The DISCLOSE Act: Overview and Analysis
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The DISCLOSE Act: Overview and Analysis
-name redactedAnalyst in American National Government
-name redactedLegislative Attorney
-name redactedLegislative Attorney
July 26, 2010
Congressional Research Service
7-....
www.crs.gov
R41264
CRS Report for Congress
Prepared for Members and Committees of Congress
The DISCLOSE Act: Overview and Analysis
Summary
As it has periodically for decades, Congress is again considering how or whether to regulate
campaign financing. The latest iteration of the debate over which kinds of groups should be
permitted to spend funds on political advertisements, and how so, was renewed on January 21,
2010, when the Supreme Court of the United States issued its decision in Citizens United v.
Federal Election Commission. Following Citizens United, corporations and labor unions may
now fund political advertisements explicitly calling for election or defeat of federal candidates—
provided that the advertisements are not coordinated with the campaign. The legislative response
receiving the most attention to date—and the emphasis of this report—is the DISCLOSE
(“Democracy is Strengthened by Casting Light on Spending in Elections”) Act. The House
measure, H.R. 5175, sponsored by Representative Van Hollen, was reported, as amended, by the
Committee on House Administration on May 25, 2010. The House of Representatives passed the
bill, with additional amendments, on June 24, 2010, by a 219-206 vote. Senator Schumer’s
companion legislation that was first introduced in the Senate, S. 3295, is generally similar to the
bill passed by the House. The same is true for S. 3628, a second measure—apparently intended to
supersede S. 3295—that Senator Schumer introduced on July 21, 2010. There are, however, some
important differences across the three bills, as discussed in this report.
The bills appear to be aimed primarily at non-campaign actors, particularly corporations, unions,
and tax-exempt organizations. The bills propose a combination of disclosure provisions and
disclaimer provisions (which are sponsorship information included within a communication) that
would apply to these entities and are designed to give regulators and the public additional
information about political advertising that could emerge following Citizens United. The
legislation also prohibits certain government contractors, foreign-controlled or owned
corporations (including some U.S. subsidiaries of foreign corporations), and prospective
recipients of Temporary Asset Relief Program (TARP) funds from making certain political
expenditures.
The bills do not increase contribution limits for candidate campaigns; they also generally do not
address other political committees—parties and PACs. A notable exception would permit parties
to make additional coordinated expenditures supporting their candidates. This is the only instance
in which the bills explicitly allow for more political spending than would be possible under the
status quo.
This report provides an overview and analysis of (1) major policy issues addressed in the
DISCLOSE Act, which responds to Citizens United; (2) major provisions of H.R. 5175, as passed
by the House, and S. 3295 and S. 3628 as introduced in the Senate, versus current federal law;
and (3) issues for congressional consideration and potential implications of enacting or not
enacting the DISCLOSE Act.
The report will be updated as events warrant.
Congressional Research Service
The DISCLOSE Act: Overview and Analysis
Contents
Introduction ................................................................................................................................1
Evolution of Policy and Legal Issues...........................................................................................2
Citizens United v. Federal Election Commission..........................................................................3
Congressional Response..............................................................................................................4
Legislative Action on the DISCLOSE Act Thus Far.....................................................................5
Comparing the House and Senate Bills..................................................................................6
Provisions in H.R. 5175 as Passed by the House, S. 3295 as Introduced, and S.
3628 as Introduced.......................................................................................................6
Differences Between the House-Passed and Senate-Introduced Measures ........................7
Potential Implications and Considerations for Congress...............................................................8
General Considerations .........................................................................................................8
Maintaining the Status Quo ...................................................................................................9
Modifying the Definitions of Independent Expenditures and Electioneering
Communications .............................................................................................................. 10
Entities Covered by the Disclosure and Disclaimer Provisions............................................. 10
Prohibitions on Making Contributions or Spending in Elections .......................................... 11
Government Contracts .................................................................................................. 11
TARP Recipients and Outer Continental Shelf Lessees .................................................. 12
Foreign Nationals.......................................................................................................... 12
Coordinated Party Expenditures .......................................................................................... 13
Potential Effects of Disclosure and Disclaimer Provisions ................................................... 13
Campaign-Related Activity Accounts .................................................................................. 14
Potential Implementation Concerns ..................................................................................... 14
Conclusion................................................................................................................................ 15
Tables
Table 1. Comparison of Major Provisions of H.R. 5175, S. 3628, and S. 3295 with
Current Federal Law .............................................................................................................. 16
Contacts
Author Contact Information ...................................................................................................... 38
Acknowledgments .................................................................................................................... 38
Congressional Research Service
The DISCLOSE Act: Overview and Analysis
Introduction
Political information—particularly political advertising—has been at the heart of American
campaigns and elections for more than a century. Throughout the last century, candidates, parties,
and interest groups have competed to make their case to voters in the hopes of winning elections
and shaping policy debates. At the same time, Congress, regulatory agencies, and the courts have
wrestled with how much, and what kind, of information should be available to the public about
the sources of those political messages. Questions have also emerged about whether certain
actors, such as corporations and unions, should be permitted to participate in elections and other
political debates to the same extent as voters. Modern campaign finance policy and law, which
emerged in the 1970s, but which built on reforms first pursued in the early 1900s, has responded
with a combination of provisions designed to restrict the amounts and sources of funds in federal
elections on one hand, and documenting the sources and amounts of funds that are permitted on
the other. 1
Political advertising has both enabled the public to become more informed about campaigns and
policy contests, and, perhaps, made it more challenging for the electorate and policymakers to
keep track of the various players and issues involved in political debates. This has been
particularly true since the 1960s, when broadcast political advertising first became prominent,
political professionals began to specialize in media production, and the electorate increasingly
turned to television for information.2
The latest iteration of the debate over which corporations, unions, and other groups should be
permitted to spend funds on political ads, and how so, was renewed on January 21, 2010, when
the U.S. Supreme Court issued its highly anticipated decision in Citizens United v. Federal
Election Commission (FEC).3 The DISCLOSE Act, “Democracy is Strengthened by Casting
Light on Spending in Elections,” which the Committee on House Administration reported, as
amended, on May 25, 2010, is the most prominent legislative response to Citizens United to date.
As with the case itself, the DISCLOSE Act is particularly relevant for the ongoing policy debate
surrounding political advertising and its transparency.
This report is designed to provide an overview and analysis of (1) major policy issues addressed
in Citizens United and the DISCLOSE Act; (2) major provisions of H.R. 5175, S. 3295, and S.
3628 compared with current federal campaign finance law, as shown in Table 1 at the end of this
report; and (3) selected issues for congressional consideration and potential implications of
enacting or not enacting the DISCLOSE Act. Legislative developments surrounding the
DISCLOSE Act have generally unfolded quickly since the House and Senate bills were
1
On the development of federal campaign finance policy and law, see, for example, Kurt Hohenstein, Coining
Corruption: The Making of the American Campaign Finance System (DeKalb, IL: Northern Illinois University Press,
2007); Robert E. Mutch, Campaigns, Congress, and Courts: The Making of Federal Campaign Finance Law (New
York: Praeger, 1988); Raymond J. La Raja, Small Change: Money, Political Parties, and Campaign Finance Reform
(Ann Arbor, MI: University of Michigan Press, 2008); and John Samples, The Fallacy of Campaign Finance Reform
(Chicago: University of Chicago Press, 2006).
2
See, for example, Stephen Ansolabehere, Roy Behr, and Shanto Iyengar, The Media Game: American Politics in the
Television Age (New York: Macmillan, 1993); and Crowded Airwaves: Campaign Advertising in Elections, eds. James
A. Thurber, Candice J. Nelson, and David A. Dulio (Washington: Brookings Institution Press, 2000).
3
130 S. Ct. 876 (2010).
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The DISCLOSE Act: Overview and Analysis
introduced. As such, this report will be updated periodically to reflect recent developments and
emerging issues. 4
Evolution of Policy and Legal Issues
Citizens United is significant because of its potential to change the ways in which corporations,
unions, and tax-exempt organizations participate in American elections. Although restrictions on
those actors have evolved over time, corporations, unions, and certain tax-exempt organizations
were largely banned from spending treasury funds in federal elections for decades. As a result of
Citizens United, these groups are permitted to use general treasury funds to make independent
expenditures, which are defined as communications “expressly advocating the election or defeat
of a clearly identified candidate” and that are not coordinated with any candidate or party,5 and
electioneering communications, which are defined as broadcast, cable or satellite transmissions
that refer to a clearly identified federal candidate, aired within 60 days of a general election or 30
days of a primary.6 Corporations and unions are still subject to the prohibition on using general
treasury funds to make contributions to candidates and political parties.7
The 1907 Tillman Act, 8 which is considered to be the first major federal campaign finance law,
prohibited corporations from making contributions to political parties. With the 1947 Taft-Hartley
Act, 9 Congress expanded the prohibition to include corporate contributions to both parties and
candidates, as well as expenditures in federal elections. Taft-Hartley also included labor unions in
the prohibition. The early prohibitions on corporate and labor union treasury funded contributions
and expenditures were included in the first modern federal campaign finance law, the Federal
Election Campaign Act of 1971, also known as FECA. 10 The prohibitions are codified at 2 U.S.C.
§ 441b. In an exception to the prohibition on corporate and union treasury spending, FECA
allows for the creation of separate segregated funds or political action committees, also known as
PACs. Specifically, corporations and unions can use their treasury funds to establish, operate and
solicit voluntary, limited contributions to their PACs.11 These voluntary PAC donations can then
be used to contribute to federal campaigns or to make expenditures that expressly advocate
election or defeat of federal candidates.
In the 1976 landmark Supreme Court decision, Buckley v. Valeo,12 the constitutionality of many
provisions in FECA was challenged. This case is important because it established the framework
4
This report does not provide a constitutional analysis and does not address all policy or legal factors that might be
relevant for Congress. For analysis of the constitutionality of possible legislative responses to Citizens United, see CRS
Report R41096, Legislative Options After Citizens United v. FEC: Constitutional and Legal Issues, by (name red
acted) et al. For analysis of the policy implications of various legislative options, see CRS Report R41054,
Campaign Finance Policy After Citizens United v. Federal Election Commission: Issues and Options for Congress, by
(name redacted).
5
2 U.S.C. § 431 (17).
6
2 U.S.C. § 434(f)(3).
7
2 U.S.C. § 441b(a).
8
34 Stat. 864.
9
61 Stat. 136.
10
Codified as amended at 2 U.S.C. § 431 et seq.
