Today, the Campaign Legal Center filed a complaint with the Federal Election Commission (FEC) over apparent illegal in-kind contributions made by Restore Our Future, Inc. to presidential candidate Mitt Romney.  According to multiple press reports, the Romney-linked Super PAC is paying to air television advertisements originally produced and aired by Romney’s unsuccessful 2008 presidential campaign.  Such an action would constitute a violation of the law.

Late last week, Restore our Future reportedly made an extensive ad buy to air a Romney campaign television ad.  Under FEC regulations, financing the republication of any campaign materials prepared by a candidate, or an agent of the candidate, “shall be considered a contribution for the purposes of contribution limitations” of the person or group making the expenditure.  Super PACs like Restore Our Future, however, are prohibited from contributing to candidates.

“Restore Our Future’s expenditure to republish a Romney campaign ad is considered a contribution from the Super PAC to the Romney campaign under FEC regulations, but Super PACs are prohibited from contributing to candidates,” explained Campaign Legal Center counsel Paul S. Ryan.  “The airing of these ads constitutes a clear violation of federal law by the shadow campaign committee Restore Our Future.”

To read the full complaint, click here.

Super PACs supporting presidential candidates continue to take in six- and seven-figure contributions from individuals who also have given the legal maximum to the candidate's campaign committee.

During 2011, the super PAC supporting GOP presidential candidate Mitt Romney pulled in contributions from 172 individuals who also gave the legal maximum to Romney's campaign -- 84 percent of Restore Our Future's 205 donors.

The double-givers included five individuals who gave $1 million to the super PAC: hedge fund titans Paul Singer, John Paulson and Julian Robertson, homebuilder Bob Perry and former Bain executive Edward Conard, according to a new analysis by the Campaign Legal Center, Democracy 21 and the Center for Responsive Politics.

On the other side of the aisle, the figures were less dramatic: 15 of the 55 individuals who donated to Priorities USA, the pro-Barack Obama super PAC formed by two of his former aides, maxed out to Obama’s campaign committee. Those 15 include Jeffrey Katzenberg, co-founder of DreamWorks Studios, who gave $2 million to Priorities USA.  The number of people giving to both committees could increase now that Obama has given his blessing to the super PAC's efforts, reversing his earlier stance.

Individuals are permitted to give $2,500 to a candidate for the primary season, and another $2,500 for the general election. For the purpose of this report, a donor is considered to have given the legal maximum if he or she has donated at least $2,500 to a presidential hopeful.

The U.S. Supreme Court’s 2010 decision, Citizens United v. Federal Election Commission, followed by an appellate court decision in the case SpeechNow v. FEC, led to the formation of super PACs, which are allowed to raise unlimited amounts of money from practically any source – individual, corporate or union. They can spend the money on ads and other activities that support or oppose candidates, as long as they don’t coordinate their expenditures with a candidate’s campaign or give the money directly to someone running for office.

“Recent announcements by the Obama and Romney campaigns that high-level campaign staff will be appearing at super PAC fundraising events make clear that these super PACs are simply shadow candidate committees set up to evade the $2,500 candidate contribution limit,” said Paul S. Ryan, FEC Program Director at the Campaign Legal Center. “Million-dollar contributions to the super PACs pose just as big a threat of corruption as would million-dollar contributions directly to candidates.”

"For most of these donors, $2,500 seems to be an almost insignificant amount compared to what they're contributing to the super PACs associated with the candidates," said Sheila Krumholz, executive director of the Center for Responsive Politics. "Giving to the candidate is almost a perfunctory act on the way to giving a really substantial amount to a super PAC" that then will spend the money to help the candidate.

“Presidential candidate-specific super PACs are simply vehicles for circumventing the candidate contribution limits which were enacted to prevent the corruption of federal officeholders and government decisions,” according to Democracy 21 President Fred Wertheimer. “The findings of this study, showing that 84 percent of itemized donors to the pro-Mitt Romney super PAC also gave the maximum legal contribution to the Romney presidential campaign, bear that out," Wertheimer said.

