Court Ruling May Force Advocacy Groups to Disclose Secret Donors

Washington – Advocacy groups spending millions of dollars in the 2012 campaign are now faced with the prospect of having to reveal the donors who have been secretly financing their efforts after a federal appellate court panel refused to block a lower court order requiring the move.

In a 2 to 1 decision issued Monday evening, a U.S. Court of Appeals panel in Washington declined to stay a ruling by a federal judge requiring organizations that run election-related television ads to disclose their donors.

The court’s decision was a significant victory for campaign finance reform advocates who have been fighting against the deluge of secret money that has flooded the political landscape in the wake of the Supreme Court’s Citizens United ruling in 2010.

Until the appeal of the current case is decided sometime this fall, any group that runs a type of election-related ad known as “electioneering communications” will have to disclose all of its donors since the beginning of 2011.

The stakes are high for trade associations such as the U.S. Chamber of Commerce and an array of well-financed conservative nonprofit groups such as Crossroads GPS andAmericans for Prosperity that planned to pump millions of dollars more into television commercials attacking the policies of President Obama and congressional Democrats.

Election law lawyers expect most groups will now try to find alternative methods of communicating rather than reveal the sources of their funding. But just the possibility that the curtain will be pulled back to reveal who has been driving campaign-related ads has buoyed reform advocates.

“It’s the first major breakthrough in overcoming the massive amounts of secret contributions that are flowing into federal elections,” said Fred Wertheimer, president of the reform group Democracy 21. “It certainly gives us momentum.”

The case, brought by Democratic Rep. Chris Van Hollen of Maryland against the Federal Election Commission, challenged a 2007 FEC regulation that allowed limited disclosure by groups that engage in electioneering communications. Those are ads that refer to federal candidates but stop short of advocating for their election or defeat and air 30 days before a primary and 60 days before the general election.

The FEC only required advocacy groups to disclose the names of donors that gave explicitly to finance a particular ad. In his suit, Van Hollen argued that undermined the 2002 McCain-Feingold Act, a sweeping campaign finance reform law that required groups running election-related ads to reveal their funding sources, among other measures.

A federal judge agreed, ruling March 30 that the FEC had overstepped its authority.

“Congress intended to shine light on whoever was behind the communications bombarding voters immediately prior to elections,” Judge Amy Berman Jackson wrote in her decision.

Her ruling threw out the 2007 rule and reinstated a 2003 regulation that mandates that independent organizations paying for electioneering ads report all donations of $1,000 or more dating back to the first day of the preceding year.

The FEC decided not to appeal the decision, but a reversal is being sought by two advocacy groups who say the ruling infringes on their 1st Amendment right and will force them to alter their plans for the 2012 election.

On Monday, a divided appeals court panel denied their request for a stay of the rule pending their appeal. In a statement, the two judges in the majority noted that the Supreme Court endorsed public disclosure in its Citizens United decision, which allowed direct political spending by corporations.

“The public interest is best served by access to more, not less, information,” they wrote.