Thread: A Surprising Solution to America's Dark Money Problem

A Surprising Solution to America's Dark Money Problem

Corporations may hold the key to cleaning up political spending.


In corporations we trust?

By Bruce F. Freed and Karl J. Sandstrom
July 18, 2014 | 4:30 p.m. EDT

Our existing system for disclosure of money in politics is imploding. Yet hope for more sunlight is coming from what many would consider an unexpected quarter: corporate America. In recent years, many of the nation’s leading public companies have announced their opposition to secret political spending. By standing up for sunlight and adopting public disclosure policies, they are building the foundation for a new route to political disclosure.

We believe that given the collapse of established political disclosure systems, the growing number of companies voluntarily adopting disclosure has created a new standard. It is reasonable and useful that public officials should make this standard universal.

Here are the latest numbers: Almost 70 percent of the top 200 companies in the S&P 500 disclose publicly their direct political spending, according to a nonpartisan index. They include Merck, Microsoft, Exelon, Qualcomm, CSX, Noble Energy, Wells Fargo and Intel. This past April, cable giant Comcast Corp. agreed to disclose its political spending with corporate dollars. These companies represent a cross-section of American business, and they are acting independently to create a culture of transparency and accountability.

[GALLERY: Cartoons on the Economy]

More of these companies also are disclosing their payments to trade associations and to other tax-exempt groups that are used for political purposes. In doing so, these companies are leading the way in pulling back the veil on increasingly popular, and threatening, “dark money” in America. The money is dubbed “dark” because trade associations and so-called “social welfare” organizations aren’t required to reveal their contributors.

Why are scores of companies disclosing? They understand the perils of secret political money. The risks include damage to a company’s reputation; the potential for politicians to shake down a company; and the chance that a company will lose control over an “outsourced” payment that ends up supporting political activity in conflict with the company’s values or business objectives. Corporations also understand that secret political spending threatens market openness, a prerequisite for a dynamic, growing economy.

These companies are rejecting the advice of Washington insiders who contend transparency is anti-business. Many of the companies also are adopting accountability through board oversight of political spending.

By showing how disclosure and accountability can work, these corporations are providing a functioning model for the kind of governance mechanism that the Supreme Court has suggested as an antidote to political corruption.

A dangerous disconnect is at work here. The court has affirmed that disclosure is critical to policing corruption in our democracy. Yet its rulings have assured that huge sums of money in politics are no longer traceable. It’s hard to imagine a system more suited to hiding political shakedowns and payola.

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Here’s why: When the public is kept in the dark about anonymous spending, the deep-pocketed groups that pay out political millions are free to whisper to elected officials the identity of their donors, as well as the identity of those who declined to ante up.

Meanwhile, there’s no mistaking the exploding scope of dark money in U.S. politics. It totaled more than $300 million in the 2012 election cycle, coming from trade associations and “social welfare” groups, some of them associated with powerful political figures.

Dark money also is increasingly integral to state elections. Recent headlines tell how prosecutors in Wisconsin charted entire rivers of dark money channeled illegally through nonprofits to influence the state recall elections. In Utah’s GOP primary, out-of-state payday lenders secretly financed a new nonprofit group to support their preferred candidate for attorney general, apparently with his participation.

[READ: One Corporation, Under Law, Indivisible]

Unfortunately, efforts in Washington to bring more sunlight have fallen victim to partisan gridlock and timid regulators. Such inaction increases the risk that secret political money poses to our democracy, investors and companies.

That’s why we turn for an alternative to forward-thinking business leaders who have identified the danger of dark money and who have acted to defuse it. They seek to avert a potential crisis. With their track records and credibility, these corporate leaders can make the most compelling case for universal, uniform campaign finance disclosure.

Then, if government officials keep balking, business leaders should continue steps to make disclosure a corporate governance standard applicable to all companies. Doing anything less would be harmful for business and for our country.

http://www.usnews.com/opinion/articl...ors_picks=true

This reads like a corporate propaganda piece. What does anyone know about the authors?

Originally Posted by kevinssdad

This reads like a corporate propaganda piece. What does anyone know about the authors?

Bruce F. Freed

Bruce F. Freed is President and a founder of the Center for Political Accountability. In addition to heading the Center, he is a member of the advisory board of the Zicklin Center for Business Ethics Research at the University of Pennsylvania's Wharton School and Transparency International–USA’s Policy Advisory Council.

Mr. Freed brings over 30 years of experience in politics, strategic public affairs and journalism. As the business and politics columnist from 1998 to 2003 for The Hill, a newspaper that covers Congress, he was the first to explore the implications of the absence of transparency and accountability in corporate soft money giving. Mr. Freed also commented on business and politics on Public Radio International's Marketplace.

He spent a decade on Capitol Hill as chief investigator for the Senate Banking Committee, staff director of a House subcommittee, and a senior aide to two members of the House leadership. Mr. Freed began his career as a journalist with the Baltimore Sun Papers, Congressional Quarterly and Wall Street Journal.

http://www.politicalaccountability.n.../i/240/pid/240

Karl J. Sandstrom
Senior Counsel

Profile | News / Publications

Karl Sandstrom is a nationally recognized authority on the regulation of political activity. He represents clients before federal and state courts, administrative agencies and legislative bodies in matters arising ethics and lobbying, campaign finance, communication, corporate governance, civil service and tax law. He writes and speaks frequently on the subject of governmental regulation of the political process. His articles have appeared in national publications including the New York Times and the Washington Post. He has appeared on national television and radio programs including Good Morning America, CBS News, National Public Radio and the PBS Newshour.

He has testified before House and Senate Committees of the U.S. Congress. He is a regular speaker at conferences and programs examining how government regulates politics, lobbying and campaign financing.

Professional Leadership

• Washington College of Law, American University, Adjunct Professor of Law, present
• Zicklin Center for Business Ethics Research, Wharton School of Business, Board of Advisors, present

Related Employment

• Federal Election Commission, Washington, D.C., Commissioner, 1998 - 2002
• U.S. Department of Labor, Administrative Review Board, Washington, D.C., Chairman, 1994 - 1998
• Association of State Democratic Chairs, Washington, D.C., General Counsel, 1992 - 1993
• American University, Washington, D.C., Adjunct Professor, 1989 - 1993
• U.S. House of Representatives, Subcommittee on Elections, Washington, D.C., Staff Director, 1988 - 1992
• U.S. House of Representatives, Speaker's Task Force on Electoral Reform, Washington, D.C., Staff Director, 1989 - 1991
• Democratic National Convention, Rules Committee, Washington, D.C., Staff Director, 1988
• U.S. House of Representatives, Committee on House Administration, Washington, D.C., Deputy Chief Counsel, 1979 - 1988
• Democratic National Committee, Washington, D.C., Counsel, 1977 - 1979

http://www.perkinscoie.com/ksandstrom/