Americans for Rick Perry received donations from 11 individuals who had also given the legal maximum to the Texas governor, out of 22 contributors to the super PAC. However, 32 of the 42 contributors to the larger super PAC that was in Perry's corner, Make Us Great Again, came from the universe of donors who had maxed out to Perry in 2011. Perry dropped out of the race in January.

And five of the 18 individual donors to Winning Our Future, the largest super PAC that is backing Newt Gingrich, had topped out their giving to Gingrich for the primary season, including two who gave the maximum to the former House speaker for the general election as well as the primaries. These numbers don't include casino magnate Sheldon Adelson and his wife, who reportedly gave $10 million to the pro-Gingrich super PAC in January so were not captured in the year-end report. Adelson and his wife maxed out to Gingrich's primary campaign last August.

Nine of Red, White & Blue PAC's 14 individual donors last year maxed out to the campaign committee of the group's favored candidate, Rick Santorum. Endorse Liberty, the super PAC supporting Ron Paul, received just one contribution from someone who had hit the limit on donations to the Paul campaign. Of course, the group had only four individual donors. For another super PAC backing the Texas congressman, Santa Rita Super PAC, the figure was four out of seven.

To read the full analysis, click here.

Today, the Campaign Legal Center, and a coalition of reform groups, called on House Members to cosponsor the DISCLOSE 2012 Act (H.R. 4010), a measure that seeks to ensure that voters know where the funding originates for hundreds of millions of dollars in secret political spending. The legislation, introduced by Rep. Chris Van Hollen (D-MD), is a stripped-down version of DISCLOSE Act focused solely on disclosure provisions.

“This bill is a well-crafted and substantive response to the changed landscape resulting from Citizens United and other court decisions, and it merits bipartisan support,” said Meredith McGehee, Campaign Legal Center Policy Director.  “The bill addresses the concerns raised by critics of the DISCLOSE Act in 2010 and deals purely with disclosure of political spending which Americans overwhelmingly support and which the Supreme Court has repeated endorsed. While addressing criticisms does not always mean legislation gets passed in Washington, we remain hopeful that this new bill rises above the partisan bickering that has engulfed the 112^th Congress.  Citizens deserve to know who is spending millions of dollars to buy influence in Washington.”

The DISCLOSE Act of 2010 introduced in the last Congress contained a number of non-disclosure items which proved controversial enough that the legislation which passed in the House fell one vote shy of the 60 required to break a filibuster in the Senate.

The groups signing onto the letter with the Campaign Legal Center include: Americans for Campaign Finance Reform, the Brennan Center for Justice, Citizens for Responsibility and Ethics in Washington, Common Cause, Democracy 21, the League of Women Voters, People For the American Way, Public Campaign, Public Citizen and the Sunlight Foundation.

The full text of the letter follows below.

February 15, 2012

Dear Representative,

Our organizations strongly support the DISCLOSE 2012 Act introduced last week by Representative Chris Van Hollen. 

This legislation provides essential new disclosure requirements to cover the hundreds of millions of dollars in secret contributions being injected into federal elections by non-profit groups and other entities. The legislation also ensures that there will be timely disclosure by Super PACs.

We strongly urge you to co-sponsor and support this legislation.

The organizations include:

It is a cardinal rule of campaign finance laws that citizens are entitled to know the identity of, and amounts given by, the donors who are funding campaign expenditures to influence their votes.

This fundamental right to know has been long recognized in disclosure laws passed by Congress and in decisions by the Supreme Court upholding the constitutionality of these laws.

Polls show the public overwhelming supports disclosure for candidate campaigns and outside spending groups. According to a New York Times article on a New York Times/CBS News poll released on October 28, 2010, Americans overwhelmingly, "favor full disclosure of spending by both campaigns and outside groups."

The 2010 Supreme Court decision in Citizens United combined with ineffective FEC disclosure regulations opened gaping loopholes in the campaign finance disclosure laws.