11
2 U.S.C. § 441b(b)(2)(C).
12
424 U.S. 1 (1976).
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for constitutional analysis of campaign finance regulation. In Buckley, the Court upheld
reasonable contribution limits, invalidated certain expenditure limits, and upheld reporting and
disclosure requirements. In addition, the Court created the distinction between issue advocacy and
express advocacy, finding that a communication could be regulated if it contained words express
advocacy of the election or defeat of a candidate, which includes words such as “vote for” or
“vote against.” By contrast, such ads could not be regulated if they only contained general public
policy messages that fell short of calling for election or defeat of candidates, sometimes referred
to as issue advocacy. A generation would pass between the enactment of FECA and the next time
that Congress would again enact major campaign finance legislation—the Bipartisan Campaign
Reform Act of 2002 (BCRA)—but political advertising and the funding sources for that
advertising remained prominent during both legislative debates.
As the legislation that became BCRA was being debated in the late 1990s and early 2000s, a chief
concern surrounding issue advocacy was whether the ads were actually about public policy
issues—as proponents of the advertisements suggested—or whether they were really messages
designed to encourage votes for or against candidates within in the context of ads that were only
nominally related to public policy.13 In an effort to restrict issue advocacy, BCRA created a new
concept within FECA known as electioneering communications in order to regulate messages that
might affect elections, but did not expressly advocate for the election or defeat of a clearly
identified federal candidate. Importantly, BCRA prohibited corporations and unions from using
general treasury funds to pay for electioneering communications, meaning that potentially any ad
that even mentioned a political candidate during pre-election periods would have to be paid for
with PAC funds or not aired.
In 2007, in FEC v. Wisconsin Right to Life, Inc.,14 the Supreme Court limited the application of
the prohibition, thereby easing some restrictions on corporate- and union-funded ads that would
otherwise be classified as electioneering communications. As a result of the Court’s ruling, if an
advertisement could reasonably be interpreted as something other than calling for a vote for or
against a candidate, it could not be prohibited. While this ruling limited the application of the
electioneering communication prohibition, it did not expressly overrule it.
Citizens United v. Federal Election Commission
Citizens United, a corporation exempt from taxes under Internal Revenue Code (IRC) §
501(c)(4), produced a documentary about a presidential candidate, then-Senator Hillary Clinton.
The group released the film in theaters and on DVD, and planned to make it available through
video-on-demand and to fund broadcast and cable television advertisements promoting the movie.
In Citizens United v. Federal Election Commission (FEC),15 the U.S. Supreme Court considered
to what extent the organization was subject to the federal prohibitions on corporate treasury
13
For a historical overview, see, for example, Anthony Corrado et al., The New Campaign Finance Sourcebook
(Washington: Brookings Institution Press, 2005), pp. 35-47.
14
551 U.S. 449 (2007). For additional discussion, see CRS Report RS22687, The Constitutionality of Regulating
Political Advertisements: An Analysis of Federal Election Commission v. Wisconsin Right to Life, Inc., by (name red
acted); and CRS Report RL34324,
Campaign Finance: Legislative Developments and Policy Issues in the 110th
Congress, by (name redacted).
15
130 S. Ct. 876 (2010). For additional discussion, see CRS Report R41045, The Constitutionality of Regulating
Corporate Expenditures: A Brief Analysis of the Supreme Court Ruling in Citizens United v. FEC, by (name red
acted).
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funding of independent expenditures, electioneering communications, and related reporting
requirements.
On January 21, 2010, the Supreme Court issued its long-awaited ruling in this case, and
invalidated the prohibition on corporations and labor unions using their general treasury funds to
make independent expenditures and electioneering communications. The Court determined that
these prohibitions constitute a “ban on speech” in violation of the First Amendment.16 In so doing,
the Court also overturned its 1990 ruling in Austin v. Michigan Chamber of Commerce,17 which
had upheld restrictions on corporate-funded independent expenditures, finding that it provided no
basis for allowing the government to limit such independent expenditures. The Court also
overturned the portion of its decision in McConnell v. FEC18 upholding the facial validity of the
prohibition on electioneering communications in BCRA, finding that the McConnell Court relied
on Austin.19
The Court in Citizens United, however, upheld the disclaimer (which is sponsor information
included within a communication) and disclosure requirements for electioneering
communications as applied to the documentary. These requirements, the Court held, could be
applied to the film and related advertisements that Citizens United had produced.20 According to
the Court, while they may burden the ability to speak, disclaimer and disclosure requirements
“impose no ceiling on campaign-related activities.”21
It does not appear that the Court’s ruling in Citizens United affects the validity of Title I of
BCRA,22 which generally bans the raising of unregulated, also known as “soft,” money by
national parties and federal candidates or officials, and restricts soft money spending by state
parties for “federal election activities.” Furthermore, Citizens United does not appear to affect the
ban on corporate or union contributions to political candidates. As a consequence of Citizens
United, federal campaign finance law does not limit corporate and labor union treasury funding
for independent expenditures and electioneering communications. Corporations and unions may
still establish PACs, but are only required to use PAC funds in order to make contributions to
candidates, parties, and other political committees.
Congressional Response
Given these developments, questions have emerged about how political advertising might be
affected by the Court’s decision in Citizens United and whether the airwaves will be flooded with
corporate and labor union express advocacy. 23 Similar questions have arisen about the extent to
16
Id. at 898.
494 U.S. 652 (1990).
18
540 U.S. 93 (2003).
19
See Citizens United, 130 S. Ct. at 912-14 . For further discussion of McConnell v. FEC and Austin v. Michigan
Chamber of Commerce, see CRS Report RL30669, The Constitutionality of Campaign Finance Regulation: Buckley v.
Valeo and Its Supreme Court Progeny, by (name redacted).
20
See id. at 913-15.
21
Id. at 914 (quoting Buckley v. Valeo, 424 U.S. 1, 64 (1976)).
22
See 2 U.S.C. § 441i(a).
23
For an overview of the questions and points of debate referenced in this section, see, for example U.S. Congress,
House Committee on House Administration, DISCLOSE Act, report to accompany H.R. 5175, 111th Cong., 2nd sess.,
(continued...)
17
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which the Court’s decision might lead to increased campaign activity by tax-exempt
organizations, particularly § 501(c)(4) social welfare organizations and § 501(c)(6) trade
associations. Many of the these organizations are incorporated, and thus, prior to Citizens United,
were generally prohibited from using their treasury funds for independent expenditures and
electioneering communications.24 Additionally, all § 501(c) organizations, regardless of whether
they were incorporated, could not serve as conduits for corporate or labor union treasury funds to
fund independent expenditures and electioneering communications. In light of the Court’s
decision in Citizens United, some are expecting increased campaign activity by tax-exempt
organizations. Additionally, some have expressed concern that organizations might be used as
shadow groups—groups to which corporations, other entities, and individuals might give funds to
engage in campaign activity with little or no public disclosure.
Because this is the first time in modern history that corporate and union independent expenditures
have been permitted at the federal level, it remains to be seen how much additional money, if any,
might flow into the political system. A more complete understanding of how Citizens United will
affect the political environment, including campaign spending, will likely be unavailable until
after the 2010 election cycle, at the earliest. Proponents of legislative action have, nonetheless,
argued that preemptive legislation is necessary to avoid or at least document an expected
onslaught of new political advertising.
Legislative Action on the DISCLOSE Act Thus Far
Legislative responses to Citizens United began developing immediately after the January 21
ruling. More than 40 bills that are potentially relevant have been introduced in the 111th
Congress.25 The primary focus has been on the DISCLOSE Act. Representative Van Hollen
introduced the House measure, H.R. 5175, on April 29, 2010. Senator Schumer introduced the
initial Senate version, S. 3295, on April 30, 2010. Senator Schumer introduced S. 3628, a second
version of the DISCLOSE Act—apparently intended to supersede the other Senate measure—on
July 21, 2010. S. 3628 was placed on the Senate calendar, rather than being referred to
committee. The measure would, therefore, rapidly become available for floor consideration.
Although committees in both chambers have held hearings on Citizens United, the House has
largely focused on the DISCLOSE Act rather than other legislation.26 Both the Committee on
(...continued)
May 25, 2010, H.Rept. 111-492 (Washington: GPO, 2010).
24
An exception existed for qualified nonprofit corporations, which were defined as a § 501(c)(4) corporation meeting
the following criteria: (1) its only express purpose is the promotion of political ideas;v44 (2) it cannot engage in
business activities; (3) it has no shareholders or other persons with an ownership interest or claim on the organization’s
assets or who receive any benefit from the corporation that is a disincentive for them to disassociate themselves from
the corporation’s position on a political issue; and (4) it was not established by and does not accept donations from
business corporations. 11 C.F.R. § 114.10(c). The regulatory criteria for “qualified nonprofit corporations” is based on
the U.S. Supreme Court ruling in FEC v. Massachusetts Citizens for Life, Inc. (MCFL), 479 U.S. 238 (1986), holding
that the FECA prohibition on corporations using their treasury funds to make independent expenditures could not
constitutionally be applied to certain non-profit corporations.
25
See CRS Report R41054, Campaign Finance Policy After Citizens United v. Federal Election Commission: Issues
and Options for Congress, by (name redacted).
26
Thus far, the Senate Committee on Rules and Administration and Committee on the Judiciary have both held
Citizens United hearings, although those hearings did not address specific legislation per se.
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House Administration and House Judiciary Subcommittee on the Constitution, Civil Rights, and
Civil Liberties held hearings to assess the Citizens United ruling on February 3, 2010. The
Committee on House Administration held two hearings on H.R. 5175 specifically, on May 6,
2010, and May 11, 2010. The committee held a markup on May 20, 2010, when H.R. 5175 was
ordered favorably reported, as amended. 27 After the House Administration Committee reported28
an amended version of H.R. 5175 on May 25, the House of Representatives passed the bill, with
additional amendments, on June 24, 2010, by a 219-206 vote. 29
The versions of the bill as introduced in the House and as passed by the House were generally
similar. There were, however, some notable differences. In particular, the House-passed measure
modified the bill to
•
raise the threshold for prohibiting expenditures by government contractors from
contracts valued of at least $50,000 to contracts of at least $10 million;
•
clarify that Internet communications are generally not subject to FECA’s
disclosure and disclaimer requirements, except for paid political advertising;
•
require that independent expenditures and electioneering communication reports
be filed electronically and in a format that permits sorting and searching data (for
reports with at least $10,000 in expenditures); and
•
require automated political telephone calls (robo calls) to include “stand-byyour-ad” disclaimers. 30
Comparing the House and Senate Bills
Provisions in H.R. 5175 as Passed by the House, S. 3295 as Introduced, and S.
3628 as Introduced
Despite some differences (discussed below), these versions of the DISCLOSE Act would
generally
•
expand the current definitions of independent expenditure and electioneering
communication, thereby mandating expanded disclosure and disclaimer
requirements for certain political communications run by corporations, unions,
27
The Committee reported the bill on May 25, see U.S. Congress, House Committee on House Administration,
DISCLOSE Act, report to accompany H.R. 5175, 111th Cong., 2nd sess., May 25, 2010, H.Rept. 111-492 (Washington:
GPO, 2010). Also in the House, on March 11, the Committee on Financial Services, Subcommittee on Capital Markets,
Insurance, and Government Sponsored Enterprises, held a hearing addressing corporate governance and shareholder
protection after Citizens United. In addition to exploring general themes, various legislative proposals, including
Representative Capuano’s Shareholder Protection Act (H.R. 4790), were discussed. At the May 20, 2010, Committee
on House Administration markup, Rep. Capuano initially offered the Shareholder Protection Act as an amendment to
the DISCLOSE Act. He ultimately withdrew the amendment, saying that it would be pursued separately.
