuck Schumer’s troubling legislation, the Democracy is Strengthened by Casting Light on Spending in Elections Act (“DISCLOSE Act”). Senator Schumer sought and failed to pass the DISCLOSE Act - a bill that would restrict the First Amendment rights of Americans – by the Fourth of July, the day on which we celebrate our nation’s independence.
The DISCLOSE Act is a desperate attempt to influence the November elections, and minimize Democrat losses. Senator Schumer and the legislation’s other sponsors aim to have a law on the books that will take effect prior to November regardless of whether a regulatory system is in place to enforce the burdensome new reporting requirements. The Act, its reporting burdens, and penalties are set to take effect 30 days after it has been signed by President Obama.
- The DISCLOSE Act will require small businesses, corporations, and non-profit organizations to electronically file burdensome financial disclosure reports within 24 hours of making an independent expenditure. Without action by the FEC, these groups will have to electronically file a form that does not yet exist, and face a $10,000 penalty should their filing be found inadequate.
- Radically expand the length of disclaimers on televised political advertisements. The Act will compel the head of an organization to appear on screen in a “stand by your ad” disclaimer. The top donor to an organization will also have to appear on camera to stand by the ad. The names of additional top donors to the organization must be listed on screen for a period of six seconds. These disclaimers will be the end of the 30 second advertisement, because over half of the time will be devoted to disclaimers.
- Companies with as little as 20% foreign ownership will be prohibited from engaging in political speech under the DISCLOSE Act. Verizon Wireless is a Delaware corporation with over 83,000 employees in the United States. It has over 90 million customers in the United States, but because of a minority ownership by Vodafone, would be prohibited from speaking under the DISCLOSE Act. On the other hand, unions with extensive foreign membership, such as the Service Employees International Union, are not subject to a similar foreign prohibition.
- In an unprecedented step, the DISCLOSE Act will expand what political speech is regulated. The DISCLOSE Act will drastically expand the definition of “electioneering communication” doubling the time period that speech is regulated. It will also expand what speech is regulated, shifting from a bright line express advocacy test to a more subjective “functional equivalent” test.
The Democrats in the House of Representatives managed to pass a version of the DISCLOSE Act before the Fourth of July recess. Senate Democrats have been unable to move their bill forward and are being remarkably tight-lipped regarding their plans to advance the bill. Senator Schumer and Senator Harry Reid will probably take drastic action to force a floor vote on the DISCLOSE Act. We must stay focused and ensure that they do not abridge First Amendment rights during this brief summer session.