The Van Hollen bill closes these loopholes. It also provides effective disclosure for the recently created Super PACs which are playing a dangerous new role in our elections as a result of the Citizens United decision and a subsequent decision by the D.C. Circuit Court of Appeals in the SpeechNow case.

Unlike the DISCLOSE Act of 2010, the new DISCLOSE 2012 Act focuses solely on disclosure requirements. It does not contain any of the nondisclosure provisions that were in the 2010 legislation, such as the restrictions on expenditures by government contractors. And unlike the 2010 legislation, the bill does not contain any special exceptions for any group.

With the new Van Hollen bill, the choice for members of Congress is clear and straight forward: do you support disclosure to provide citizens with basic information they have a right to know or do you support secret money being spent to influence our elections? 

The new legislation would ensure that citizens know on a timely basis the identities of the large donors who are funding campaign expenditures by tax-exempt organizations. The legislation would also fix the problem of untimely disclosure of the donors to Super PACs supporting presidential candidates. This problem arose in the 2012 Republican presidential nominating process when the disclosure of most of the Super PAC donors did not occur until after the critical Iowa caucus and New Hampshire, South Carolina and Florida primaries were over.

The new legislation also requires Super PACs and other “independent” spending entities that run broadcast ads to identify, and disclose the amounts being given by, their top five donors in each TV ad, either by listing the information in the ad or by running a crawl with the information. The bill also requires the top official of the group to appear in each TV ad and take responsibility for it.

The Citizens United decision striking down the ban on corporate expenditures in federal campaigns has done enormous damage to our political system. But even in this decision, the Supreme Court by an 8 to 1 vote made clear that laws requiring outside groups to disclose their campaign expenditures and the donors financing them are constitutional and necessary.

The Court stated:

The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way.  This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.

Citing the landmark Supreme Court decision in Buckley v. Valeo, the Court stated that disclosure is justified based on “a governmental interest in ‘provid[ing] the electorate with information’  about the sources of election-related spending.”  The Court noted the problem of independent spending groups running campaign-related ads “while hiding behind dubious and misleading names.”

There is no legitimate policy basis or constitutional basis for a member of the House to oppose the DISCLOSE 2012 Act. Opposition to this legislation in the face of overwhelming public support for campaign finance disclosure can mean only that an opponent believes large donors seeking to influence federal elections should be kept hidden from the American people.

We strongly urge you to co-sponsor the Van Hollen bill and to take all steps necessary to help ensure that it is considered on the House floor and passed in 2012.

Americans for Campaign Reform          Democracy 21
Brennan Center for Justice                    League of Women Voters,
Campaign Legal Center                         People For the American Way
Citizens for Responsibility                      Public Campaign        
and Ethics in Washington                      Public Citizen             
Common Cause                                     Sunlight Foundation

Today, the Campaign Legal Center, as part of a broad coalition of organizations, called on the Senate Banking Committee to hold hearings on the need to increase corporate disclosure and accountability to shareholders with relation to corporate political spending in the aftermath of the Supreme Court’s Citizens Uniteddecision.  

The letter cites the fourfold spike in political spending in federal election by outside groups, funded largely by corporate interests, between the 2006 and 2010 midterm elections.  The early signs of corporate attempts to sway the 2012 presidential cycle are even more ominous.

“Two years after the Citizens United decision, shareholders remain in the dark while a flood of corporate political spending plays an increasingly disproportionate role in picking winners and losers in our elections,” said Meredith McGehee, Campaign Legal Center Policy Director.  “The staggering amounts of money spent by outside groups in the midterms elections – which saw more than $22 million spent in the Colorado Senate race alone – shook public confidence in our democratic process.  All early indicators for 2012 point toward an even more extensive erosion of public confidence in the system and by extension public trust in Congress which has already fallen to its lowest point ever.”

The letter urges the committee to hold hearings this year to send a clear signal that it is willing to hold management accountable to stockholders and ensure that “political spending decisions are made transparently and in pursuit of sound business goals” for the  for the good of the market and of our democracy.