28
U.S. Congress, House Committee on House Administration, DISCLOSE Act, report to accompany H.R. 5175, 111th
Cong., 2nd sess., May 25, 2010, Rept. 111-492 (Washington: GPO, 2010).
29
“Democracy is Strengthened by Casting Light on Spending in Elections Act,” House vote 391, Congressional
Record, daily edition, vol. 156 (June 24, 2010), p. H4828.
30
For additional discussion of automated political calls, see CRS Report RL34361, Automated Political Telephone
Calls (“Robo Calls”) in Federal Campaigns: Overview and Policy Options, by (name redacted) and (name redacte
d).
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and certain tax-exempt § 527 and § 501(c) organizations (covered organizations),
and broadening the kind of communications that may be subject to FECA
prohibitions;
•
require covered organizations to report to the FEC information about their donors
(including transfers) and spending for certain independent expenditures and
electioneering communications;
•
require corporate chief executive officers or other high-ranking officials in
covered organizations to state their approval for advertising content, similar to
current “stand by your ad” requirements for candidate ads;
•
prohibit certain government contractors from making independent expenditures
and electioneering communications in federal elections; prohibit TARP recipients
from making contributions, independent expenditures, and electioneering
communications in federal elections; and prohibit corporations subject to certain
control or ownership by foreign nationals (e.g., U.S. subsidiaries of foreign
corporations) from making contributions, independent expenditures, and
electioneering communications in federal, state, and local elections; and
•
remove existing limits on coordinated party expenditures if a candidate or
candidate campaign does not control the expenditure.
Differences Between the House-Passed and Senate-Introduced Measures
Despite the general similarities discussed above, there are some important differences between
the version of the DISCLOSE Act passed by the House and the two introduced in the Senate.
Major differences between the House and Senate bills include the following provisions.
31
•
The two Senate bills contain lengthy findings sections. H.R. 5175 as introduced
and reported from the Committee on House Administration contained similar
findings, but the relevant section31 was omitted from the version of the bill
passed by the House.
•
The bills contain different thresholds for restricting independent expenditures and
electioneering communications by government contractors. S. 3295 would bar
such expenditures for entities holding contracts of at least $50,000.32 H.R. 5175
as passed by the House would set the threshold contract value at $10 million, as
would S. 3628.
•
The bill passed by the House also contains a restriction on Outer Continental
Shelf oil and gas lessees not found in the Senate bill. The House bill would
prohibit entities holding or negotiating these leases from making contributions,
independent expenditures, and electioneering communications in federal
elections. Neither Senate measure contains such a provision.
H.R. 5175, as introduced and as reported from the Committee on House Administration, § 2.
32
The House bill also initially contained a $50,000 threshold, which was increased to $7 million in the version reported
by the Committee on House Administration, and then to $10 million in the manager’s amendment approved by the
House.
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•
The bills would redefine foreign nationals, who are restricted from making
contributions or expenditures in U.S. elections, differently. All three measures
would expand the current foreign national definition to include certain foreigncontrolled U.S. corporations, but H.R. 5175 and S. 3628 contain additional
prohibitions on entities owned by or under control of foreign governments or
foreign-government officials.
•
Unlike H.R. 5175 and S. 3628, S. 3295 would revise the lowest unit charge
(LUC, also called the lowest unit rate). Currently, the LUC essentially permits
candidate committees to purchase preemptible broadcast advertising time at the
cheapest price offered to commercial advertisers for comparable time. 33 In
addition to other revisions, S. 3295 would bar preemption of LUC ads (unless
beyond a broadcaster’s control) and would extend the rate to national party
committees in some circumstances.
•
Both Senate bills would require Senate political committee34 reports to be filed
electronically and directly with the Federal Election Commission (FEC) rather
than with the Secretary of the Senate. Senate campaign committees, party
committees, and PACs currently are not required to file campaign finance reports
electronically. 35 The House bill does not address these provisions.
•
H.R. 5175, as passed by the House, excludes § 501(c)(3) organizations and
certain large § 501(c)(4) organizations from the disclosure and disclaimer
provisions.
Table 1 at the end of this report and the following discussion provide additional detail.
Potential Implications and Considerations
for Congress
General Considerations
As Congress evaluates the DISCLOSE Act, several factors could be relevant. It could first be
useful to consider what the bill would and would not do. In short, the DISCLOSE Act’s
provisions are essentially tailored to political advertising—the main policy issue raised by
Citizens United. In brief, the DISCLOSE Act appears aimed at documenting additional political
advertising in general, and restricting it where potential corruption might occur in specific
circumstances. Nonetheless, the disclosure provisions would not necessarily affect political
spending per se, nor would they necessarily deter those entities that wished to call for election or
defeat of federal candidates. As such, the bill would not necessarily ensure an equal playing field
among various political advertisers—including campaigns—nor could it necessarily do so.
33
47 U.S.C. § 315(b).
Political committees include candidate committees, party committees, and political action committees (PACs).
35
2 U.S.C. § 432(g). For additional discussion, see CRS Report R40091, Campaign Finance: Potential Legislative and
Policy Issues for the 111th Congress, by (name redacted).
34
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In general, the bills would broadly apply additional disclosure and disclaimer provisions to
entities making independent expenditures and electioneering communications, as defined in the
bills. Corporations, unions, and certain tax-exempt § 501(c) and § 527 organizations would all be
subject to the disclosure and disclaimer provisions—provided that their activities met the
financial and time thresholds required to classify their communications as independent
expenditures or electioneering communications. On the other hand, the bills’ restrictions on
political expenditures apply only to specific kinds of organizations—namely those government
contractors, entities subject to foreign control, or TARP recipients falling under the DISCLOSE
Act’s provisions barring certain political expenditures.
The bills would not, however, directly affect candidate campaigns in most cases. Indeed, the
provisions of the bills appear to be aimed primarily at non-campaign actors, particularly
corporations, unions, and tax-exempt organizations. The bills do not increase contribution limits
for candidate campaigns; they also generally do not address other political committees—parties
and PACs. A notable exception, discussed below, would permit parties to make additional
coordinated expenditures supporting their candidates. This is the only instance in which the bills
explicitly allow for more political spending than would be possible under the status quo.
In addition to the general policy approaches described above, specific provisions in the legislation
could be the subject of debate during House and Senate consideration of the DISCLOSE Act.
Because the effects of Citizens United will be unclear until at least the conclusion of the 2010
election cycle, and because of the quickly evolving debate in Congress, all the bills’ major
implications cannot be predicted. The following sections discuss some of the potential
implications of the bill, which Congress may wish to consider when evaluating the legislation. As
noted previously, other issues may also be relevant; additional analysis will be included in future
updates to this report as developments warrant.
Maintaining the Status Quo
If Congress chooses to maintain the status quo by not enacting a legislative response, some argue
that certain spending by corporations, unions, and tax-exempt organizations to influence elections
could go undocumented under current campaign finance law. In particular, it is possible that
under certain circumstances, undisclosed funds could be transferred from one organization to
another for the purpose of funding independent expenditures or electioneering communications.
Those organizations that the bill proposes to prohibit making expenditures, such as certain U.S.
subsidiaries of foreign corporations, would also be free to fund advertising as they saw fit. On the
other hand, if substantial additional spending following Citizens United does not occur, it is
possible that additional legislative action is unnecessary. In addition, some might contend that
existing law is sufficient to cover many of the topics addressed in the DISCLOSE Act.36
36
See, for example, Letter from Joan D. Aikens, et al., Former Members of the Federal Election Commission, to Reps.
Robert Brady and Dan Lungren, Committee on House Administration, May 19, 2010,
http://www.campaignfreedom.org/docLib/20100519_DISCLOSEcomments05192010.pdf.
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Modifying the Definitions of Independent Expenditures and
Electioneering Communications
As noted previously, now that corporations and unions are free to use general treasury funds for
independent expenditures and electioneering communications, the legislation proposes to
document such spending through disclosure and disclaimer requirements—and to prohibit some
entities from making such expenditures. The activities to which these requirements would apply
depend largely on how key terms are defined. Importantly, the bills would broaden the definitions
of independent expenditures and electioneering communications, thereby expanding the scope of
FECA’s regulation.
Specifically, the bills would expand the definition of independent expenditure to include an
expenditure “that, when taken as a whole, expressly advocates the election or defeat of a clearly
identified candidate, or is the functional equivalent of express advocacy because it can be
interpreted by a reasonable person only as advocating the election or defeat of a candidate, taking
into account whether the communication involved mentions a candidacy, a political party, or a
challenger to a candidate, or takes a position on a candidate’s character, qualifications, or fitness
for office.”37 In other words, it is possible that an advertisement could be subject to DISCLOSE
Act regulation as an independent expenditure even if it does not explicitly call for election or
defeat of a clearly identified candidate if the ad can reasonably be interpreted only as advocating
election or defeat of a candidate. In addition, the bills would increase the period (from 60 to 120
days for the House bill and S. 3628, and from 60 to 90 days for S. 3295) prior to general election
in which communications are treated as electioneering communications. These provisions are
noteworthy because they would affect the kind of political advertising subject to regulation under
the DISCLOSE Act and, by extension, other provisions in FECA.
Entities Covered by the Disclosure and Disclaimer Provisions
The bills’ disclosure, disclaimer, and shareholder/member reporting requirements would apply to
covered organizations, which would be defined as corporations, labor organizations, tax-exempt §
501(c)(4), (c)(5), and (c)(6) organizations,38 and § 527 political organizations that are not political
committees for purposes of FECA.39 H.R. 5175, as passed by the House, and S. 3628 would
37
DISCLOSE Act, § 201.
Section 501(c)(4) organizations include social welfare organizations; § 501(c)(5) describes labor, agricultural and
horticultural organizations; and § 501(c)(6) organizations include trade associations.
39
IRC § 527 provides tax-exempt status to political organizations, which are entities or funds that are organized and
operated primarily to influence “the selection, nomination, election, or appointment of any individual to any Federal,
State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential
electors.... ” Under FECA, political committee is defined to include “any committee, club, association, or other group
of persons which receives contributions aggregating in excess of $1,000 during a calendar year or which makes
expenditures aggregating in excess of $1,000 during a calendar year,” with both contribution and expenditure defined
as monies or anything of value “for the purpose of influencing any election for Federal office.” 2 U.S.C. § 431(4)(A),
(8)(A), (9)(A). With respect to entities engaging in federal election activity, § 527 political organizations include the
entities that are regulated as political committees under FECA. However, political organization is broader than political
committee, in part because it also includes the groups colloquially referred to as 527s that have been controversial in
recent years because they appear intended to influence federal elections in ways that may place them outside the
definition of political committee. For more information on 527s, see CRS Report RS22895, 527 Groups and Campaign
Activity: Analysis Under Campaign Finance and Tax Laws, by (name redacted) and (name redacted).
