Key Vote Letter Opposing the Motion to Reconsider the Vote on the Motion to Proceed and Any Vote Relating to Passage of S. 3628, the "Democracy Is Strengthened by Casting Light on Spending in Elections Act (DISCLOSE Act)"

Tuesday, September 21, 2010 - 8:00pm


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, strongly opposes S. 3628, the “Democracy Is Strengthened by Casting Light on Spending in Elections Act (DISCLOSE Act),” which the Senate may attempt to take up this week. The Senate should reject this legislation, because it would violate free speech protections embodied in the First Amendment. The Chamber will include Senate votes on this legislation in our annual How They Voted scorecard—including votes on the motion to reconsider the vote on the motion to proceed.

Although supporters of the DISCLOSE Act have argued that modifications in S. 3628 would address the problematic provisions of H.R. 5175, they do not. S. 3628 includes most of the “eleventh-hour” modifications made by the House in order to appease certain groups, and certain other “window dressing” changes. As a result, S. 3628 is more objectionable than the original Senate version.

S. 3628 is an assault on First Amendment rights: Political speech by corporations is protected by the First Amendment. The Supreme Court recognized that right not only in its Citizens United v. Federal Election Commission decision, but in several earlier decisions. Moreover, First Amendment freedoms are at their height when the speaker is addressing matters of public policy, politics, and governance. As the Supreme Court has emphasized, the First Amendment “‘has its fullest and most urgent application’ to speech uttered during a campaign for political office.” Eu v. San Francisco County Democratic Central Comm., 489 U.S. 214, 223 (1989). In addition, the Supreme Court repeatedly has recognized that voluntary associations are vital participants in the public debate and that government attempts to curb participation in associations in order to stifle their voice in the public debate violate the First Amendment.

The publicly announced intent of the bill’s authors, however, is to squelch this constitutionally protected speech and to try to hobble certain associations that give voice to their members’ views in the political process. Sen. Schumer, the sponsor of the Senate DISCLOSE Act, has said such legislation “will make [corporations] think twice” before attempting to influence election outcomes, and that this “deterrent effect should not be underestimated.” Other supporters of the legislation, both on and off of Capitol Hill, have made similar arguments in support of the legislation.

There is no urgency for Congress to act: S. 3628 would purportedly address the Citizens United decision, which was handed down earlier this year. However, there is no “crisis” for which S. 3628 is a solution. More than half of the states in the U.S. do not limit election-related speech by corporations or unions, and none of those states’ political systems is in crisis. It is important to note that the “Bipartisan Campaign Reform Act of 2002” took years to craft and still was recognized by liberals and conservatives alike to pose serious constitutional concerns. Any further campaign finance legislation similarly requires careful deliberation and working across aisles—not an election-year rush to judgment such as S. 3628.

S. 3628 would target the free speech rights of the business community: S. 3628, with its overwhelming emphasis on corporate speech and business associations, discriminates against specific speakers because of the content of their speech. For example, the legislation’s blanket prohibition on all election-related speech by government contractors is flatly unconstitutional and directly inconsistent with Citizens United’s holding that Congress can prohibit political speech only where it has evidence of quid pro quo corruption. There is no such evidence before Congress that supports such a blanket prohibition.

Political speech by labor unions would not be affected by the legislation: Although unions and their political action committees are together the single largest contributor to political campaigns and claim to have spent nearly $450 million in the 2008 presidential race, their political speech would effectively not be covered by S. 3628. The legislation would require corporations and labor unions to report donors who have given $600 or more during the year. Most unions would not be required to disclose their donors even when they spend millions of dollars on political advertising because an average union member pays annual dues far beneath the $600 threshold.

The restrictions on political participation by government contractors are effectively inapplicable to unions. The legislation would prohibit many government contractors from making any independent expenditures or funding any electioneering communications if the contractor has a government contract valued at $10 million. Although a number of unions hold government contracts, few—if any—hold contracts that reach that amount. That threshold would largely exempt unions from the government-contactor prohibition. Last year for the first time ever there were more union workers in the public sector (federal, state, and local government) than in the private sector. This large union stake in government jobs means that, more than ever, unions will likely support candidates who support increasing the size of government, the hiring of more unionized government employees. Yet, despite this broad and direct monetary interest, S. 3628 aims its government-contractor restriction only at businesses.

The legislation’s prohibition on political speech by “foreign-controlled domestic corporations” is also inapplicable to unions. The bill would impose on domestic corporations the speech restrictions that now apply to foreign nationals when, for example, a foreign national owns 20 percent or more of the corporation’s voting shares. Thus, a domestic corporation that is 80 percent owned by United States citizens could lose its First Amendment right to engage in political speech. In contrast, S. 3628 would not establish a threshold of foreign membership or control that would strip an “international union” of its corresponding right to speak on political issues.

The clear purpose of S. 3628 is to upend irretrievably core First Amendment protections of political speech in the months leading up to an election. The protection of free speech rights is too important to the foundation of American democracy to be infringed. The Chamber strongly urges you to oppose S. 3628. The Chamber will include votes on, or in relation to, this issue—including votes on the motion to reconsider the vote on the motion to proceed—in our annual How They Voted scorecard.

R. Bruce Josten