H.R. 1338 — Introduced in House

I 113th CONGRESS 1st Session H. R. 1338 IN THE HOUSE OF REPRESENTATIVES March 21, 2013 Mr. Dingell (for himself, Mr. Conyers, Mrs. Carolyn B. Maloney of New York, Ms. DeGette, Ms. Slaughter, Mr. Ellison, Mr. Himes, Ms. Edwards, Ms. DeLauro, Mr. Polis, and Ms. Norton) introduced the following bill; which was referred to the Committee on House Administration A BILL To amend the Federal Election Campaign Act of 1971 to reassert the authority of Congress to restrict spending by corporations and labor organizations on campaigns for elections for Federal office, and for other purposes. 1. Short title This Act may be cited as the Restoring Confidence in Our Democracy Act. 2. Findings Congress finds the following: (1) Free and open elections are a founding principle of our republican form of government. (2) It is incumbent upon Congress to ensure that elections in the United States are free of corruption and the appearance of corruption. (3) The free flow of money in politics, as exemplified by the current state of affairs, is corrupting and will distort and disfigure our democracy. (4) Excessively high levels of spending on elections is fundamentally damaging to the public perception of our government, and threatens the fairness and integrity of our democracy. (5) Congress has a constitutional duty to guarantee a republican form of government for the States. (6) Spending record sums of money on our elections threatens the continued existence of our republican form of government. (7) Allowing unlimited spending on elections means the wealthy can crowd out other important voices in our political debates, thereby giving American citizens fewer sources of information. (8) Federalist 52 states that Congress ought to be dependent on the people alone. (9) Unlimited spending in our elections violates this principle and corrupts our government by making elected officials more dependent on donors than the people. (10) This dependency corruption gives the wealthy a greater say in our democracy than the average citizen, which is contrary to the intent of the Founding Fathers. (11) Congress has the inherent power to ensure that elections for the government are conducted in a fair, honorable, and proper way to preserve our democracy and ensure the people have confidence in our elections and system of government. (12) Congress has the authority to regulate campaign expenditures to promote integrity, prevent corruption, and ensure the public has trust in our election system, going back to the Tillman Act of 1907, which prohibits corporations from making direct contributions to political campaigns. (13) In 1947, Congress passed the Taft-Hartley Act, which first prohibited corporations and labor unions from making independent expenditures in support or opposition to candidates for Federal office. (14) The Watergate scandal, and the outrageous expenditure of campaign funds in that scandal, did great damage to public confidence in government and demanded a legislative response to restore this confidence. (15) Congress rewrote the Federal Elections Campaign Act (FECA) in 1974 as a response to Watergate and public calls for increased regulation of our campaign system. This law established the Federal Elections Commission (FEC) and instituted limits on campaign contributions which remain law to this day. (16) In 1976, the Supreme Court issued a decision in the case of Buckley v. Valeo which first established the principle that money equals speech, in addition to overturning FECA limitations on independent expenditures. (17) The Buckley decision also stated that The constitutional power of Congress to regulate Federal elections is well established and is not questioned by any of the parties in this case. (18) Equating money with speech can result in the wealthy having an undue influence on our elections at the expense of the great majority of the American people. (19) In 1990, the Supreme Court issued a decision in the case of Austin v. Michigan Chamber of Commerce which upheld a Michigan law banning corporations from making independent expenditures in elections. (20) In Austin, the Court found that Corporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures. (21) Austin also established that the government has an anti-distortion interest in regulating political speech. The Court held that there is a compelling government interest in preventing the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas. (22) In 2002, Congress enacted the Bipartisan Campaign Reform Act, which among other things banned political parties from raising so-called soft money. (23) Spending in presidential elections has risen to excessive levels over the last decade, which threatens not only our government, but the integrity of our elections. (24) In the 2000 presidential election, both of the major party candidates spent $343.1 million combined. This number climbed to $717.9 million in the 2004 presidential election. (25) In the 2008 presidential election, Barack Obama’s campaign spent $740.6 million, more than both major party candidates combined in the previous election. (26) Following the Supreme Court’s decision in the case of Citizens United v. FEC, there was a massive increase in outside political spending, which threatens to undermine the legitimacy of our political system. (27) The FEC estimates that $7 billion was spent on the 2012 elections. (28) According to the Wall Street Journal, so-called Super PACs spent $567,498,628 on the 2012 elections. (29) Super PACs spent $98 million during the week of October 29, 2012, alone. (30) Donations to Super PACs are dominated by the wealthy. In 2012, 58.9 percent of donations to Super PACs were $1 million or higher, and came from only 159 donors. (31) Super PACs often accept funds from nonprofits which are allowed to conceal the source of their donations, thereby avoiding transparency and greater public scrutiny of their actions and motivations. (32) Thirty-one percent of outside spending in the 2012 elections was not able to be traced to its original sources, which decreases accountability and transparency, threatens public confidence in our elected officials and our elections, and has a distorting effect on our elections. (33) Corporations, now freed to spend as much as they like to influence elections, accounted for 12 percent of contributions to Super PACS in 2012, thereby helping to give corporate interests a greater voice in our political system than the average Americans. (34) A January 2012 poll by Rasmussen says that 58 percent of Americans believe the United States needs new campaign finance laws. (35) A January 2012 poll by Democracy Corps found that 55 percent of Americans oppose the Citizens United decision. Eighty percent of voters also believe there should be limits on the money spent in campaigns. (36) An October 2012 poll by Bannon Communications Research found that 52 percent of Americans are in favor of banning corporate political spending, 89 percent of Americans believe there is too much money in politics, and 66 percent believe that money is the root of all evil in politics. (37) After considering these findings, Congress is concerned by the unfairness of unlimited spending in elections and is taking this action to protect our democracy and our electoral system. (38) Reinstituting the ban on corporate political expenditures and placing a limit on the amount of donations to Super PACs will help restore faith and trust in our democracy and will respond to calls by the American people for vigorous campaign finance reform and effective laws to protect our free democratic system of elections. 