Hidden Money: The Need for Transparency in Political Finance
On Monday, September 26, CED hosted a release event featuring three new reports on the role of undisclosed money in political finance. CED's Money in Politics Subcommittee Co-Chairs Ed Kangas, Chairman and Chief Executive Officer (Retired), Deloitte Touche Tohmatsu, and Landon Rowland, Chairman Emeritus, Janus Capital Group and Chairman, Ever Glades Financial released the report recommendations and urged fellow business leaders not to spend corporate resources on "independent" political organizations - and if they do, to disclose fully that fact to shareholders and the public.
A panel of business and policy experts discussed the report findings. Speakers included: Jeanne Cummings, Deputy Government Editor of Bloomberg News; Barbara Bonfiglio, Senior Corporate Counsel of Pfizer; Charles Grezlak, Vice President, Government Affairs and Policy at Merck; Tony Kavanagh, Senior Vice President, Governmental Affairs at American Electric Power (AEP); and Fred Wertheimer, Founder and President of Democracy 21.
The CED reports warn that the rollback of campaign spending and transparency reforms (strengthened in the wake of Watergate) presents a serious threat to jobs and the economy, public faith in the corporate sector, and the vitality of our democratic institutions. During the 2010 election, the first after the Citizens United decision, it is estimated that some $600 million was spent on independent political campaigns, a significant portion of which came from unknown sources. That figure is expected to skyrocket during the 2012 presidential election.
"A secret flow of hundreds of millions of dollars from companies to campaigns is bad for business's reputation, bad for innovation, bad for job growth, and bad for our democracy," said CED President Charles Kolb. "Corporate America can take the lead in the corporate campaign spending crisis by sending one message to every business, big and small: ‘Don't Give, But If You Do, Disclose.'"
The three reports, After Citizens United, Improving Accountability in Political Finance; Hidden Money: The Need for Transparency in Political Finance; and Partial Justice: The Peril of Judicial Elections, make several recommendations:
Don't Give - But If You Do, Disclose: Simply put, corporations should not contribute to third party groups. If they do, they should make contributions public and subject to board approval and oversight.
Return Democracy to the People: A robust public financing system that provides a multiple dollar public match on low-dollar donations would restore faith in democracy.
Ensure Transparency: Congress should reform laws to include disclosure of electioneering activities, including non-broadcast communications, voter registration and voter turnout expenditures that are not covered by existing regulations.
Judicial Integrity: States should end the election of judges and adopt a non-partisan, independent, commission-based system for recruiting, reviewing and recommending appointees for judgeships.
CED President Charles Kolb was a guest on MSNBC's Dylan Ratigan Show on Oct. 5. The topic was the CED effort to curb corporate funds going into political campaigns and unregulated, and unreported, "Super PAC" contributions.
- Executive Summary
- Hidden Money : The Need for Transparency in Political Finance
- After Citizens United: Improving Accountability in Political Finance
- Partial Justice: The Peril of Judicial Elections
CED's Money in Politics Initiative
CED has engaged business leaders in the effort to reform our campaign finance laws and regulations for nearly fifteen years. CED studies and recommendations regarding the role of money in politics have been cited on a regular basis in the campaign finance reform debate. CED's Trustees are deeply concerned about the corrosive impact of the increasing amount of money in the political system, on the public trust in American democracy. Increased political spending ultimately reflects poorly on the business community as well as politicians, giving the impression to many that influence in policymaking and the judiciary is "for sale." CED was the lone business-led voice urging the elimination of "soft money" and supporting the Bipartisan Campaign Finance Reform Act (BCRA). The 2010 U.S. Supreme Court ruling Citizens United v. Federal Election Commission prompted CED Trustees to renew their efforts through a multiyear Money in Politics Initiative to urge business to curtail corporate political spending, to reexamine the role for corporate boards in governance practices, and to call for disclosure legislation that reduces the amount of unlimited, undisclosed political spending.
For more information about CED's Money in Politics work, click here.