President Obama is considering measures to compel disclosure of contributions. | AP, Reuters Photos | REUTERS W.H. mulls limits to anonymous gifts

The Obama administration is considering a number of measures to compel disclosure of the kind of anonymous campaign contributions that helped finance millions of dollars of attack ads against Democrats during the 2010 elections.

The White House last week began circulating a draft executive order that would require companies seeking government contracts to disclose contributions – including those that otherwise would have been secret – to groups that air political ads attacking or supporting candidates.


The proposed order follows several actions by regulatory agencies that have a similar intent of making corporate and individual donations more transparent.

Last month the Securities and Exchange Commission issued a decree that could result in shareholders having more say in corporate election spending. Democratic appointees to the Federal Communications Commission and Federal Election Commission are pushing measures that could make public currently anonymous contributions to outside groups.

The Democratic FEC commissioners are also trying to restrict political spending by U.S. subsidiaries of foreign corporations.

Taken together, the moves represent a broad administrative push to implement reforms that Congress failed to pass last year to blunt the impact of the Supreme Court’s decision in Citizens United vs. FEC in January 2010.

That decision prompted a deluge of outside advertising that liberals say favored Republicans in the 2010 midterm elections.

Administration critics, including the powerful U.S. Chamber of Commerce, are seizing on the White House’s draft executive order, in particular, as evidence of an attempt to use executive power to punish or silence political adversaries, while rewarding supporters.

Calling the draft executive order “an affront to the separation of powers … (and) to free speech,” chamber spokeswoman Blair Latoff said it “lays the groundwork for a political litmus test for companies that wish to do business with the federal government” and is “less about disclosure than intimidation.”

But congressional Democrats and White House allies applauded the draft executive order as an overdue effort to prevent the 2012 elections from being hijacked by undisclosed big moneyed special interests – on both sides of the partisan divide.

“The fact that congressional Republicans may oppose disclosure does not mean that efforts to obtain it are, by definition, partisan,” said Fred Wertheimer, president of Democracy 21, a non-profit group that pushes for stricter campaign finance rules, and that opposed Citizens United in its Supreme Court challenge.

Wertheimer pointed out that Democrats are planning their own big spending groups to counter those established by Republicans in the wake of Citizens United and called “disclosure of secret contributions being spent to influence federal elections … essential public policy.”

Craig Holman, a campaign finance lobbyist for Public Citizen, acknowledged that the Republican takeover of the House and narrowing of the Democratic majority in the Senate in the 2010 midterms puts the onus on the Obama administration to use executive power to tighten campaign finance disclosure and other rules.

“I would have liked to see (Obama) play a more active role administratively on a lot of these reform efforts, but I hope this (executive order) is a signal that the White House is going to get more involved in the regulatory approach, because they can achieve a great deal through executive order,” said Holman.

Holman worked with the administration and its congressional allies last year on a bill to respond to the Citizens United decision by forcing groups airing certain ads to name their top five donors on screen and on their websites. That bill would also have limited political ad spending by companies with government contracts or that received government bailouts from the Troubled Asset Relief Program, as well as those with more than 20 percent foreign ownership.

The bill, called the DISCLOSE Act (short for “Democracy Is Strengthened by Casting Light On Spending in Elections”) last year passed the Democratic-controlled House, but died in the Senate.

A related House bill to require shareholder approval before a publically traded corporation could spend money on politics never came up for a full House vote.

One Democratic congressional aide, who requested anonymity to talk about interactions with the White House, said that Democratic House members had made clear that “there was interest in the House in trying to get the White House to do whatever they could do within their constitutional power” to move the issue.

The draft executive order, which the White House is circulating for comment among agencies, says its goal is to “increase transparency and accountability” and “ensure the integrity of the federal contracting system” by requiring companies submitting bids for federal work to disclose contributions made within the last two years by their officers and directors to federal candidates and parties.

Such contributions already have to be reported to the FEC, but the executive order also would require disclosure of contributions or expenditures made by a company’s officers and directors, as well as the company and its affiliates, to support candidates, including those “made to third party entities with the intention or reasonable expectation that parties would use those contributions to make independent expenditures or electioneering communications.”

That last phrase seems an effort to directly address spending by groups registered under sections of the tax code that don’t require disclosure of donors, such as the chamber – which is registered under section 501(c)6 – and Crossroads Grassroots Policy Strategies, which is registered under section 501(c)4.

An administration official stressed that the executive order, which cites state “pay-to-play” laws as a model, “is a draft ... that is still moving through the standard review and feedback process” and “is not a final document.” But the official, who requested anonymity to discuss the working draft, said Obama “is committed to an overhaul of government contracting policies to promote accountability, transparency and competition.”

The executive order seems likely to quiet some criticism Obama has been facing from advocates for stricter campaign finance regulations. They contend Obama has failed to live up to his campaign promise to reduce the influence of big money in politics.

They have also criticized him for not overhauling the perpetually gridlocked FEC or the presidential public financing system, and for signaling that he will again bypass the public financing system and won’t discourage outside groups from raising and spending huge sums of cash to support his reelection effort.

Hans von Spakovsky, a former GOP appointee to the FEC who first revealed the circulating draft, pointed out that it does not seem to apply to Democratic-allied groups that either receive grants from the federal government, or unions that negotiate contracts with it.

“The fact is that they’re only extending it to the one group that they think is probably going to hurt them politically, as opposed to unions and groups like Planned Parenthood, which are going to help them, shows that there is a political agenda for doing this,” he told POLITICO.

“This president in two years hasn’t made the transition from being a candidate to being a president and I think this is just also evidence of that,” he said of the executive order, asserting that it, combined with the regulatory processes at play at the FEC, SEC and FCC, represent a “very anti-democratic” circumvention of Congress.

“When the Democrats can’t get something through Congress, they turn to these regulatory agencies and try to get them to implement what they couldn’t get through legislation,” he said.

The SEC staff issued a letter late last month that cleared shareholders to learn about and vote on one corporation’s political spending, but which shareholder rights’ advocates believe will clear the way for similar actions at other corporations.

But pushes to implement aspects of the DISCLOSE Act at the FEC and FCC have been less fruitful.

At the FEC, three Democratic commissioners (all of whom predate Obama’s presidency) have tried to compel disclosure of certain secret contributions and to bar political spending by U.S. subsidiaries of foreign corporations. But their effort has been blocked by the three Republican commissioners, fueling calls for Obama to replace the commissioners from Wertheimer, Holman and other advocates for stricter campaign finance rules.

At the FCC, a petition by an advocacy group asking the agency to require on-air identification of funders of political advertisements has the support of two Democratic commissioners, but the Obama-appointed chairman, Julius Genachowski, has yet to weigh in.

Still, Sean Parnell of the anti-regulation non-profit group Center for Competitive Politics, said the technically independent regulatory processes at play at the FEC, SEC and FCC, should be viewed along with the draft executive order as “a concerted and coordinated effort to try to stifle certain voices ahead of the 2012 elections.”

Parnell, whose group filed a brief supporting Citizen United’s lawsuit against the FEC, explained “there’s simply too much activity in different corners all aimed at in one way or another undoing or limiting the First Amendment rights recognized in the Citizens United decision to believe that it’s a coincidence.”