38
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The DISCLOSE Act: Overview and Analysis
expressly exclude § 501(c)(3) charitable organizations40 and qualifying large § 501(c)(4)
organizations from the definition of covered organization. S. 3295 does not contain similar
exemptions. Many tax-exempt entities are incorporated and therefore would fall within the
definition of covered organization, absent an exclusion. Therefore, under S. 3295, the term
covered organization would include incorporated § 501(c)(3) organizations. It is important to note
that the IRC imposes restrictions on the ability of tax-exempt organizations to engage in
campaign activity; for example, § 501(c)(3) organizations are prohibited from engaging in such
activity. 41 The activities that constitute electioneering under the IRC and FECA are not always the
same. 42 For example, it appears possible that an issue advocacy communication, depending on its
timing and content, might be an electioneering communication under FECA, but might not be
treated as campaign activity under the IRC.43
Prohibitions on Making Contributions or Spending in Elections
In addition to its disclosure, disclaimer, and reporting requirements, the legislation contains
several prohibitions. Specifically, it would prohibit certain government contractors, TARP
recipients, and corporations subject to certain control or ownership by foreign nationals from
making expenditures or contributions in connection with federal elections. Table 1, at the end of
this report, contains additional detail on individual prohibitions.
Government Contracts
Section 101 of H.R. 5175 as passed by the House and S. 3628 would prohibit government
contractors from making electioneering communications or independent expenditures “only if the
value of the contract is equal to or greater than $10,000,000.” This language appears to suggest
that this prohibition is intended to apply only to contractors holding a single contract of at least
$10 million.
S. 3295 would apply to contracts of at least $50,000. Although the original House bill had a
similar limit, the House-passed bill increased the threshold to $10 million. Some have suggested
that this modification was made to exempt small business government contractors from the
prohibition. While the value of the “average” federal procurement contract may seem low
($120,634 in FY2008),44 even small businesses routinely receive much larger contracts,45
40
IRC § 501(c)(3) describes organizations organized and operated for charitable, educational, and religious purposes,
among others.
41
IRC § 501(c)(3) (prohibiting the organizations described therein from “participat[ing] in, or intervene[ing] in … any
political campaign on behalf of (or in opposition to) any candidate for public office”).
42
For more information, see CRS Report R40141, 501(c)(3) Organizations and Campaign Activity: Analysis Under
Tax and Campaign Finance Laws, by (name redacted) and (name redacted).
43
See Rev. Rul. 2004-6.
44
This figure was obtained by dividing the total contract dollars awarded by the total number of contracts, as reported
on USASpending.gov. See http://www.usaspending.gov/explore?carryfilters=on&trendreport=top_cont&fromfiscal=
yes&tab=By+Recipient&fiscal_year=2009&tab=By+Recipient&fiscal_year=2008&fromfiscal=yes&carryfilters=on&
Submit=Go.
45
For purposes of federal procurement, a “small” business is one that is independently owned and operated, is “not
dominant in its field of operation,” and meets any definitions or standards established by the Small Business
Administration. 15 U.S.C. § 632(a)(1)-(2)(A). These standards focus primarily upon the size of the business, as
measured by the number of employees, its annual average gross income, and the size of other businesses within the
same industry. 13 C.F.R. §§ 121.101-121.108. For example, businesses in the field of scheduled passenger air
(continued...)
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The DISCLOSE Act: Overview and Analysis
arguably providing one rationale for exempting contractors who have not received a contract
valued at more than $10 million from the proposed ban on independent expenditures and
electioneering communications.46 Agencies may, for example, award contracts valued at up to
$3.5 million ($5.5 million for manufacturing contracts) to small businesses participating in the
8(a) Minority Business Development Program without competing them, 47 and some small
businesses have received contracts valued at over half a billion dollars.48 “Large” government
contractors, in contrast, can receive contracts valued at over $1 billion.49
TARP Recipients and Outer Continental Shelf Lessees
Section 101 of all three bills would prohibit prospective recipients of TARP funds from directly
or indirectly making contributions, independent expenditures, or electioneering communications.
Notably, it appears that the prohibitions would apply to TARP recipients using TARP funds, as
well as their own funds. The applicable period of the prohibition would begin on the later of the
commencement of the negotiations for financial assistance under title I of the Emergency
Economic Stabilization Act of 200850 or the date of enactment of one of these bills, and end on
the later of the ending of negotiations or the repayment of such financial assistance. In addition,
H.R. 5175 contains a similar prospective prohibition for those holding or negotiating for Outer
Continental Shelf oil and gas leases. S. 3295 and S. 3628 do not contain a similar prohibition.
Foreign Nationals
Several questions of interpretation could be raised by Section 102 of the legislation, which would
apply existing prohibitions on contributions or expenditures by foreign nationals to foreigncontrolled domestic corporations (e.g., U.S. subsidiaries of foreign corporations). For example, it
is unclear how the FEC or a court would interpret or administer some of the key terms contained
in the various thresholds for establishing foreign control, as proposed in Section 102. One such
threshold focuses upon direct or indirect ownership by a foreign national of various amounts of
the voting shares of a corporation (see Table 1), but would appear to leave the FEC substantial
discretion in determining what constitutes “indirect ownership” or at what point in time
ownership is determined. Other criteria similarly focus upon whether one or more foreign
nationals “has the power to direct, dictate, or control the decision-making process of the
corporation” with respect to its interests in the United States or in connection with its federal,
(...continued)
transportation are small if they have fewer than 1,500 employees, while those in the data processing field are small if
they have a gross income of less than $25 million. 13 C.F.R. § 121.201.
46
The relevant provisions of the DISCLOSE Act appear to apply to the value of each individual contract, not the total
value of contracts received by a particular contractor. However, it is unclear whether the value is measured in terms of
the base contract, or all options under the contract.
47
15 U.S.C. § 637 note; 48 C.F.R. § 19.805-1(b)(2). Certain group-owned 8(a) firms are not subject to even these
limitations and may receive sole-source contracts of any value.
48
Gov't Accountability Office, Contract Management: Increased Use of Alaska Native Corporations’ Special 8(a)
Provisions Calls for Tailored Oversight, GAO-06-399, April 2006, at 15, available at http://www.gao.gov/new.items/
d06399.pdf (reporting a $593 million sole-source award to Chugach Management Services, Inc.).
49
For example, Lockheed Martin Corp., the top federal contractor in FY2009, received five contracts valued at over $1
billion in FY2009. See USASpending.gov, http://www.usaspending.gov/explore?tab=By%20Recipient&contractorid=
359799&fromfiscal=yes&carryfilters=on&fiscal_year=2009.
50
12 U.S.C. § 5211 et seq.
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state, or local election activities, including PAC administration and making contributions and
expenditures. However, this standard would also appear to leave the FEC substantial discretion to
determine what forms of conduct or business arrangements would indicate that a foreign national
has the power to “direct, dictate, or control” corporate decision-making.
Coordinated Party Expenditures
Section 104 of the legislation appears to lift the existing caps on coordinated party expenditures
unless “the communication is controlled by, or made at the direction of, the candidate or an
authorized committee of the candidate.”51 In the absence of increased contribution limits,
candidates may face substantial obstacles responding to corporate and union advertising postCitizens United. Lifting the caps on coordinated party expenditures arguably provides parties with
a way to help their candidates facing potential corporate, union, or tax-exempt organizationfunded advertising. On the other hand, some may object to increasing the amount of money in the
political system, even if it is to respond to corporate or union advertising. In addition, the
standard for communications “controlled by, or made at the direction of, the candidate or an
authorized committee of the candidate” is not defined. Given this potential ambiguity, and an
ongoing FEC rulemaking on coordination, some in Congress might wish to clarify terms.
Potential Effects of Disclosure and Disclaimer Provisions
The bills would require additional disclosure of donors to covered organizations. The provisions
may be understood, at least in part, as a mechanism to limit the possibility that non-profit
organizations might be used as “shadow groups”—groups to which corporations, other entities, or
individuals would give funds to be used for campaign activities with little or no public disclosure.
A notable aspect of the bills is that they would require the disclosure of certain donors who did
not give money specifically for political activities, unlike, for example, the existing independent
expenditure provision, which only requires the disclosure of donors who gave “for the purpose of
furthering” the expenditure.52
Another potentially notable aspect of the donor disclosure provisions is that they would apply
FEC reporting requirements to § 527 political organizations that are not political committees
under FECA. These political organizations would include the “§ 527 groups” that have been
controversial in recent years because they seem intended to influence federal elections in ways
that might be outside the scope of FECA. Under current law, political committees report to the
FEC, while the § 527 groups report to the IRS.53 In both cases, the information is publicly
available. The other types of covered organizations are not currently subject to similar reporting
requirements.
51
For additional discussion of coordinated party expenditures, see CRS Report RS22644, Coordinated Party
Expenditures in Federal Elections: An Overview, by (name redacted) and (name redacted).
52
2 U.S.C. § 434(c)(2)(C); 11 C.F.R. § 109.10.
53
In general, these groups are required to periodically report to the IRS any expenditure of at least $500 and donors
who have given at least $200 during the year. IRC § 527(j). These requirements do not apply to independent
expenditures. For more information, see CRS Report RS21716, Political Organizations Under Section 527 of the
Internal Revenue Code, by (name redacted); CRS Report RS20918, 527 Organizations and Campaign Activity: Timing
of Reporting Requirements under Tax and Campaign Finance Laws, by (name redacted) and (name redacted).
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The DISCLOSE Act: Overview and Analysis
The bills’ disclosure and disclaimer requirements would not necessarily, in and of themselves,
limit overall spending on political advertising. Ultimately, corporations, unions, and other groups
intent on making independent expenditures and electioneering communications could choose to
do so regardless of such requirements. The additional requirements proposed in the bills might,
however, cause potential advertisers to consider whether they wish to be publicly accountable for
the advertising.
