For Campaign Transparency, Start with Federal Contractors

Somewhere in the West Wing of the White House is a draft of an executive order that has been kicking around since April. It would require companies and their officers, directors, affiliates and subsidiaries that do business with the federal government to disclose political contributions to candidates for federal office.

The order also would apply to contributions made to political parties or party committees. Further, it would apply to contributions made to independent third-party entities that spend money on electioneering activities.

President Barack Obama should get off his bus, track down this executive order and sign it. Also, he should order his campaign committee to pay for the bus.

At a time when trust in government is at a low ebb, the nation faces the prospect that nearly $2 billion will be spent on next year's presidential election — and that's just money that can be tracked to its source.

It's entirely possible that independent groups will spend another billion dollars, most of it from anonymous sources, on the presidential and congressional races. If past practices hold, most of that money will be spent on negative TV commercials.

Signing that executive order wouldn't prevent all of this, but it would prevent some of it. Koch Industries, for example, has received about $85 million in government contracts since 1999, according to government records. The Wichita, Kan.-based conglomerate sells a lot of fuel and paper products to the government.

Billionaire brothers Charles and David Koch, the largest shareholders in the privately held company, are major funders of anti-tax, anti-environmental organizations. Politico.com reports that the brothers intend to spend or steer $88 million toward various conservative causes and candidates in 2012.

Much of their money is expected to be untraceable, donated anonymously through the glaring loophole that the Supreme Court left in campaign finance laws after the Citizens United v. FEC decision in January 2010. The court ruled that corporations and labor unions had the same right as citizens to spend money on politics.

But the court clearly intended that the source of the money should be fully disclosed.

The ruling said, "With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation's political speech advances the corporation's interest in making profits, and citizens can see whether elected officials are in the pocket of so-called moneyed interests."

The justices were naive. Clever political operatives quickly realized that they could, under Section 501(c)4 of the Internal Revenue Service code, form "social welfare organizations" that were free to spend money without disclosing the source of the money. In the 2010 elections, some $132 million in anonymous money was spent on congressional and gubernatorial elections — a little less than half of all independent expenditures.

In 2010, nearly all of this money was spent backing Republican candidates. Now the Democrats — having failed to get a disclosure law through Congress — are moving to catch up. We have the phenomenon of "Super PACs" (political action committees), which can raise unlimited money under fuzzy disclosure rules as long as they stay "independent" of candidate committees.

What a disgrace. America wasn't founded by timid souls, and free speech isn't for cowards. But today, our elections could turn on money provided by people and corporations with convictions but not courage. They are a kind of non-racial version of the Ku Klux Klan, hiding under robes and hoods of anonymity.

We think Citizens United was wrongly decided, because effective political speech now belongs only to those who can afford it. But if corporations are to spend money on politics, their officers owe it to their shareholders to explain where the money goes.

Corporations that do business with the government have a special obligation to disclose where their contributions go. Indeed, federal contractors already must disclose contributions made to formal political organizations. To argue that they shouldn't have to disclose contributions made in secret to independent campaign committees only begs more cynicism and distrust in government.

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