Key Vote letter on S. 3369, the "Democracy Is Strengthened by Casting Light On Spending in Elections Act of 2012" (DISCLOSE ACT)

Thursday, July 12, 2012 - 8:00pm

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 strongly opposes S. 3369, “Democracy Is Strengthened by Casting Light On Spending in Elections Act of 2012” or the “DISCLOSE Act of 2012” which would violate critically important First Amendment free speech protections. The Chamber will include votes on, or in relation to, this legislation in our annual How They Voted scorecard—including votes on the motion to proceed.

S. 3369, like previous iterations from earlier this year as well as from the 111th Congress, would effectively exempt labor unions from its reach while chilling the political speech of the business community and others engaged in the political process. The DISCLOSE Act of 2012 is blatantly political and ultimately unconstitutional legislation that detracts from much more significant efforts to solve challenges confronting America.

Political speech by corporations is protected by the First Amendment. The Supreme Court recognized that right not only in its Citizens United v. Federal Elections Commission decision, but also in several earlier decisions. In addition, First Amendment rights are at their height when the speaker is addressing matters of public policy, politics, and governance. As the 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). Furthermore, 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.

This legislation would impose exceptional burdens on the speech of corporations and business interests based on their identity as corporations and their presumed hostility to the political objectives of those supporting this legislation. As the Supreme Court held in Citizens United, “the First Amendment generally prohibits the suppression of political speech based on the speaker’s identity.” Citizens United v. FEC, 130 S. Ct. 876, 905 (2010). The crafting of the bill and many of the statements of the sponsors and supporters of the DISCLOSE Act of 2012 show that the true purpose of the legislation is to squelch the constitutionally protected speech of the business community and their trade associations – a clearly impermissible intent. In the press release trumpeting the introduction of this year’s earlier version of the DISCLOSE Act of 2012, Sen. Schumer and Sen. Leahy acknowledged that the legislation is aimed primarily at corporate speech. Similar arguments and statements have been made by other supporters of the legislation, in and out of Congress.

While the bill purports to be even-handed in its treatment of labor unions, corporations, and business associations, the reality is far different––the bill is a clever masquerade designed to place significantly more burdens on businesses. There are two significant provisions that protect both local unions and large “international” unions from the legislation’s required disclosure.

First, the DISCLOSE Act of 2012 would require an organization that engages in political conduct to disclose payments received that exceed $10,000 in a two-year election cycle. As such, local union chapters would not have to disclose the payments of individual union members to the union, even if those funds are used for political purposes.

Second, the bill exempts from its disclosure requirements transfers from affiliates that do not exceed $50,000 for a two-year election cycle. Therefore, an international union would not have to disclose the transfers received by local chapters. These two provisions ensure that unions would not be greatly impacted by this legislation, while business associations (which do not have a ground-up fundraising funneling structure built on the mandatory dues of millions of members) would be directly subject to them.

Additionally, corporate members of many business associations might provide membership contributions in excess of $10,000 over a two-year period, triggering this bill’s disclosure provisions–a situation unparalleled in the union organizational structure. Similarly, most business associations do not have a vast network of local affiliates from which they can draw up to $50,000 in exempted transfers.

Finally, the DISCLOSE Act of 2012 is designed unconstitutionally to encourage retaliation against certain speakers who have unpopular or unfavorable political views by requiring groups to disclose the names and addresses of their donors. The First Amendment does not permit the government to require membership disclosure if there is a “reasonable probability” that the donors will be subject to “threats, harassment, or reprisals.” Doe v. Reed, 561 U.S. _, 130 S. Ct. 2811, 2820- 21 (2010) (quoting Buckley v. Valeo, 424 U.S. 1, 74 (1976) (per curiam)); see also NAACP v. Alabama ex rel. Patterson, 357 U.S. 449 (1958). Numerous statements by supporters of the DISCLOSE Act of 2012 (in and out of Congress) have made it abundantly clear that they are seeking disclosure as a means to accomplish just that sort of impermissible retaliation against speakers with whom they disagree.

The clear purpose of S. 3369 is to upend political speech protections at the core of the First Amendment. These rights are too important to the foundation of American democracy to be infringed. The Chamber strongly urges you to oppose S. 3369 and to vote against this legislation as well as any effort to bring it to the Senate floor. The Chamber will include votes on, or in relation to, this issue—including votes on the motion to proceed—in our annual How They Voted scorecard.

Sincerely,
R. Bruce Josten