Campaign-Related Activity Accounts
Section 213 of the bills would permit covered organizations to establish optional accounts for
campaign-related activity, including independent expenditures and electioneering
communications. Because such accounts do not currently exist, it is unclear how significant this
provision might be. Several issues, however, could be relevant. First, it appears that once an
organization elected to establish the account, it would be required to use that account exclusively
for future campaign-related activity—a strategic or administrative decision that some
organizations might not be willing to make on a permanent basis. Second, the provisions specify
that amounts in the account be “exclusively for disbursements by the covered organization for
campaign-related activity.”54 Given this language, it is unclear whether or not an organization
using a campaign-related activity account could dispose of its funds if it decided to abandon
political spending altogether. If Congress wishes to provide a non-campaign-related mechanism
to do so, existing provisions in FECA permitting charitable contributions could be an option.55
Potential Implementation Concerns
Even if Congress enacts the DISCLOSE Act quickly, aspects of the legislation will require
agency implementation. The process could affect how quickly and how clearly the act affects
campaigns and related spending (e.g., independent political advertising). Because the DISCLOSE
Act would primarily amend FECA, the FEC would be responsible for administering and
enforcing most of the bill’s provisions.56
It is possible that the FEC could implement the DISCLOSE Act quickly, although various factors
suggest that it is unlikely the Commission could fully implement the act before the 2010
November general elections. 57 In addition to the time required to develop and reach agreement on
rules, for those rules to be finalized (upon publication in the Federal Register), the Commission
would have to also approve an explanation and justification (E&J) statement explaining its
rationale and offering practical guidance about what the regulations mean and how they will be
enforced. This process routinely takes months, even for expedited rulemakings. The Commission
would have to also amend its reporting forms to adhere to the act’s new requirements.
54
DISCLOSE Act, § 213.
2 U.S.C. § 439a(a)(3). These provisions apply to permissible use of candidate campaign committee funds,
suggesting that amendment would be required to make them applicable to campaign-related-activity accounts.
56
2 U.S.C. § 437c(b).
57
Some primary elections have already occurred without FEC action or legislation implementing the Court’s decision
in Citizens United. Those who believe that the case marked a victory for protected speech might contend that an
apparent lack of overwhelming new advertising could be evidence that additional regulation or legislation responding
to the ruling is unnecessary or it could be that potential participants are remaining on the sidelines until the state of the
law appears more settled.
55
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The DISCLOSE Act: Overview and Analysis
Importantly, FECA requires that adopting rules and developing forms (among other provisions)
requires affirmative votes from at least four of the six Commissioners.58 A series of deadlocked
votes (e.g., 3-3 ties) among members of the current Commission, however, suggests that
disagreement among Commissioners is possible—particularly on controversial or ambiguous
aspects of the legislation.59 If disagreements resulted in deadlock or failure to implement the law
as Congress intends, the DISCLOSE Act’s effectiveness could be delayed or compromised.
Perhaps in response to those concerns, many of the DISCLOSE Act’s provisions would become
effective 30 days after enactment, with at least one becoming effective immediately upon
enactment. The bills specify that their provisions would generally take effect regardless of
whether the FEC had promulgated rules to implement the legislation. Nonetheless, the “regulated
community” might lack practical and administrative guidance about how to comply with the act’s
provisions until the Commission could issue rules and begin considering advisory opinions.
Nonetheless, even if rulemaking or amending forms were delayed, the law itself would still take
effect as stated in the act. Therefore, even if some details remained to be determined, enacting the
DISCLOSE Act or other legislation could permit Congress to place additional requirements on
political advertisers or other campaign actors regardless of Commission action or inaction.
Conclusion
As Congress considers the DISCLOSE Act, it may be too soon to predict precisely how Citizens
United might affect campaigns or political advertising in the absence of legislation. If Congress
chooses to enact the DISCLOSE Act, it would provide additional information to the public and
regulators about political advertising funded by corporations, unions, and tax-exempt
organizations. It would also prohibit certain entities from funding electioneering communications
and independent expenditures, as well as providing political parties with greater ability to make
coordinated party expenditures in some cases.
Except for the spending prohibitions in the bill, nothing in the legislation would necessarily
prevent corporations, unions, or other entities from funding political advertising calling for
election or defeat of clearly identified candidates. The disclosure and disclaimer provisions could,
however, provide the public and regulators with additional information about the sources of that
advertising. Public disclosure could also cause would-be advertisers to think carefully before
making political expenditures. For those who believe that Citizens United will usher in a new era
of corporate or union dominance in elections, such an outcome might be welcome. On the other
hand, those who believe that Citizens United correctly strengthens corporate and union speech
rights might be wary of any provisions perceived as stifling the ability to participate in elections.
As Congress considers the DISCLOSE Act, issues related to how terms are defined, the kinds of
organizations that would be regulated, implementation, and other concerns may be relevant.
58
For a brief overview of Commission duties requiring consensus among at least four Commissioners, see CRS Report
RS22780, The Federal Election Commission (FEC) With Fewer than Four Members: Overview of Policy Implications,
by (name redacted).
59
For an overview of deadlocked votes during the current Commission’s first year, between July 2008 and June 2009,
see CRS Report R40779, Deadlocked Votes Among Members of the Federal Election Commission (FEC): Overview
and Potential Considerations for Congress, by (name redacted). Deadlocks have continued on some matters since that
time.
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Table 1. Comparison of Major Provisions of H.R. 5175, S. 3628, and
S. 3295 with Current Federal Law
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Findings
Definition of Independent
Expenditure
Independent expenditure is defined
as an expenditure “expressly
advocating the election or defeat
of a clearly identified candidate”
and that is not made in
coordination with a candidate or
party.
[2 U.S.C. § 431(17)]
According to Supreme Court
precedent, the “functional
equivalent of express advocacy” is
a communication that is
susceptible of no reasonable
interpretation other than as an
appeal to vote for or against a
specific candidate.
[Citizens United v. FEC, 130 S. Ct.
876, 889-90 (2010), quoting FEC v.
Wisconsin Right to Life, Inc., 551
U.S. 449, 469-70 (2007)]
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
No comparable provision.
Would set forth general and
specific findings in support of the
legislation.
With some modifications, similar
to S. 3628 as introduced in the
Senate, (hereinafter “S. 3628”).
[§ 2]
[§ 2]
Substantially similar to H.R. 5175
as passed by the House
(hereinafter “H.R. 5175”).
Substantially similar to H.R. 5175
and S. 3628.
Would expand definition of
independent expenditure to include
an expenditure “that, when taken
as a whole, expressly advocates
the election or defeat of a clearly
identified candidate, or is the
functional equivalent of express
advocacy because it can be
interpreted by a reasonable
person only as advocating the
election or defeat of a candidate,
taking into account whether the
communication involved mentions
a candidacy, a political party, or a
challenger to a candidate, or takes
a position on a candidate’s
character, qualifications, or fitness
for office.”
[§ 201]
[§ 201]
Would impose 24-hour reporting
requirement for expenditures of
$10,000 or more made during the
period up to and including the
20th day before an election and
expenditures of $1,000 or more
made during the period after the
20th day, but more than 24 hours
before an election.
[§ 201]
Definition of Electioneering
CRS-16
Electioneering communication is
Would expand period prior to
Substantially similar to H.R. 5175.
Would expand period prior to
Major Policy Issue
Communication
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
defined as a broadcast, cable, or
satellite transmission that refers
to a clearly identified federal office
candidate and is made within 60
days of a general election (or
within 30 days of a primary).
general election in which
communications are treated as
electioneering communications to
120 days.
[§ 202]
general election in which
communications are treated as
electioneering communications to
90 days.
[§ 202]
[§ 202]
[2 U.S.C. § 434(f)(3)(A)(i)(II)]
Definition of Public
Communication Exempting
Free Internet
Communications
Public Communication is defined as
a communication by means of
broadcast, cable, or satellite
communication, newspaper,
magazine, outdoor advertising
facility, mass mailing, or telephone
bank to the general public, or any
other form of general public
political advertising.
[2 U.S.C. § 431(22)]
Involvement in Federal
Elections by Foreign
Nationals
Foreign nationals are prohibited
from making contributions in
federal, state, or local elections,
and are prohibited from making
independent expenditures and
electioneering communications in
federal elections, [2 U.S.C. §
441e], but U.S. subsidiaries of
foreign corporations may form
PACs to make expenditures and
contributions under certain
circumstances.
FEC regulations provide that
foreign nationals shall not “direct,
dictate, control, or directly or
indirectly participate” in the
decision-making process of a
corporation, labor union, political
committee, or political
organization with regard to
CRS-17
Would exempt Internet
communications, unless placed for
a fee on another person’s
website, from being treated as a
form of “general public political
advertising,” thereby exempting
such communications from the
definition of public communication.
Substantially similar to H.R. 5175.
No relevant provision.
[§ 105]
[§ 105]
Would expand the definition of
foreign national to prohibit
contributions in federal, state, or
local elections; and independent
expenditures and electioneering
communications in federal
elections by foreign-controlled
domestic corporations as follows:
(1) if the foreign national is a
foreign country, foreign
government official, or a
corporation principally owned or
controlled by a foreign
government or official, and the
foreign national directly or
indirectly owns or controls at
least 5% of the corporation’s
voting shares; or
(2) if the foreign national is other
than a foreign country, foreign
Substantially similar to H.R. 5175.
[§ 102]
Would expand the definition of
foreign national to prohibit
contributions in federal, state, or
local elections; and independent
expenditures and electioneering
communications in federal
elections by foreign-controlled
domestic corporations as follows:
(1) if a foreign national directly or
indirectly owns at least 20% of the
corporation’s voting shares; or
(2) if a majority of the
corporation’s board members are
foreign nationals; or
(3) if one or more foreign national
can “direct, dictate, or control”
the corporation’s decision-making
process with respect to its U.S.
interests; or
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
federal or non-federal electionrelated activities, such as decisions
concerning the making of
contributions, donations,
expenditures, or disbursements in
connection with federal, state or
local election or regarding the
administration of a political
committee.
government official, or a
corporation principally owned or
controlled by a foreign
government or official, and the
foreign national directly or
indirectly owns or controls at
least 20% of the corporation’s
voting shares; or
[11 C.F.R. § 110.20(i)]
(3) if at least two foreign
nationals, each of whom owns or
controls at least 5% of the
corporation’s voting shares,
directly or indirectly own or
control at least 50% of the
corporation’s voting shares; or
(4) if a majority of the
corporation’s board members are
foreign nationals;
(5) if one or more foreign
nationals can “direct, dictate, or
control” the corporations’
decision-making process with
respect to its U.S. interests; or
(6) if one or more foreign
nationals can “direct, dictate, or
control” decision-making of the
corporation with respect to its
activities in connection with
federal, state, or local elections,
including making contributions,
donations, expenditures,
independent expenditures,
disbursements for electioneering
communications or administration
of a PAC established or
maintained by the corporation.
[§ 102]
CRS-18
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
(4) if one or more foreign
nationals can “direct, dictate, or
control” decision-making of the
corporation with respect to its
activities in connection with
federal, state, or local elections,
including making contributions,
donations, expenditures,
independent expenditures,
disbursements for electioneering
communications or administration
of a PAC established or
maintained by the corporation.
[§ 102]
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Would require CEOs (or highestranking corporate official) to
certify under penalty of perjury,
to the FEC, before making
expenditures in connection with
federal office elections, that the
foreign-national prohibitions
above do not apply to the
corporation.
Substantially similar to H.R. 5175.
