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Donor Disclosure

The Issue
The Supreme Court’s Citizens United decision has contributed to an unprecedented influx of money into the election process, raising questions about donor disclosure by 501(c)(4) tax-exempt organizations. A highly politicized issue, Members of Congress and the public have begun to both call for, and question, increased scrutiny of 501(c)(4) organizations that appear to be engaged in partisan political activity. Read more about political activity of 501(c)(4) organizations.

Latest News
DISCLOSE Act reintroduced
Sen. Sheldon Whitehouse (D-RI) and dozens of other Senate Democrats reintroduced the DISCLOSE Act (S. 2516) on June 24, 2014, which would require covered organizations spending $10,000 or more during an election cycle to reveal to the Federal Election Commission within 24 hours the amount and nature of expenditures exceeding $1,000 and the names of donors contributing $10,000 or more.

Background

113th Congress
On January 3, 2013 on the first day of the 113th Congress, Rep. Chris Van Hollen (D-MD) reintroduced the DISCLOSE Act (H.R. 148). As of June 2014, 83 lawmakers cosponsored the legislation.

Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) introduced the Follow the Money Act (S. 791) on April 24, 2013, legislation to require all groups, including 501(c)(4) social welfare organizations, that spend at least $10,000 on political activities to disclose the names of donors who contribute $1,000 or more. In a related measure, Representative Matt Cartwright (D-PA), a member of the House Oversight and Government Reform Committee, introduced the OPEN Act (H.R. 2670), which would limit the amount 501(c)(4) tax exempt organizations can spend on political activities to 10 percent of their total annual expenditures, or $10 million, whichever is less.

112th Congress
The DISCLOSE Act was reintroduced in the House (H.R. 4010) by Rep. Chris Van Hollen (D-MD) and in the Senate (S. 2219) by Sen. Sheldon Whitehouse. On March 29, 2012, the Senate Rules and Administration committee held a hearing on S. 2219. Click here to watch the hearing and read the testimony. 

Senator Whitehouse introduced a second version of the bill (S. 3369) on July 10, 2012, which was the version brought to the Senate floor. The Senate voted 51-44 to block consideration of S. 3369 on July 16, 2012. Click here to view the roll call results. A second vote was held the following day, which failed by a 53-45 vote.

The following is a summary of the legislation introduced in the House and Senate in the 112th Congress:  
  • H.R. 4010 – "DISCLOSE Act of 2012"
    • Introduced by: Rep. Chris Van Hollen (D-MD) on 2/9/2012, Cosponsors: 165
      • Requires that 501(c)(4)s (and corporations, unions, Super PACs, other outside groups) that spend more than $10,000 on campaign-related activity report those expenditures to the FEC within 24 hours
      • Requires that 501(c)(4)s (and corporations, unions, Super PACs, other outside groups) disclose campaign-related expenditures to their members in their periodic and annual financial reports and make their political spending available to the public through a hyper-link to the FEC on their website
      • Requires that 501(c)(4)s (and corporations, unions, Super PACs, other outside groups) identify donors who contribute $10,000 or more to the organization
      • Requires that the leader of an organization and top financial contributors be disclosed in advertisements and include an “I approve this message” disclaimer in campaign ads
      • Requires that lobbyists disclose campaign-related expenditures in conjunction with their lobbying activities
  • S. 2219 – “DISCLOSE Act of 2012”
    • Introduced by: Senator Sheldon Whitehouse (D-RI) on 3/21/2012, Cosponsors: 44
      • Requires that any group that spends more than $10,000 on campaign-related activity report those expenditures to the FEC within 24 hours
      • Requires that groups identify donors who contribute $10,000 or more to the organization
      • Requires a listing of the top five financial contributors be disclosed in advertisements and include an “I approve this message” disclaimer in campaign ads
      • Requires a statement from the head of the group ratifying that there was no coordination with any campaign, which is illegal
111th Congress
On June 24, 2010, the House of Representatives passed an earlier version of the DISCLOSE Act, which would have regulated campaign communications paid for by corporations, labor organizations, and nonprofits exempt from taxation under sections 501(c)(4), (c)(5) or (c)(6) of the Internal Revenue Code. 

Independent Sector wrote a letter to House Speaker Nancy Pelosi expressing our deep concern over the "carve out" in the House version of the bill, noting that "we would find it very difficult to support legislation that included provisions that would favor larger, generally more powerful organizations over the critical voices of smaller national, regional, state and local nonprofits. The Senate was unable to pass the DISCLOSE Act before the end of the legislative session.

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