Court ruling could undermine U.S. Chamber, Koch brothers' penchant for campaign-spending secrecy

By Troy Hooper
Real AspenApril 3, 2012
A court ruling in Washington, D.C., on Friday evening may put a stop to the epidemic of secret donors who bankroll political groups that now fill the airwaves with vague and often specious election campaign ads.

In a 31-page ruling (pdf), U.S. District Judge Amy B. Jackson concluded the Federal Election Commission overreached its authority in 2007 when it began allowing corporations and nonprofits to conceal the identities behind groups that fund “electioneering communications," or advertisements that don't expressly advocate for or against a political candidate running for federal office.

“This is good news for our democracy and for voters," plaintiff U.S. Rep. Chris Van Hollen, D-Maryland, said in a prepared statement. Van Hollen filed the lawsuit in April 2011. "This victory will compel the FEC to require enhanced disclosures of the funders of campaign-related advertisements."

The ruling could deal a blow to non-profits such as Americans for Prosperity and the American Energy Alliance that are linked to the Koch brothers, a pair of conservative billionaire oil tycoons who advocate for the dismantling of public education and the evisceration of environmental laws as we know them.
Charles and David Koch

Another group Jackson's ruling might impact is the U.S. Chamber of Commerce, which in last year's midterm election engineered one of the largest ad campaigns using secret corporate money. Ever since Thomas Donohue took the reins in 1997, the U.S. Chamber has been part of the Republican election machine. The group's aggressive politicking has caused smaller chambers to drop their memberships. In Colorado, there are calls for the Aspen Chamber Resort Association to end its affiliation with the U.S. Chamber because the national group lobbies against climate legislation.

President Obama has considered issuing an executive order to require all would-be federal contractors to disclose direct and indirect political spending of more than $5,000. Bruce Josten, a lobbyist for the U.S. Chamber, blasted the president in the New York Times, saying his business bloc “is not going to tolerate” any White House attempt to stop anonymous corporate spending.

But the U.S. Chamber, the Koch brothers and the Karl Rove-backed Crossroads GPS, which has spent millions of dollars running anti-Democrat ads this election cycle, must listen to the courts.

University of California-Irvine law professor Rick Hasen said it is unclear what might happen next. He laid out the following possibilities (noting there could be more) on his widely read Election Law Blog:

1. The FEC will appeal, and the appellate court will reverse.
2. The FEC does not appeal, and tries very quickly to get new regulations out.
3. The FEC does not appeal, and gets no new regulations out, leading to questions, and possibly a request for an advisory opinion on what these groups must now disclose as to their contributors. The FEC could well deadlock on this question.
4. Groups will ignore the language of the statute, and reform groups will file complaints at the FEC against them for failing to disclose their contributors.
5. Someone will file a new suit in federal court claiming that the statute, as now construed by the court, violates the First Amendment speech and associational rights of contributors to these organizations.

Ken Gordon, former Senate majority leader in Colorado and current director of, said complaints can now be filed with the FEC requesting the source of funds for political ads.

“But the problem is the FEC has been hopelessly deadlocked on doing anything of substance because there are three Democrats and three Republicans on its six-person board,” he noted.

Still, Gordon said the ruling is a move in the right direction.

“I'm pleased with this decision and I hope it stands up in the federal appeals process,” he said. “The Supreme Court has always upheld disclosure rules so it may get a friendly ruling there.”

The FEC rules in 2007 essentially upended part of the Bipartisan Campaign Reform Act of 2002. Then in 2010, the U.S. Supreme Court's landmark ruling in Citizens United v. Federal Election Commission opened the floodgates for political ads that are secretly funded by corporations and interest groups.

According to the Center for Responsive Politics, the percentage of outside undisclosed spending in U.S. elections spiked from 1 percent in 2006 to 43.8 percent in 2010.

"The FEC must get new rules in place promptly to ensure that outside spenders making electioneering communications disclose the donors funding these campaign-related expenditures,” said Fred Wertheimer, president of campaign finance watchdog group Democracy 21, which backed Van Hollen.

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