Letter Opposing S. 791, Follow the Money Act of 2013
TO THE MEMBERS OF THE UNITED STATES SENATE:
The U.S. Chamber of Commerce, the world’s largest business federation representing the
interests of more than three million businesses and organizations of every size, sector, and
region, and dedicated to promoting, protecting, and defending America’s free enterprise system,
strongly opposes S. 791, the “Follow the Money Act of 2013,” which would significantly restrict
the ability of independent groups, including the business community, to exercise their First
Amendment rights and engage in political speech.
This bill raises significant constitutional concerns. S. 791 would dramatically expand
government regulation of political speech. The bill aims to shelter candidates for federal office
from the criticism of independent groups by raising considerable barriers groups’ ability to
communicate with the public about candidates’ policy positions.
To begin, the bill would attempt to regulate enormous amounts of independent political
speech by broadly defining “independent federal election related activity.” This definition,
which would trigger the bill’s registration, reporting, and disclaimer requirements, is so broadly
drafted that it would encompass the activity of groups that would be merely contemplating
speaking. Under this bill, activities such as fundraising, polling, and message testing could
trigger the disclosure of a group’s funding, regardless of whether the group actually engages in
future political speech. As a result, S. 791 would require disclosure even before a group speaks.
There is no government interest sufficient to justify disclosure of these types of pre-speech
activities.
Further, the bill’s reporting and disclaimer requirements are exceptionally onerous.
Under S. 791, covered entities would essentially be required to instantly disclose all
contributions, which for large organizations with many donors would almost certainly mean
daily reporting. The disclaimer requirements of the bill would be equally burdensome, forcing a
group’s political message to be further diluted by government mandated speech, such as the
entity’s Federal Election Commission nine digit registration number and the top three funders of
the group, whether those funders even agree with the advertisement or had knowledge of it.
Additionally, the bill’s broad definition of federal election-related activity and covered
contributions would require the disclosure of non-political membership dues and contributions
paid to trade associations. If a trade association were to sponsor any aggregate federal election
activity worth $10,000 or more during an election cycle, the association would have to report its
funding, including membership dues, regardless of whether the donations were made with the
intent to fund the election activity. The bill would also fail to contain an exemption for member
communications, making it likely that membership newsletters, emails, and phone calls
mentioning an elected official would trigger the bill’s registration and reporting requirements.
While the bill does contain provisions that purport to protect disclosed donors from retaliation,
the protections would be illusory and would provide no real comfort for those wishing to
exercise their First Amendment rights.
The bill also favors labor unions over business interests. This bill incorporates a “safe
harbor” account that would shield an organization from disclosure if the account is amassed
entirely from “contributions or dues” of $1,000 or less per donor, per election cycle. This
provision would favor unions because of their unique, pyramid-style fundraising model built on
mandatory, relatively low-dollar dues of millions of members. As a result, the business
community would be subject to burdensome speech-chilling disclosure requirements, while labor
unions would be effectively exempt.
Finally, the bill would inappropriately anoint the Internal Revenue Service (IRS) as a new
political speech regulator. The bill’s broad definitions would create an uncertain enforcement
environment for independent groups who wish to exercise their First Amendment rights. The
IRS, an agency with no campaign finance expertise, would be granted the authority to levy stiff
tax penalties and strip non-profit status from groups that violate, even unintentionally, the bill’s
provisions. Furthermore, the bill’s broad definitions would be vulnerable to the subjective
interpretation of politically motivated officials.
The Chamber strongly opposes S. 791. The bill is founded on both bad policy and bad
principles. It is drafted in such a way to silence the voices of independent groups, including the
business community, through unjustifiable restrictions on speech and burdensome reporting and
disclaimer requirements. Accordingly, the Chamber urges you to oppose this legislation.
Sincerely,
R. Bruce Josten