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
[§ 102]
[§ 102]
Would clarify that provision does
not prohibit a corporation which
is not a foreign national from
establishing a political action
committee (PAC), or from making
a lawful contribution in a state or
local election, so long as none of
the funds in the PAC or as used
for the state-contribution are
provided by a foreign national and
no foreign national has power to
“direct, dictate, or control” the
PAC or state-level contribution.
[§ 102]
Involvement in Federal
Elections by Government
Contractors
Government contractors are
prohibited from making
contributions.
[2 U.S.C. § 441c]
Contributions,
Independent Expenditures,
and Electioneering
Communications by
Those Receiving TARP
Funds
CRS-19
Corporations are prohibited from
using general treasury funds to
make contributions.
[2 U.S.C. § 441b(a)]
As a result of Citizens United, it
Would prohibit government
contractors holding contracts of
$10 million or more from making
independent expenditures and
electioneering communications. [§
101]
Substantially similar to H.R. 5175.
Would prohibit entities receiving
or negotiating for TARP funds
from making contributions,
independent expenditures, or
electioneering communications
until the funds were repaid (or if
Substantially similar to H.R. 5175
and S. 3295.
Substantially similar to H.R. 5175
and S. 3628.
[§ 101]
[§ 101]
[§ 101]
Would prohibit government
contractors holding contracts of
$50,000 or more from making
independent expenditures and
electioneering communications.
[§ 101]
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
appears that regardless of
whether having received TARP
funds, corporations are permitted
to use general treasury funds to
make independent expenditures
and electioneering
communications.
the negotiations ended without
the entity receiving funds).
[Citizens United v. FEC, 130 S. Ct.
876 (2010)]
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
No relevant provision.
No relevant provision.
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628, but no exclusion for
§ 501(c)(3) organizations and
qualifying § 501(c)(4)
organizations.
Prohibition would begin on the
later of the commencement of the
negotiations for such financial
assistance under title I of the
Emergency Economic Stabilization
Act of 2008 or the date of
enactment H.R. 5175, and end on
the later of the ending of
negotiations or the repayment of
such financial assistance.
[§ 101]
Contributions,
Independent Expenditures,
and Electioneering
Communications by
Those Holding and
Negotiating Outer
Continental Shelf Oil and
Gas Leases
No existing prohibition specifically
on those holding oil and gas
leases.
Corporations are prohibited from
using general treasury funds to
make contributions.
[2 U.S.C. § 441b(a)]
As a result of Citizens United,
corporations are permitted to use
general treasury funds to make
independent expenditures and
electioneering communications.
Definition of Covered
Organization for Purposes
of the Act’s Disclosure
and Disclaimer Provisions
CRS-20
Would prohibit those holding or
negotiating for Outer Continental
Shelf oil and gas leases from
making contributions,
independent expenditures, and
electioneering communications.
Prohibition would begin on the
later of the commencement of
the lease negotiations or the date
of enactment of H.R. 5175, and
end on the later of the ending of
negotiations or termination of the
lease.
[Citizens United v. FEC, 130 S. Ct.
876 (2010)]
[§ 101]
Not relevant under current law.
Would define covered organizations
as corporations, labor unions, §
501(c)(4), (c)(5), and (c)(6)
organizations, and § 527 political
organizations that are not political
committees under FECA.
IRC § 501(c) describes entities
that qualify for tax-exempt status,
including § 501(c)(3) charitable
organizations; § 501(c)(4) social
welfare organizations; § 501(c)(5)
labor unions, and § 501(c)(6)
trade associations. Many
Would expressly exclude §
501(c)(3) organizations from the
[ § 211(a), (b), (c); § 212; § 213; §
214; § 301; exception for
qualifying § 501(c)(4)
organizations is in § 211(c)]
[ § 212]
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
organizations are incorporated.
definition. Also excluded would
be § 501(c)(4) organizations that
do not use funds from
corporations or labor unions for
campaign-related activity if the
organization had § 501(c)(4)
status for at least 10 years; had at
least 500,000 dues-paying
members who were individuals
and at least one member in each
state, D.C., and Puerto Rico
during the prior year; and
received no more than 15% of
total donations from corporations
or labor unions during the prior
year.
§ 501(c)(4), (c)(5), and (c)(6)
organizations may engage in a
limited amount of campaign
activity under the IRC, although
there may be tax consequences.a
§ 501(c)(3) organizations are
absolutely prohibited from
engaging in such activity. What is
campaign activity under the IRC
and FECA might not always be the
same.
IRC § 527 provides tax-exempt
status to political organizations with
the primary purpose of influencing
elections or engaging in similar
activities. Under FECA, political
committees are entities receiving
contributions or making
expenditures aggregating at least
$1,000 per year for the purpose
of influencing federal elections.
The term political organization is
broader than political committee, in
part because it includes groups
intending to influence state and
local elections and the groups
colloquially referred to as 527s
that have been controversial in
recent years because they appear
intended to influence federal
elections in ways that may place
them outside the definition of
political committee.
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628.
[ § 211(a), (b), (c); § 212; § 213; §
214; § 301; exception for
qualifying § 501(c)(4)
organizations is in § 211(c)]
[IRC §§ 501(c), 527; 2 U.S.C. §
431(4)(A), (8)(A), (9)(A)]
Stand by Your Ad
Disclaimers in Political
CRS-21
Corporations and labor unions
funding express advocacy messages
Would expand types of
communications funded by
Major Policy Issue
Advertising
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
are required to indentify in the
communication: their name,
address, and contact information;
and that the communication “is
not authorized by any candidate
or candidate’s committee.”
“covered organizations” that
trigger disclaimer requirements to
include disbursements for an
“independent expenditure
consisting of a public
communication.”
[§ 214]
[§ 214]
[2 U.S.C. § 441d(a)(3)]
[§ 214]
Corporate and union radio and
TV ads are required to include an
audio statement that the
corporation or union paid for the
ad. In TV ads, the statement is
required to be conveyed by a
view or voice-over of a corporate
or union representative.
Would expand disclaimer
requirements for disbursements
by covered organizations for
independent expenditures or
electioneering communications to
require the organization’s CEO or
highest ranking official or any
“significant funder” to state their
approval for the communication,
and would require listing the “Top
Five Funders.”
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628.
[2 U.S.C. § 441d(d)(2)]
[§ 214]
[§ 214]
[§ 214]
Candidates are currently required
to state their approval for their
broadcast advertising.
[2 U.S.C. § 441d(d)(1)]
Would require disclaimers to
include name of person approving
message and name of any
“significant funder” (if the
communication is an independent
expenditure consisting of a public
communication and is paid in
whole or in part with
disbursement by covered
organization for campaign-related
activity), and the local jurisdiction
and state where individual resides
or organization’s principal office is
located.
Substantially similar to H.R. 5175,
except it would not require the
disclaimers to include the local
jurisdiction and state where the
individual resides or the
organization’s principal office
location, but would require that
the title of the individual
approving the message be
provided.
Substantially similar to H.R. 5175
and S. 3628, except that it would
not require the disclaimers to
include the local jurisdiction and
state where the individual resides
or the organization’s principal
office is located, nor would it
require that the title of the
individual approving the message
be provided.
[§ 214]
[§ 214]
Substantially similar.
Substantially similar.
[§ 214]
Would provide exemption to
CRS-22
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
disclaimer requirements if on the
basis of criteria established in FEC
regulations, the communication is
so short that including disclaimer
would constitute a hardship.
[§ 214]
[§ 214]
No relevant provision.
No relevant provision
Substantially similar to H.R. 5175
No relevant provision.
[§ 214]
Would expand application of
disclaimer requirements to cover
political committees that accept
contributions or donations that
do not comply with FECA
contribution limits or source
prohibitions.
[§ 214]
Disclaimers for
Automated Political
Telephone Calls (Robo
Calls)
Election law and
telecommunications law do not
address political robo calls per se.
Robo calls that advocate for
election or defeat of candidates
or solicit funds appear to require
disclaimers stating who paid for
the communication. [2 U.S.C. §
441d(a)]
Among other requirements,
telecommunications law appears
to require that prerecorded
phone calls identify the entity
responsible for the call at the
beginning of the message [47
U.S.C. § 227(d)(3); 47 C.F.R. §
64.1200(b)(2)].
Disclosure of
Expenditures
Disclosure of donors to
CRS-23
In quarterly reports to the FEC,
entities making independent
expenditures in excess of $250
during a calendar year must
Would require political robo calls
to include a disclaimer. Would
also require disclosure of top five
funders for an electioneering
communication or independent
expenditure consisting of a public
communication made or paid for
by covered organizations or
political committees that accept
contributions or donations that
do not comply with FECA
contribution limits or source
prohibitions.
[§ 214]
Both disclosure and disclaimer
would have to be made at the
beginning of the call, unless the
FEC determined that the message
was so short that doing so would
be a hardship. [§ 214]
Would require covered
organizations making public
independent expenditures that
aggregate at least $10,000 in a
Substantially similar to H.R. 5175.
[§ 211(a),(b)]
Substantially similar to H.R. 5175
and S. 3628; except that the
reporting thresholds for donors
of independent expenditures
Major Policy Issue
covered organizations
making independent
expenditures and
electioneering
communications
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
disclose donors who contribute
more than $200 “for the purpose
of furthering” the expenditure. If
the entity spends at least $10,000
toward independent expenditures
during an election year, those
expenditures must be reported to
the FEC within 48 hours if the
expenditure occurred up to 20
days before the general election.
Entities that spend at least $1,000
on independent expenditures less
than 20 days before the election
must report that spending to the
FEC within 24 hours. Donors of
more than $200 must also be
included in the 48-hour and 24hour reports.
calendar year to disclose, within
48 hours:
[2 U.S.C. § 434(c)(2)(C); 11 C.F.R.
§ 109.10]
Entities making at least $10,000 in
electioneering communications
must disclose donors who
contribute at least $1,000;
however, if the disbursement is
made from a separate account
that contains only contributions
by U.S. citizens and legal resident
aliens made directly to the
account for electioneering
communications, then only those
donors who contribute at least
$1,000 to the account are
disclosed.
[2 U.S.C. § 434(f)(2)(E), (F)]
11 C.F.R. § 104.20 contains rules
for corporations, labor unions,
and qualified nonprofit
CRS-24
(1) donors who gave at least $600
for campaign-related activity or in
response to solicitation for funds
for such activity (along with the
candidate, election, or public
independent expenditure, if
specified by donor); and
(2) donors who gave unrestricted
donations during the reporting
period of at least:
- $6,000 if the disbursements
were made exclusively from a
Campaign-Related Activity
Account (CRAA) and the
organization made deposits of at
least $10,000 into account during
reporting period, or
- $600 if any disbursement was
not from the CRAA.
If organization is deemed to have
made a transfer (see below),
thresholds would be increased to
$10,000.
