Democrats sue FEC to require disclosure of campaign donors

The White House and some of its allies in the Democratic Party are pushing with increasing force to unmask corporations and individuals that secretly contribute hundreds of millions of dollars to groups that influence election campaigns.

But it’s not yet clear that the efforts could have a substantial effect on the 2012 election — or that Democrats won’t exceed Republicans in attracting undisclosed donations to their own newly formed organizations.

Even as Rep. Chris Van Hollen (D-Md.) and his pro-reform allies filed a lawsuit Thursday against the Federal Election Commission demanding donor disclosure, other Democrats were raising substantial contributions for 2012 campaign advertising. And two former White House aides have been talking of setting up their own independent group that could include a nonprofit arm to shield the identities of major donors.

The White House railed against independent campaign spending financed by secret donations in the 2008 and 2010 elections. President Obama has emphasized disclosed and limited donations of the sort he raised at events in San Francisco and Los Angeles this week.

But now there is a growing consensus that Democrats should begin their own efforts to collect large-dollar undisclosed donations, or risk defeat. 

Despite that view, the White House confirmed this week that Obama is mulling whether to issue an executive order that would require federal contractors to disclose political donations, even to nonprofit groups such as the U.S. Chamber of Commerce, which has many defense and government contractors in its membership.

A presidential order could take effect immediately, and officials at the chamber and Republicans on Capitol Hill expressed alarm Thursday about the possibility. Obama’s move underscores his unwillingness to relinquish a major line of attack he used against Republicans last fall, even as his allies are embracing similar tactics.

Campaign finance experts observing the latest maneuvers said it was unlikely that the lawsuit and appeals would be resolved before the 2012 campaign. But Fred Wertheimer, who is leading the legal team on the congressman’s behalf, maintained that it was possible to get a decision and then ask the court to order disclosure even as appeals were pending.

Republicans and Democrats agreed that a presidential order requiring disclosure by companies doing work for the government could have an immediate effect.

At the Chamber of Commerce, spokeswoman Blair Latoff condemned the proposed order, saying it could mean “prospective contractors that fund political causes unpopular with the government or the current administration may find that they don’t get a contract award due to political discrimination.”

Similar concern was raised in a letter circulated among Republican senators Thursday.

The White House proposal and the FEC litigation are similar to sections of the Disclose Act, a legislative package drafted by Van Hollen and other Democrats that failed in the last Congress. Latoff called the moves a “desperate attempt by the White House and House Democrats to resurrect the corpse of the Disclose Act.”

A lawyer who has worked for Republicans and the Chamber of Commerce, Jan Baran of the firm Wiley Rein in Washington, acknowledged that a presidential order could hinder fundraising for the 2012 election.

The various reform efforts spring from a series of Supreme Court decisions that allow unlimited corporate and union donations to independent political groups, so long as the groups are not affiliated with a specific candidate.

The lawsuit argues that concealing the identity of donors is contrary to the law and the court’s ruling.

Reformers point to the Supreme Court decision last year in Citizens United vs. Federal Election Commission. In ruling that these funds could legally go to independent groups, the majority opinion noted: “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.”

The lawsuit filed in federal district court in Washington challenges a FEC regulation adopted in 2007 as illegal because it conflicted with existing law. The suit argues that language in the Bipartisan Campaign Finance Reform Act, passed by Congress in 2002, required disclosure of donations of $1,000 or more if the donations were made for the purpose of furthering “electioneering communications.”

A separate rule-making petition filed by Van Hollen’s group asks the FEC to revise a regulation that “improperly allowed nonprofit groups to keep secret the donors” whose funds were being used to pay for so-called independent expenditures in federal elections.

Matea Gold in the Washington bureau contributed to this report.Copyright © 2011, Los Angeles Times