The full text of the letter follows below.
 
February 14, 2012
 
The Hon. Tim Johnson (D-S.D.)
The Hon. Richard Shelby (R-Ala.)
The Hon. Jack Reed (D-R.I.)
The Hon. Michael Crapo (R-I.D.)
Banking, Housing and Urban Affairs Committee, and
Securities, Insurance, and Investment Subcommittee
 
U.S. Senate, SD-534
Washington, D.C. 20510

RE:     Hearing Request: Corporate Governance Solutions to Citizens United

Dear Chairman Johnson and Ranking Member Shelby,

We are writing to request that the Senate Banking Committee hold a hearing this year on the need to increase disclosure and accountability to shareholders around corporate political spending to mitigate the damage done to our nation by the Supreme Court’s decision in Citizens United v. Federal Election Commission.

Americans have become increasingly unhappy with the impacts of the unrestricted corporate and special interest money influencing our political system.  In fact, 92 percent of the American people believe that the extent of corporate influence on our political system is a problem.  Only one month after the Citizens United decision, polling revealed that about eighty percent of Americans of all partisan persuasions disagreed with the ruling. 

The Supreme Court’s decision to give corporations the right under the First Amendment to spend unlimited funds from their corporate treasuries to support or attack candidates is troubling for several reasons.

In the electoral arena, this decision has brought a flood of new money into elections, ratcheting up the cost of campaigns and increasing the time and resources needed for fundraising. Spending by outside groups funded largely by corporate interests and intended to influence the 2010 elections, was more than four times as high than in 2006, the last mid-term cycle. The ads funded by unaccountable corporate interests fueled massive partisan attacks that helped to shape the election cycle. The spending that we are already seeing in the 2012 cycle through SuperPAC and other conduits is even more shocking.

In the legislative arena, the mere threat of corporate political spending gives corporate lobbyists a large new club to wield when negotiating with lawmakers, and makes it harder for legislators to vote their conscience.

In corporate governance, there are no rules or procedures established in the United States to ensure that shareholders – those who actually own the wealth of corporations – are informed of, or have the right to approve, decisions on spending their money on politics.

Corporate disclosure and the raised voices of shareholders can help provide a framework to rein in some of the damage to our democracy in this troubling new political landscape.

Senator Menendez and 12 colleagues, four of whom are also on the Senate Banking Committee, have introduced legislation that would give shareholders a voice in the process of how their company’s money is spent—The Shareholder Protection Act S.1360.

In addition a petition has been filed at the SEC calling on that agency to create rules dealing with political spending by publicly traded corporations. Over 25,000 comments have been filed in support of the petition. The SEC should move forward creating these rules quickly, as responsible corporate governance requires the involvement of informed shareholders.

We urge the Senate Banking Committee to use this next session of the 112thCongress to advance the discussion around shareholder empowerment in the wake of a seemingly endless flood of corporate money in our elections.

Holding management accountable and ensuring that political spending decisions are made transparently and in pursuit of sound business goals is important for both the market and for democracy.

Sincerely, 

Campaign Legal Center
Center for Corporate Policy
Chesapeake Climate Action Network
Citizen Works
Citizens for Responsibility and Ethics in Washington
Coalition for Accountability in Political Spending (CAPS)
    CAPS Members Include:
    Public Advocate Bill de Blasio, New York City
    Governor Pat Quinn, State of Illinois
    State Treasurer Janet Cowell, North Carolina
    State Comptroller Tom DiNapoli, New York
    State Treasurer Bill Lockyer, California
    State Treasurer Rob McCord, Pennsylvania
    City Controller Wendy Greuel, Los Angeles
    Representative William A. Current, Sr., North Carolina House of
    Representatives
    Representative James Pilliod, NH House of Representatives
    County Commissioner Toni Pappas, Hillsborough County, NH
Coffee Party USA
CtW Investment Group
Democracy 21
Democracy for America
Demos
Greenpeace
International Brotherhood of Teamsters
League of Conservation Voters
Main Street Alliance
Massachusetts Laborers
National Consumers League
Nell Minnow, board member GMI ratings
New Progressive Alliance
NorthStar Asset Management, Inc.($160 million AUM)
People For the American Way
Public Campaign
Public Citizen
Sean H. Webb-Trustee-Marin County employees' Retirement Association
Social Equity Group
State Treasurer Denise Nappier, Connecticut
Sunlight Foundation
The Laborers’ International Union of North America (LiUNA)
U.S. Public Interest Research Group
West Virginia Citizen Action

