Regulatory Change

NonProfitRegulation-MapRequiring disclosure of money spent to influence elections is on solid constitutional ground. In fact, when the Supreme Court set off this explosion in outside spending with its Citizens United ruling, it assumed all new spending authorized by the court decision would be disclosed. Unfortunately, current disclosure rules and regulations have failed to provide this level of essential transparency, in part due to the rise of political spending using nonprofit intermediaries.

Currently, corporations can hide these political contributions from the public by routing them through SuperPAC’s, non-profit groups and trade associations, who do not have to disclose donors. These groups then carry out the political actions with no traceable ties to the corporations.  To address these loopholes, regulatory reforms can be enacted at a federal, state and local level to mandate full disclosure.

Model State Regulations to Require Disclosure of Electioneering Activities by Nonprofit Organizations

The following model regulations can be implemented by state officials with responsibility for oversight of nonprofit organizations to require disclosure of electioneering activities by these organizations. This model is based upon regulations enacted in New York State by Attorney General Eric Schneiderman and is specifically tailored to states that currently require nonprofit organizations to register with a state charity bureau or other entity.   Under these rules, nonprofit groups, including 501(c)(4) social welfare organizations that are registered with the state, are required to report the percentage of their expenditures that go to federal, state and local electioneering. Groups that spend at least $10,000 to influence state and local elections in the state are also required to file itemized schedules of expenses and contributions.

♦   Click here to download (.pdf)

Proposed Rule Change at the U.S. Securities and Exchange Commission

Since 2011, a growing coalition of elected officials, organizations, institutional investors, and business leaders have  called on the U.S. Securities and Exchange Commission (S.E.C.) to develop regulations mandating disclosure of political spending at all publicly-traded corporations. As of fall 2013, more than 640,000 Americans have written to the S.E.C. in support these reforms – breaking all prior records for public comments at the S.E.C.

♦   Read the Original Rulemaking Petition submitted to the S.E.C.

♦   View Comments on SEC Corporate Disclosure Petition

Research and Relevant Reports: