Friday, May 29, 2009

Lost In Translation

Sometimes the right question can be asked, a correct answer can be given, and still there's profound misunderstanding. A line of questioning at Wednesday's public hearing on the Electioneering Disclosure bill closing the "issue ad" loophole provided a vivid illustration.

Senator Randy Hopper asked a legislative staff attorney if the bill treats corporations and labor unions the same. While the answer he received was technically correct, it also was incomplete and open to misinterpretation. Judging from follow-up questions and comments by committee members, it was clear the attorney's response left an inaccurate impression.

Senator Hopper and his colleagues were told a longstanding Wisconsin law bans corporations from making contributions or spending money for a "political purpose" and since the disclosure bill defines phony issue ads as communications done for a political purpose, corporations are prohibited from funding them. All of that is correct. It's what the attorney didn't say that created the problem. When the attorney used the word corporation, the legislators evidently heard "for-profit business." But under state law the term "corporation" does not only mean a for-profit company. It means any incorporated entity or organization. Labor unions are incorporated. Their names don't typically tip off their corporate structure, although a few do (witness Madison Teachers Inc.). Non-profit organizations are incorporated. The Wisconsin Democracy Campaign is a not-for-profit corporation.

The effect of existing Wisconsin law is to prohibit any incorporated entity from using treasury funds for a "political purpose." These organizations may form political action committees, however, to engage in political activity. The practical effect of the disclosure bill, if it becomes law, would be to require any campaign advertising or other electioneering activity to be done through a registered PAC, regardless of whether the organization is a for-profit business, a labor union or a non-profit group. All incorporated entities would be treated the same, thus creating a truly level playing field for all participants.

Not only do PACs have to register and report their sources of income and the amount they spend, but they also have to obey limits in current state law on campaign contributions they receive. An individual can give a maximum of $10,000 to a PAC. That's the same limit on donations to candidates for statewide offices such as governor or Supreme Court justice. Like candidates, PACs cannot accept donations from the treasuries of incorporated entities. So special interest groups doing campaign advertising would not be able to take money from the general treasuries of labor unions, for-profit businesses or non-profit organizations. They would have to raise their money from individuals in amounts not exceeding $10,000. Just like candidates for statewide office.

The issue ad disclosure bill truly would put interest groups on the same footing as candidates, and the way it treats businesses is no different than the way it treats labor unions or any other incorporated organization.

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