The new DISCLOSE Act of 2012 introduced yesterday by Rep. Chris Van Hollen (D-MD) is a serious measure that merits bipartisan support.  By stripping out provisions that in the last Congress gave cover to those who oppose transparency, Rep. Van Hollen has presented the 112^th Congress with a strong measure that both Democrats and Republicans should support, regardless of the partisan messaging that accompanied its introduction.

It is worth noting that in the Citizens United decision, the Supreme Court upheld the constitutionality of disclosure.  Justice Kennedy’s 8-1 majority opinion, spanning the philosophical wings of the Court, said on this point:  “The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way.  This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

Justice Kennedy’s majority opinion also made clear that it is generally constitutional to require disclosure of the sources of funding for spending in elections, whether or not that spending “expressly advocates” the election or defeat of a federal candidate.  The 8-member majority rejected the notion that disclosure requirements should be limited to “express advocacy,” and noted that the Supreme Court had, in a variety of contexts, upheld disclosure requirements that covered constitutionally protected acts, such as lobbying.  Justice Kennedy also said that disclosure of the sources of funding of political advertising “provide[s] the electorate with information” and “insure[s] that the voters are fully informed about the person or group who is speaking.”  Further, Justice Kennedy made clear that the “[i]dentification of the source of the advertising may be required as a means of disclosure, so that the people will be able to evaluate the arguments to which they are being subjected.”  The Supreme Court has stood firmly behind disclosure for decades, explaining in the seminal 1976 campaign finance decision Buckley v. Valeo, for example, that “disclosure requirements deter actual corruption and avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity.”

Because the DISCLOSE Act of 2012 follows these guidelines faithfully and is stripped of the exemptions that weighed it down last Congress, every Member of the U.S. House should cosponsor the bill expeditiously.

Justice Antonin Scalia, no friend of campaign finance regulation, has made clear that he views disclosure as essential.  In the oral argument of Citizens United, he told the plaintiff’s lawyer, “You know, you can’t run a democracy this way, with everybody being afraid of having his political positions known.”  Then shortly thereafter in Doe v. Reed (concerning the disclosure of names on a ballot-referendum petition), Justice Scalia made a strong case in favor of robust disclosure: “There are laws against threats and intimidation; and harsh criticism, short of unlawful action, is a price our people have traditionally been willing to pay for self-governance.  Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed.  For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously (McIntyre) and even exercises the direct democracy of initiative and referendum hidden from public scrutiny and protected from the accountability of criticism.  This does not resemble the Home of the Brave.”

In three separate letters today, the Campaign Legal Center and other reform groups urged the House pass the “Stop Trading on Congressional Knowledge” (STOCK) Act, banning congressional insider trading, and emphasized the importance of retaining anti-public corruption measures from the Senate version of the bill passed last week.

The first letter urged Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) to allow a vote on the version of the STOCK Act (S. 2038) passed last week by the Senate by a vote of 96-3.

The second letter, sent to the full House strongly supporting passage of Senate version of the STOCK Act, “makes clear that the laws against insider trading apply to Congress and those who do business with Congress. The legislation also establishes real-time disclosure requirements for trading activity by members of Congress and the Executive Branch and closes major loopholes in the crucial honest services fraud statute and the gratuities statute so that important anti-corruption laws can again be effectively enforced.”