Rules essentially the same for
covered organizations making at
least $10,000 in electioneering
communications, although the $600
and $6,000 amounts are increased
to $1,000 and $10,000. To get
benefit of higher threshold,
organization must make from the
CRAA those electioneering
communications that it reasonably
believes are for a § 527 exempt
function.a
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
would be $1,000 and $10,000; no
higher donor-disclosure threshold
for organizations deemed to have
made a transfer; and all
electioneering communications
would have to be made from
CRAA in order to qualify for
higher donor-disclosure
threshold.
[§ 211(a), (b)].
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
corporations that make certain
types of electioneering
communications. Its applicability
in light of Citizens United is
unclear.
Donor-disclosure rules would not
apply to payments received in the
regular course of business.
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628, except no exclusion
for disbursements not treated as
made for a § 527 exempt function;
a no express language addressing
treatment of accounts for
purposes of IRC § 527(f)(3);a and
CRAA could not contain funds
that donor notified organization in
writing could not be used for such
activity.
[§ 211(a), (b)]
Section 527 political organizations
that are not political committees
under FECA are generally
required to periodically report
information regarding their
donors and expenditures to the
IRS (or a state). Such information
is made publically available. The
reporting requirement does not
apply to expenditures that are
independent expenditures.
[26 U.S.C. § 527(j), (k)]
If organization uses CRAA, all
disbursements for campaignrelated activity would have to
come from CRAA except for
those which the organization
reasonably believes would not be
treated as for a § 527 exempt
function,a and account funds
would have to be used
“exclusively” for such purposes.
CRAA would contain: donations
made for campaign-related activity
or in response to solicitations for
funds for such activity; and
amounts transferred from other
accounts (including general
treasury funds). Could not contain
funds which the organization and
donor “mutually agreed” would
not be used for such activity.
The establishment or
CRS-25
[§ 213]
[§ 213]
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
administration of the CRAA
would not, by itself, be treated as
the establishment or
administration of a political
committee. Nonetheless, it “may”
be treated as a separate
segregated fund for purposes of
IRC § 527(f)(3).a
[§ 213]
If the donation would be disclosed
and the organization and donor
“mutually agree” at the time of
the donation that the funds are
not to be used for campaignrelated activity, then the
organization’s CFO would have to
certify to the donor, within 30
days of receipt, that the funds
would not be used for such
activity and the person’s identity
would not be disclosed through
the bill’s disclosure or disclaimer
provisions.
[§ 212]
An organization only subject to
reporting requirements because it
was deemed to have made a
transfer (see below) would not
have to file report if all donors
were individuals and any donor
making a donation for campaignrelated activity or unrestricted
donation during the reporting
period gave less than $10,000.
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Substantially similar to H.R. 5175.
[§ 212]
If donor notified organization in
writing that the funds were not to
be used for campaign-related
activity, then the organization’s
CFO would have to certify to the
donor within seven days of
receipt that the funds would not
be used for such activity and the
person’s identity would not be
disclosed through the bill’s
disclosure or disclaimer
provisions.
[§ 212]
Substantially similar to H.R. 5175.
No comparable provision.
[§ 211(a),(b)]
[§ 211(a),(b)]
Disclosure of
Expenditures
CRS-26
No comparable existing statutory
provision.
A covered organization would be
treated as making a public
independent expenditure or
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628.
Major Policy Issue
Transfers subsequently
used for campaign activity
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
electioneering communication if it
transferred funds to another
person for such purpose or was
deemed to have made a transfer.
The organization would be
deemed to have made such a
transfer if:
•
it designates, requests, or
suggests that the amounts be
used for public independent
expenditures or
electioneering
communications and the
transferee agrees to do so;
•
the person making the
expenditure (or someone
acting on his/her behalf)
expressly solicited the
organization for funds for
making or paying for such
expenditures;
•
CRS-27
it and the transferee engaged
in written or oral discussions
regarding the transferee
making or paying for such
expenditures (or donating or
transferring the amounts to
another person for such
purpose);
•
it knew or had reason to
know that the transferee
intended to make such
expenditures; or
•
it or the transferee made at
least $50,000 in public
independent expenditures or
electioneering
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Substantially similar to H.R. 5175.
The organization would be
deemed to have made such a
transfer if:
•
the person making the
expenditure (or someone
acting on his/her behalf)
solicited funds from the
transferor or transferee for
making such expenditures;
•
there were “substantial
discussions” about such
expenditures between the
transferor and transferee;
•
the transferor or transferee
knew (or should have
known) of the covered
organization’s intent to make
such expenditures; or
•
the transferor or transferee
made a public independent
expenditure or
electioneering
communication in the
current or previous election
cycle.
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
An exception would exist for
commercial transactions
occurring in the ordinary course
of business between the
organization and transferee
(unless there was affirmative
evidence that the amounts were
transferred for the purpose of
making such expenditures), or the
covered organization and
transferee mutually agreed that
the funds would not be used for
campaign-related activity.
Substantially similar to H.R. 5175.
An exception would exist for
commercial transactions
occurring in the ordinary course
of business. Additionally, funds
may not be used for campaignrelated activity if the donor
notifies the organization in writing
that the funds may not be used
for such purpose.
Exception would also exist for
transfers between affiliated
organizations (including §
501(c)(3) organizations) if the
aggregate amount transferred
during the year was less than
$50,000 and neither organization
was established for the purpose of
disbursing funds for campaignrelated activity. For determining
whether the $50,000 threshold
was met, funds attributable to
dues, fees, or assessments paid by
individuals on a regular, periodic
basis in accordance with a perindividual calculation that was
made on a regular basis would be
attributed to the individual and
not the organization.
An organization would be an
affiliate of another if its governing
instrument required it to be
bound the other’s decisions; it is
Exception would also exist for
transfers between affiliated
organizations. If the transfer[s]
aggregated at least $50,000 during
the year, then the report filed by
the transferee organization must
include the information required
relating to donations and
payments made to the affiliate
which transferred the funds and
to any affiliate which transferred
at least $50,000 in the 12-month
period prior to the transfer.
No comparable provision.
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
communications during the
two-year period ending on
the date of the transfer.
CRS-28
Affiliates would be a membership
organization and its related state
and local entities; a national or
international labor organization
and its local union, or an
organization of national or
international unions and its state
and local central bodies; and a
corporation and its wholly owned
[§ 211(a),(b); § 212]
Major Policy Issue
CEO Certification of
Certain Information to the
FEC
Overview of Major Relevant
Provisions in Current Federal
Law
No comparable existing statutory
provision.
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
charted by the other organization;
or its governing board includes
designated representatives of the
other organization or includes
persons who have a certain
relationship to the other
organization or whose service on
the board is contingent upon the
other organization’s approval.
[§ 211(a),(b)]
If a covered organization makes a
disbursement for “campaignrelated activity” during the
calendar quarter, the CEO or
designee would be required to
certify to FEC, within 15 days of
the quarter’s end, that the
disbursement was made in
compliance with applicable law.
subsidiaries.
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
[§ 211(a),(b)]
Substantially similar to H.R. 5175
and S. 3295.
Substantially similar to H.R. 5175
and S. 3628.
[§ 212]
[§ 212]
Substantially similar to H.R. 5175
No comparable provision.
[§ 212]
(See also CEO certification
requirements in the Involvement in
Federal Elections by Foreign
Nationals row above. [§ 102])
Indexing for Inflation
Disclosure of Certain
Lobbyist Spending
FECA currently contains some
indexing provisions (e.g., 2 U.S.C.
§ 441a(c)) but they are generally
inapplicable to the relevant new
provisions in the DISCLOSE Act.
Would index various reporting
thresholds (e.g., for donor
disclosure) established in the bill.
Lobbyists must semiannually
report “contributions” exceeding
$200 made to candidates,
leadership PACs, or parties.
Would require lobbyists to
disclose in certain Lobbying
Disclosure Act (LDA) reports:
[2 U.S.C. § 1604(d)(1)(D)]
(Note: Additional FEC
electioneering communication and
CRS-29
[§ 215]
[§ 215]
(1) independent expenditures of
at least $1,000 funded by those
lobbyists; the names of candidates
supported or opposed in the ads;
and the amount spent supporting
Substantially similar to H.R. 5175;
however in addition to disclosure
of electioneering communications
of at least $1,000 funded by
lobbyists, and the names of
candidates referred to in the ads,
would also require disclosure of
whether the ad supported or
Substantially similar to H.R. 5175
and S. 3628.
[§ 221]
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
independent expenditure
reporting requirements may apply
to lobbyists in certain
circumstances, but are not
intended to apply specifically to
lobbyists.)
or opposing each candidate;
opposed the candidate.
(2) electioneering
communications of at least $1,000
funded by lobbyists; the names of
candidates referred to in the ads.
[§ 221]
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
[§ 221]
Disclosure to
Shareholders, Members,
and Donors of Covered
Organizations
There is no comparable
requirement, although disclosure
may be required to the FEC (e.g.,
for independent expenditures or
electioneering communications)
or, in the case of tax-exempt
organizations, to the IRS, and such
information is generally subject to
public disclosure.
[2 U.S.C. § 434; 26 U.S.C. §§ 527,
6033, 6103]
Would require a covered
organization to disclose
disbursements for campaignrelated activity in any “regular,
periodic reports” on its
finances/activities provided to its
shareholders, members, and
donors. Information would
include the date and amount
spent, the source of the funds, the
name of candidates referred to in
the ads and whether the ads
supported or opposed the
candidate, and information about
transferred funds. The
information would have to be
reported in a “clear and
conspicuous manner.”
A covered organization would
also be required to post a
hyperlink on its homepage to the
location at the FEC website
containing the organizations’
reports. The hyperlink would
have to be posted within 24 hours
after the FEC posts the
information and remain on the
organization’s website for one
year following the election.
[§ 301]
CRS-30
Substantially similar to H.R. 5175.
[§ 301]
Substantially similar information
must be reported as under H.R.
5175 and S. 3628, although no
requirement it be reported in a
“clear and conspicuous manner.”
Within 24 hours of filing reports
with FEC, organization would
have to post information
regarding independent
expenditures and electioneering
communications on its website,
through a direct link from its
homepage, in a machine-readable,
searchable, sortable, and
downloadable manner.
Information would have to remain
on website for one year following
the election. Organization would
also have to post a breakdown of
disbursements by political party
and incumbents/challengers by
January 31 in the year following
the election and keep the
information on the website until
the end of that year.
[§ 301]
Major Policy Issue
Coordination of Certain
Expenditures
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
A communication is coordinated
(and therefore an in-kind
contribution to a candidate or
party, or a coordinated party
expenditure) with a candidate or
a party when the communication
satisfies at least one “content”
standard and at least one
“conduct” standard. A content
standard is met, in part, for House
or Senate elections, if the
communication refers to a
candidate and is disseminated
within 90 days before the general
or primary election, and for
presidential and vice presidential
elections, if the communication
refers to a candidate and is
disseminated within 120 days
before the primary or nominating
convention or caucus.
Would define coordination as a
“covered communication,” (which
“refers” to a candidate and is
publically distributed) that is made
“in cooperation, consultation, or
concert with, or at the request or
suggestion of” a candidate or
party or any communication that
“republishes, disseminates, or
distributes” any candidate
campaign material.
