Trump's and the Koch Brothers' War on Disclosure

(AP Photo/Carolyn Kaster)

President Donald Trump salutes as he boards Air Force One on, July 20, 2018, en route to Trump National Golf Club in Bedminster, New Jersey.

The Treasury Department’s recent move to expand the cloak of secrecy that shrouds political “dark money” groups has triggered understandable outcry from watchdogs and Democrats worried about foreign interference in U.S. elections. Under the new rules, nonprofits that spend money on elections are no longer required to share the names of their big donors with the Internal Revenue Service.

Montana Governor Steve Bullock, a Democrat, has sued the Trump administration on the grounds that Treasury violated procedural rules when it loosened the nonprofit reporting requirements. Montana Democratic Senator Jon Tester introduced a bill to reverse the Treasury directive, citing a “threat to our democracy.” Democracy 21 President Fred Wertheimer blasted Treasury for opening a “massive loophole for foreign money” just as evidence of Russian political meddling piles up.

But the Treasury directive, while appallingly timed, is just one part of a much broader assault on campaign-finance disclosure led by super-rich conservative donors and activists, most notably the billionaire industrialists Charles and David Koch. Koch-funded nonprofit advocacy groups such as Americans for Prosperity have not only spent hundreds of millions on elections without having to report any of it, they’ve also spent generously to squelch any state or federal initiative that would force their activities into the open.

Now the right-wing “dark money” establishment is poised to score one of its biggest victories yet with the likely confirmation of Judge Brett M. Kavanaugh to the Supreme Court. Kavanaugh’s record “raises concerns he would vote to strike down disclosure laws, putting him to the right of Justice Kennedy,” warns a brief released by the Campaign Legal Center and Demos. Americans for Prosperity has announced a “seven-figure” lobbying campaign to seat Kavanaugh, part of a pro-Kavanaugh spending blitz that also will include $1.4 million from the conservative Judicial Crisis Network.

Kavanaugh’s “unsettling” record on democracy includes his position that money is “absolutely” the equivalent of speech, argues the CLC/Demos brief, which also points to a string of his rulings that favored loosening campaign-finance regulations. Of particular concern, the brief warns, is his extremely narrow interpretation of the federal ban on foreign political contributions in a 2012 case known as Bluman v. Federal Election Commission.

While Kavanaugh upheld the foreign money ban in Bluman, he went out of his way to stress that it applies only to political messages that expressly advocate voting for or against a candidate, and not to issue messages that focus on candidates but avoid trigger words such as “vote.” That would leave out a huge swath of the social media ads at the heart of the coordinated, multimillion-dollar Russian campaign to interfere with the 2016 presidential race uncovered by Special Counsel Robert Mueller.

If confirmed, Kavanaugh could prove pivotal in a host of disclosure-related legal fights that are unfolding at the state level and wending their way up to the Supreme Court. Since the high court’s Citizens United v. FEC ruling in 2010, political spending by outside groups has exploded in both federal and state elections, much of it in the form of “dark money” spending by tax-exempt “social welfare groups” and trade associations that operate outside the campaign-finance disclosure rules.

Democrats on Capitol Hill have fought back with the Disclose Act, which could not pass the GOP Congress, but which reform advocates nevertheless reintroduced this year amid rising concern over foreign money. State and municipal officials have also fought back with laws and ballot measures aimed at forcing politically active nonprofits to identify their donors, but they’ve run into a wall of opposition, often funded by the Kochs and their allies. From Arizona to California, New Mexico and South Dakota, disclosure laws and ballot initiatives have been reversed, blunted or tangled in court as a result of right-wing attacks.

“The opponents of these [disclosure] laws are well aware of the way they check the influence of the wealthy, the deep-pocketed, and the powerful,” says Tara Malloy, senior director of appellate litigation and strategy at the Campaign Legal Center.

Conservatives argue that the federal and state disclosure proposals on the table violate the First Amendment, trample on the constitutionally protected right to petition the government, and would invite harassment and intimidation of the donors if their identities were revealed. Advocates of the disclosure rules counter that they are narrowly tailored to target big contributors only, and help ensure that nonprofits do not become conduits for foreign money.

Such foreign contributions will be a lot harder to trace under the Treasury Department’s new rules, which were pushed aggressively by Americans for Prosperity and other Koch allies. Nonprofits already are free to raise anonymous contributions, but under the old rules they at least had to report to the IRS the names of donors giving $5,000 or more. Under the new rules, which apply to social welfare groups and trade associations but not to charities, the names of big donors may remain secret even from the IRS.

Incredibly, the rules change came just as Trump was exonerating Russian President Vladimir Putin of election interference, and on the very day of Maria Butina’s arrest as an alleged Russian agent, amid charges that she attempted to infiltrate the National Rifle Association—a group that just happens to be the nation’s top “dark money” political spender, with $35 million in secret expenditures in 2016. From the statehouses to the highest courts, conservatives will apparently stop at nothing to keep such spending secret—despite broad bipartisan support for full campaign disclosure. The timing of the rules change couldn’t be more preposterous.

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