The third letter, sent to all Members, stressed the importance of the anti-public corruption measures included in the Senate version of the bill.  The provisions seek to fix the flaws in the laws governing illegal gratuities (the giving of gifts to public officials in order to curry favor) and honest services (a scheme to defraud the government through unethical conduct).   A freestanding bill with similar provisions has already been unanimously approved by the House Judiciary Committee.

“Passing the STOCK Act, including the anti-corruption measures, would represent a significant gesture by Congress to the American people to say that ‘we hear you, we do not believe we are above the law, and we are making an effort to hold ourselves accountable,’” said Meredith McGehee, Campaign Legal Center Policy Director.  “Public trust of Members of Congress has sunken below used car salesmen, telemarketers and lobbyists in national polls, and it is time for Congress to enact strong measures like the STOCK Act in order to begin to restore America’s faith in its elected officials.” 

A Gallup poll released late last year found that sixty-four percent of Americans rated the honesty and ethical standards of Members of Congress as "low" or "very low," equaling the record "low"/"very low" rating for any profession since Gallup began this ranking in 1976.  The record low rating matched by Congress was previously held exclusively by lobbyists in a 2008 poll.  To view the Gallup poll,click here.

Citizens for Responsibility and Ethics in Washington, Common Cause, Democracy 21, League of Women Voters, OMB Watch, Project On Government Oversight, Public Citizen, Sunlight Foundation and U.S. PIRG.

The full text of all three letters follows below.

February 6, 2012

The Hon. John Boehner (R-Ohio)                                                       
Speaker of the House
U.S. House of Representatives
The Hon. Eric Cantor
Majority Leader
U.S. House of Representatives

Dear Speaker Boehner and Majority Leader Boehner,

Enclosed is a letter our organizations have sent to all House Members expressing our strong support for voting on and passing the Senate-passed STOCK Act and sending it immediately to President Obama for his signature.  

As you know, the Senate passed this legislation last week by an overwhelming bipartisan vote of 96 to 3. President Obama has made clear he will sign the STOCK Act as soon as it reaches him.

The organizations include Campaign Legal Center, Citizens for Responsibility and Ethics in Washington, Common Cause, Democracy 21, League of Women Voters, OMB Watch, Project On Government Oversight, Public Citizen, Sunlight Foundation and U.S. PIRG.

In the event you are not willing to schedule the Senate-passed bill for a vote, we strongly urge you to schedule for a House floor vote the bipartisan House version of the STOCK Act, H.R. 1148, sponsored by Reps. Timothy Walz (D-MN) and Louise Slaughter (D-NY) and co-sponsored by 279 House members, or nearly two-thirds of the House.  Absent your willingness to provide the House with the ability to vote on the Senate-passed bill, it is essential that the House have the opportunity to vote on H.R. 1148.

Important provisions added on the Senate floor to strengthen the legislation should also be in order as amendments to H.R. 1148, including the legislation fixing the honest services and gratuities statutes, sponsored in the House by Representatives James Sensenbrenner (R-WI) and Mike Quigley (D-IL) and unanimously reported out by the House Judiciary Committee.

We strongly urge you to take steps to promptly provide the House with the opportunity to vote on the Senate-passed STOCK Act. If you are not willing to do this, we strongly urge you to schedule the House STOCK Act, H.R. 1148, and the Sensenbrenner-Quigley bill as an amendment to H.R. 1148, for floor action by the House.

Sincerely,

Campaign Legal Center                                                           
Citizens for Responsibility and Ethics in Washington            
Common Cause                                                                       
Democracy 21
League of Women Voters
OMB Watch
Project On Government Oversight
Public Citizen
Sunlight Foundation
U.S. PIRG

February 6, 2012

U.S. House of Representatives                                                                     
Washington, D.C. 20515

Enact “Stop Trading on Congressional Knowledge Act,” Bill Sponsored by 281 Members or Nearly Two-Thirds of House

Dear Representative:

Last week, the Senate passed the bipartisan “Stop Trading on Congressional Knowledge” (STOCK) Act by an overwhelming vote of 96 to 3. Reform groups strongly supported this legislation.