3. Prohibition of corporate and labor disbursements for electioneering communications (a) Prohibition (1) In general Section 316(b)(2) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441b(b)(2)) is amended by inserting or for any applicable electioneering communication before , but shall not include. (2) Applicable electioneering communication Section 316 of such Act (2 U.S.C. 441b) is amended by adding at the end the following: (c) Rules relating to electioneering communications (1) Applicable electioneering communication For purposes of this section, the term applicable electioneering communication means an electioneering communication (within the meaning of section 304(f)(3)) which is made by any entity described in subsection (a) of this section or by any other person using funds donated by an entity described in subsection (a) of this section. (2) Exception Notwithstanding paragraph (1), the term applicable electioneering communication does not include a communication by a section 501(c)(4) organization or a political organization (as defined in section 527(e)(1) of the Internal Revenue Code of 1986) made under section 304(f)(2)(E) or (F) of this Act if the communication is paid for exclusively by funds provided directly by individuals who are United States citizens or nationals or lawfully admitted for permanent residence (as defined in section 101(a)(20) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(20))). For purposes of the preceding sentence, the term provided directly by individuals does not include funds the source of which is an entity described in subsection (a) of this section. (3) Special operating rules (A) Definition under paragraph (1) An electioneering communication shall be treated as made by an entity described in subsection (a) if an entity described in subsection (a) directly or indirectly disburses any amount for any of the costs of the communication. (B) Exception under paragraph (2) A section 501(c)(4) organization that derives amounts from business activities or receives funds from any entity described in subsection (a) shall be considered to have paid for any communication out of such amounts unless such organization paid for the communication out of a segregated account to which only individuals can contribute, as described in section 304(f)(2)(E). (4) Definitions and rules For purposes of this subsection— (A) the term section 501(c)(4) organization means— (i) an organization described in section 501(c)(4) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; or (ii) an organization which has submitted an application to the Internal Revenue Service for determination of its status as an organization described in clause (i); and (B) a person shall be treated as having made a disbursement if the person has executed a contract to make the disbursement. (5) Coordination with internal revenue code Nothing in this subsection shall be construed to authorize an organization exempt from taxation under section 501(a) of the Internal Revenue Code of 1986 to carry out any activity which is prohibited under such Code. (6) Special rules for targeted communications (A) Exception does not apply Paragraph (2) shall not apply in the case of a targeted communication that is made by an organization described in such paragraph. (B) Targeted communication For purposes of subparagraph (A), the term targeted communication means an electioneering communication (as defined in section 304(f)(3)) that is distributed from a television or radio broadcast station or provider of cable or satellite television service and, in the case of a communication which refers to a candidate for an office other than President or Vice President, is targeted to the relevant electorate. (C) Definition For purposes of this paragraph, a communication is targeted to the relevant electorate if it meets the requirements described in section 304(f)(C). . (3) Effective date The amendments made by this subsection shall take effect immediately after the enactment of subsection (b). (b) Conforming amendment Sections 203 and 204 of the Bipartisan Campaign Reform Act of 2002 (Public Law 107–155) are repealed, and each provision of law amended by such sections is restored as if such sections had not been enacted into law. 4. Prohibition of independent expenditures by corporations and labor organizations Section 316(b)(2) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441b(b)(2)) is amended by striking includes a contribution or expenditure, and inserting includes a contribution or expenditure (including an independent expenditure),. 5. Application of contribution limits and source prohibitions to contributions made to super pacs (a) Application of limits Section 315(a) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)) is amended by adding at the end the following new paragraph: (9) For purposes of the limitations imposed by paragraphs (1)(C), (2)(C), and (3)(B) on the amount of contributions which may be made by any person to a political committee, a contribution made to a political committee which accepts donations or contributions that do not comply with the contribution or source prohibitions under this Act (or made to any account of a political committee which is established for the purpose of accepting such donations or contributions) shall be treated in the same manner as a contribution made to any other political committee to which such paragraphs apply. . (b) Effective date The amendment made by subsection (a) shall apply with respect to contributions made on or after the date of the enactment of this Act. 6. Severability If any provision of this Act or amendment made by this Act, or the application of a provision or amendment to any person or circumstance, is held to be unconstitutional, the remainder of this Act and amendments made by this Act, and the application of the provisions and amendment to any person or circumstance, shall not be affected by the holding.