Secret donors should be U.S. campaign issue: lawmaker

WASHINGTON Tue Jun 26, 2012 8:04pm EDT

U.S. Representative Chris Van Hollen (D-MD), ranking Democrat on the House Budget Committee, speaks during the Reuters Washington Summit in Washington, June 26, 2012. REUTERS/Jonathan Ernst

U.S. Representative Chris Van Hollen (D-MD), ranking Democrat on the House Budget Committee, speaks during the Reuters Washington Summit in Washington, June 26, 2012.

Credit: Reuters/Jonathan Ernst

WASHINGTON (Reuters) - The influx of millions of dollars from unnamed donors to influence elections is a growing problem in U.S. politics and Democrats should make it an election issue, a senior Democratic lawmaker said on Tuesday.

Representative Chris Van Hollen, the top Democrat on the House Budget Committee, told the Reuters Washington Summit that more and more campaign advertising is coming from groups that are not required to disclose their donors' identities.

"The secret money piece is becoming a bigger part of the whole," Van Hollen said. "Voters have the right to know who's bankrolling the advertisements they're watching. It doesn't prevent one penny from being spent but it does require those monies to be disclosed."

U.S. politicians receive money from two broad types of outside spending groups: political action committees (PACs) and non-profit organizations.

Many of the non-profits fall under a specific section of tax law that identifies them as social welfare groups, allowing them to keep their donors private as long as most of their money is spent on so-called "issue ads." Unlike regular political ads, issue ads cannot use any candidate's name or image but are meant to educate the public on broad issues or positions.

Outside spending groups have already poured more than $100 million into ads for or against specific candidates, while the amount spent on issue ads does not have to be reported. That has caused uproar mostly among Democrats who are greatly outspent by Republican groups like Crossroads GPS, a non-profit run by Karl Rove, a former aide to President George W. Bush.

"I think it's important to make an issue about the fact that Republican candidates and these issue ads are being funded by secret donors. And that calls into question whose interests they're serving," Van Hollen said. "I think campaigns should do more of this."

Crossroads GPS spokesman Jonathan Collegio, speaking at the Summit on Monday, said the attention on secret donors is an ideological ruse by Democrats given that there are nearly 140,000 issue-advocacy groups across the political spectrum that do not disclose donors.

"I don't think that it's as much a question of the money as much as it is a question of the ideology," he said, noting that Democratic billionaires invested heavily in non-profits in the 2004 election cycle and the funding behind their ads in past elections had gone unreported.

"To me it's nothing new," he said of the six-figure donations marking the 2012 campaign. "It's only a more interesting piece of information because it's conservative organizations that are doing it now."

DISCLOSE ACT

Van Hollen is leading an effort in Congress to pass a new law that would require non-profit groups to disclose the names of their funders. The proposal is in response to a 2010 Supreme Court decision known as "Citizens United" that ruled corporations and unions could make unlimited political donations because political spending is a form of free speech.

Democrats are concerned that corporate and foreign interests are hiding their donations behind the non-profits' wall of non-disclosure and are pushing for passage of the DISCLOSE Act.

"It's hard to claim that the notion of disclosure is some kind of left-wing agenda which Mitch McConnell just went off the rails on in his speech," Van Hollen said, referring to the Senate Republican leader and his criticism of the DISCLOSE Act.

In a speech this month McConnell, who had said in the past that he supported "meaningful disclosure" of donors, condemned the DISCLOSE Act legislation as a violation of the right of free speech.

"It's a curious turnaround for the Republicans," said Van Hollen. "I think that they've decided to sacrifice an important principle of disclosure for what they think is going to be some short-term benefit that they will gain from the secret money flowing into these elections."

While several Republicans have said privately that they support Van Hollen's legislation, they are unable to endorse it publicly because of the Republican leadership's opposition, the lawmaker said.

Guy Cecil, the executive director of the Democratic Senatorial Campaign Committee, said he was concerned that a few rich people could spend so much money influencing the election without being held accountable.

"It is unquestionable that the other side, and in particular a handful of billionaires, are trying to buy the election," said Cecil who effectively runs the Senate-focused fundraising arm of the Democratic party.

"Their way of doing it is to funnel money through groups that don't disclose (donors) or if they do disclose, none of these ads are required to say who's actually paying for them," Cecil said at the Summit on Tuesday.

Follow Reuters Summits on Twitter @Reuters_Summits

(Additional reporting by Alexander Cohen. Editing by Christopher Wilson)