The Senate-passed bill, S. 2038, makes clear that the laws against insider trading apply to Congress and those who do business with Congress. The legislation also establishes real-time disclosure requirements for trading activity by members of Congress and the Executive Branch and closes major loopholes in the crucial honest services fraud statute and the gratuities statute so that important anti-corruption laws can again be effectively enforced.

Our organizations strongly urge the House to vote on and pass the Senate-passed bill and send it immediately to President Obama for his signature. President Obama has made clear that he will sign the STOCK Act as soon as it reaches him.

The organizations include Campaign Legal Center, Citizens for Responsibility and Ethics in Washington, Common Cause, Democracy 21, League of Women Voters, OMB Watch, Project On Government Oversight, Public Citizen, Sunlight Foundation and U.S. PIRG.

In the event the House Republican leadership is not willing to schedule the Senate-passed bill for a vote, we strongly support the bipartisan House version of the STOCK Act, H.R. 1148, sponsored by Reps. Timothy Walz (D-MN) and Louise Slaughter (D-NY) and co-sponsored by 279 House members, or nearly two-thirds of the House. Absent the ability to vote on the Senate-passed bill, it is essential that the House Republican leadership provide the opportunity for a vote on H.R. 1148 on the House floor. As The New York Times noted in an editorial (February 4, 2012), “House leaders would be foolish to weaken or delay the reform effort.”

Important provisions added on the Senate floor to strengthen the legislation should also be in order as amendments to H.R. 1148, including the legislation fixing the honest services and gratuities statutes, sponsored in the House by Representatives James Sensenbrenner (R-WI) and Mike Quigley (D-IL) and unanimously reported out by the House Judiciary Committee.

The Senate has passed important ethics and anti-corruption legislation at a time when the country is deeply skeptical about Congress and the way it is conducting its business. The House of Representatives should do no less and should move quickly to pass strong new ethics rules and anti-corruption provisions.

Vote ‘YES’ on the STOCK Act and send the legislation to President Obama.

Sincerely,

Campaign Legal Center
Citizens for Responsibility and Ethics in Washington
Common Cause
Democracy 21
League of Women Voters
OMB Watch
Project On Government Oversight
Public Citizen
Sunlight Foundation
U.S. PIRG

Vote to Pass the STOCK Act, Including Provisions to Close Serious Loopholes in Laws to Prevent Public Corruption

February 6, 2012

U.S. House of Representatives                                                                       
Washington, D.C. 20515

Dear Representative:

Last week reform groups supported the STOCK Act in the Senate, which passed by an overwhelming bipartisan vote of 96 to 3. A companion bipartisan bill in the House, H.R. 1148, currently is sponsored by 281 Representatives.  

In a separate letter sent today to the House, reform groups strongly urge the House to vote on and pass the Senate-passed bill and send it immediately to President Obama for his signature. President Obama has made clear he will sign the STOCK Act as soon as it reaches him.

In the event the House Republican leadership is not willing to schedule the Senate-passed bill for a vote, we strongly support the bipartisan House version of the STOCK Act, H.R. 1148, sponsored by Reps. Timothy Walz (D-MN) and Louise Slaughter (D-NY) and co-sponsored by 279 House members, or nearly two-thirds of the House. Absent the ability to vote on the Senate passed bill, is essential for the House Republican leadership to provide the opportunity for a House floor vote on H.R. 1148, which is sponsored by nearly two-thirds of House Members.

The organizations include: the Campaign Legal Center, Common Cause, Citizens for Responsibility and Ethics in Washington, Democracy 21, the League of Women Voters, OMB Watch, Public Citizen, Project on Government Oversight, the Sunlight Foundation, and U.S. PIRG.

Our organizations also strongly support adding as an amendment to the STOCK Act, the bipartisan “Clean Up Government Act,” H.R. 2572, sponsored by Representatives James Sensenbrenner (R-IL) and Mike Quigley D-IL). This legislation was reported out unanimously by the House Judiciary Committee.