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628, although exemption
for a news story, commentary, or
editorial distributed through
broadcast, newspaper, or
magazine, (unless controlled by
party, political committee, or
candidate) or a candidate debate
or forum would only apply to
“covered communications.”
[11 C.F.R. § 109.21(a),(c)]
A conduct standard is met, in
part, if the communication is
created, produced, or distributed
at the request or suggestion of a
candidate or party, or at the
suggestion of the person paying
for the communication and the
candidate or party assents to the
suggestion, or the communication
is created, produced, or
distributed after one or more
“substantial discussions” about
the communication between the
person paying for it and the
candidate or party. A discussion is
“substantial” if information about
the candidate’s or party’s
CRS-31
Would exempt from definition of
“coordinated communication”
communications appearing in a
news story, commentary, or
editorial distributed through
broadcast, newspaper, or
magazine, (unless controlled by
party, political committee, or
candidate) or a candidate debate
or forum.
[§ 103]
[§ 103]
[§ 103]
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Would expand time period that a
communication is considered
coordinated between a
corporation or union and a House
or Senate candidate who is
referenced in corporate/union
communication, to those made 90
days before the primary through
the general election.
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628.
campaign plan, projects, activities,
or needs is conveyed to a person
paying for the communication and
that information is material to the
creation, production, or
distribution of the
communication.
[11 C.F.R. § 109.21(d)]
[§ 103]
[§ 103]
[§ 103]
Would expand time period that
coordination is prohibited
between corporation or union
and presidential or vice
presidential candidates,
referenced in corporate/union ads
made 120 days before the first
presidential primary through the
general election.
Substantially similar to H.R. 5175.
[§ 103]
Substantially similar to H.R. 5175
and S. 3628.
[§ 103]
[§ 103]
Would specify that a covered
communication may not be
considered coordinated “solely on
the grounds” that a person
“engaged in discussions with the
candidate or committee”
regarding that person’s position
on a legislative or policy matter
(including urging the candidate or
CRS-32
Substantially similar to H.R. 5175.
[§ 103]
No comparable provision.
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Substantially similar to H.R. 5175.
No comparable provision.
party to adopt that person’s
position), so long as there is no
discussion between the person
and the candidate or committee
regarding the candidate’s
campaign plans, projects,
activities, or needs.
[§ 103]
Safe Harbor for
Endorsements/Solicitations:
Provides that a public
communication in which a federal
office candidate endorses another
federal or non-federal candidate is
not considered coordinated with
respect to the endorsement of
the federal candidate unless the
public communication promotes,
supports, attacks, or opposes the
endorsing candidate or another
candidate seeking election to the
same office. Further provides that
a public communication in which a
federal office candidate solicits
funds for another federal or nonfederal candidate, political
committee, or tax-exempt
organization is not considered
coordinated with respect to the
soliciting federal office candidate
unless the public communication
promotes, supports, attacks, or
opposes the soliciting candidate
or another candidate seeking
election to the same office.
Safe Harbor for Firewalls:
Provides that “conduct standard,”
under which coordination is
found, is not met if commercial
CRS-33
Would expressly preserve FEC
regulations, 11 C.F.R. § 109.21(g)
or (h), providing safe harbor for
endorsements and solicitations by
federal candidates and for
establishment and use of a
firewall.
[§ 103]
[§ 103]
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Would provide that direct costs
incurred by a political party for a
communication made in
connection with a federal office
campaign is not subject to the
coordinated party expenditure
limits unless the communication is
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628.
vendor, former employee, or
political committee has
established a firewall that meets
certain requirements. Safe harbor
provision does not apply if specific
information indicates that despite
firewall, information regarding
candidate or party campaign plans,
projects, activities, or needs,
which are material to the
creation, production, or
distribution of the
communication, was used or
conveyed to the person paying for
the communication. Further
provides that firewall must
prohibit flow of information
between employees or
consultants providing services for
the person paying for the
communication and those
employees or consultants
providing services to the
candidate, who is clearly identified
in the communication, or the
candidate’s opponent, or a party;
and that the firewall must be
described in a written policy that
is distributed to all relevant
employees, consultants, and
clients.
[11 C.F.R. § 109.21 (g), (h)]
Coordinated Party
Expenditure Limits
Provides limits on expenditures
by parties in connection with
federal office candidates.
[2 U.S.C. § 441a(d)]
CRS-34
[§ 104]
[§ 104]
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Would require Senate political
committees to electronically file
campaign finance reports directly
with the FEC.
Substantially similar to S. 3628.
“controlled by, or made at the
direction of” the candidate or the
candidate’s authorized committee.
[§ 104]
Electronic Filing of Senate
Campaign Finance Reports
Senate political committees file
campaign finance reports on
paper with the Secretary of the
Senate. [2 U.S.C. § 432(g)]
No relevant provision.
[§ 231]
[§ 231]
Equal Opportunities
Requirement and
Reasonable Access Rule
If a broadcaster grants
broadcasting time to a candidate
for any public office, the
broadcaster is required to afford
equal opportunities to all other
candidates for that same office,
with certain exceptions.
Does not amend current law.
Does not amend current law.
Would expand the equal
opportunities requirement to
include political parties (in
addition to candidates).
[§ 401]
[47 U.S.C. § 315(a)]
Broadcasters are required to
provide federal office candidates
with reasonable access to
broadcast stations or permit them
to purchase reasonable amounts
of broadcast time.
Does not amend current law.
Does not amend current law.
[47 U.S.C. 312(a)(7)]
Lowest Unit Charge (LUC,
also Lowest Unit Rate)
Provisions
During the 45 days preceding a
primary election or 60 days
preceding a general election,
candidate committees may
purchase preemptible broadcastadvertising time at the lowest unit
charge (LUC) applicable to a
commercial advertiser for
comparable time.
[47 U.S.C. § 315(b)]
CRS-35
Would expand the reasonable
access rule to include reasonable
amounts of time purchased at the
lowest unit charge (LUC, see
below) and makes rule applicable
to parties (in addition to
candidates).
[§ 401]
Does not amend current law.
Does not amend current law.
Would prohibit preemption of
candidate or party use of
broadcast station unless beyond
broadcaster’s control.
Would cap LUC at the maximum
amount charged for the same
amount of time sold, at any time,
during the past 180 days; would
limit LUC to the state(s) in which
the candidate is seeking election.
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Would extend LUC to purchases
by national party committees if a
covered organization spends at
least $50,000 for electioneering
communications or independent
expenditures surrounding a
federal election.
Would require random audits of
LUC functioning and require
broadcasters to make LUC
requests publicly available via the
Internet.
[§ 401]
Judicial Review
No Effect on Protections
Against Threats,
Harassments, and
Reprisals
CRS-36
The Bipartisan Campaign Reform
Act of 2002 (BCRA) provides that
if the constitutionality of the Act
is challenged, the action shall be
filed in U.S. District Court for
D.C., heard by a 3-judge court,
reviewable only by direct appeal
to the U.S. Supreme Court,
requires courts to advance on the
docket and expedite the
disposition of the action and
appeal; provides that any Member
of the House or Senate shall have
the right to intervene or bring suit
challenging the constitutionality.
Would provide that if
constitutionality of the Act is
challenged, the action shall be filed
in U.S. District Court for D.C.
and appealed to the Court of
Appeals for the D.C. Circuit; any
Member of House or Senate, who
satisfies requirements for standing
under Art. III of the U.S.
Constitution, shall have right to
intervene in any action challenging
the Act’s constitutionality; any
Member of House or Senate may
bring suit challenging the
constitutionality.
[Bipartisan Campaign Reform Act
(BCRA), P.L. 107-155, § 403]
[§ 401]
According to Supreme Court
precedent, disclosure
requirements cannot
constitutionally be required
where there is a reasonable
probability that compelled
disclosure would subject
Would provide that nothing in the
Act shall be construed to affect
any law, rule, or regulation that
waives a requirement to disclose
information relating to any person
where there is a reasonable
probability that the disclosure
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628, however would also
require courts to advance on the
docket and expedite the
disposition of the action; and
would provide that any Member
of the House or Senate shall have
the right to intervene.
[§ 501]
Substantially similar to H.R. 5175.
No comparable provision.
Major Policy Issue
Overview of Major Relevant
Provisions in Current Federal
Law
Overview of Major Provisions
in H.R. 5175 as Passed by the
House
contributors to threats,
harassment, or reprisals from
either government officials or
private parties,
would subject person to threats,
harassments, or reprisals.
Overview of Major Provisions
in S. 3628 as Introduced in
the Senate
Overview of Major Provisions
in S. 3295 as Introduced in
the Senate
Substantially similar to H.R. 5175.
Substantially similar to H.R. 5175
and S. 3628.
[§ 402]
[Buckley v. Valeo, 424 U.S. 1, 74
(1976); see also, Brown v.
Socialist Workers ‘74 Campaign
Comm., 459 U.S. 87, 93-94
(1982)].
Severability
The Bipartisan Campaign Reform
Act of 2002 (BCRA) provides that
if any provision of the Act or
application of a provision is held
unconstitutional, the remainder
the Act shall not be affected by
the holding.
[Bipartisan Campaign Reform Act
of 2002 (BCRA), P.L. 107-155, §
401]
Would specify that if any
provision of the Act or application
of a provision is held
unconstitutional, the remainder
shall not be affected by the
holding.
[§ 502]
[§ 403]
Source: CRS analysis of H.R. 5175, S. 3295, S. 3628, and current federal campaign finance law, or applicable regulations as noted.
Note: H.R. 5175, S. 3295, and S. 3628 would change the definitions of independent expenditures and electioneering communications. Thus, the terms do not have the same
meanings in all the columns. The column describing major provisions in current law uses the terms independent expenditures and electioneering communications as defined
under existing law, while the column describing major provisions in H.R. 5175, S. 3295 and S. 3628 uses the expanded definitions of the terms as set forth in the legislation.
a.
CRS-37
Under IRC § 527, an exempt function is the “influence[ing] or attempt[ing] to influence the selection, nomination, election, or appointment of an individual to a federal,
state, or local public office, to an office in a political organization, or as a Presidential or Vice-Presidential elector.” Under current law, any § 501(c) organization that
makes an expenditure for an exempt function activity is subject to a 35% tax on the lesser of its net investment income or the expenditure. An organization may avoid
the tax by setting up a separate segregated fund under IRC § 527(f)(3) to make the expenditures.
The DISCLOSE Act: Overview and Analysis
Author Contact Information
(name redacted)
Analyst in American National Government
[redacted]@crs.loc.gov, 7-....
(name redacted)
Legislative Attorney
[redacted]@crs.loc.gov, 7-....
(name redacted)
Legislative Attorney
[redacted]@crs.loc.gov, 7-....
Acknowledgments
(name redacted), Legislative Attorney, contributed to this report.
Congressional Research Service
38
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