The organizations include the Campaign Legal Center, Common Cause, Citizens for Responsibility and Ethics in Washington, Democracy 21, the League of Women Voters, OMB Watch, Public Citizen, Project on Government Oversight, the Sunlight Foundation, and U.S. PIRG.

Companion legislation to H.R. 2572, known in the Senate as the “Public Corruption Prosecution Improvements Act,” was added to the STOCK Act legislation passed by the Senate last week.  

Unlike most bills introduced and considered in this Congress, and like the STOCK Act, the “Clean Up Government Act” in the House and the companion “Public Corruption Prosecution Improvements Act” in the Senate is bipartisan, bicameral legislation. The principal sponsors of the Senate legislation are Senators Patrick Leahy (D-VT) and John Cornyn (R-TX).

This legislation is essential to close serious loopholes in the nation’s anti-corruption laws that have made it far more difficult to investigate and prosecute corruption by public officials. The legislation fixes the federal gratuities statute and the honest services fraud statute to restore their ability to be used as effective laws to prevent corruption by public officials.

At a time when public confidence in Congress is being measured at all time lows, it is critically important that effective laws exist to hold government officials accountable who engage in self-dealing, abuse of public office for personal financial gain or similar kinds of public corruption. The absence of effective laws to deal with these kinds of problems both weakens the ability of the laws to serve as an effective deterrent to corruption and undermines the confidence of citizens in the integrity of their elected representatives.

Our groups strongly urge you to vote for the Senate passed bill if the opportunity to do so is provided and to otherwise vote for the Sensenbrenner-Quigley bill as an amendment to the House STOCK Act and for the House STOCK Act .
 
Campaign Legal Center
Citizens for Responsibility and Ethics in Washington
Common Cause
Democracy 21
League of Women Voters
OMB Watch
Public Citizen
Project on Government Oversight
Sunlight Foundation
U.S. PIRG

“Last night’s Senate passage of the Stop Trading on Congressional Knowledge (STOCK) Act represents a strong step forward on several important ethical issues. Senators who voted for passage are to be commended.  It is now up to the House leadership to ensure that the legislation is not watered down or scuttled."

“The STOCK Act makes it clear that is illegal for Members of Congress and their staffs to use nonpublic information for financial gain and requires disclosure of financial transactions within 30 days.  While it is unknown how big a problem congressional insider trading is, it is clear that the laws covering this nefarious activity should explicitly cover Members of Congress.

“While it is disappointing that the Senate refused to include language to require electronic campaign finance filings by Senators, it does include key provisions to strengthen anti-corruption statutes to hold public officials accountable.  These important laws have been significantly weakened over the past several years due to court decisions which increasingly narrowed their application, leaving prosecutors with few tools to combat corruption other than outright bribery.”

The provisions in the STOCK Act, based on a bipartisan measure sponsored by Senators Patrick Leahy (D-VT) and John Cornyn (R-TX), seek to fix the flaws in the laws governing illegal gratuities (the giving of gifts to public officials in order to curry favor) and honest services (a scheme to defraud the government through unethical conduct).   A bill with similar provisions to the Cornyn-Leahy bill has already been unanimously approved by the House Judiciary Committee.

“The House should move expeditiously to take up the Senate-passed bill and should reject any efforts to weaken it or to include poison pill amendments that will waylay final passage by both bodies.

“It is notable that the STOCK Act became a magnet for a large number of amendments focused on ethics issues.  Polls show levels of public confidence in Washington, and in Congress in particular, are at record lows.  With the upcoming elections, members of both parties are seeking the publicity for their proposals to strengthen ethics laws.  Rarely is Congress in a rush to hold itself accountable, but the public may in fact benefit from this pre-election race to the high ground in Congress.  Usually the race is in the other direction.  But ethics issues will continue to have saliency in a system where the parties are increasingly polarized and where the disconnect between our nation’s politicians and average Americans seems only to be growing.”