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Transparency in campaigns? State just says, “No.”

May 11, 2010

(This article is a re-posting from the Michigan Campaign Finance Network.)

The Michigan Department of State issued a draft response on April 30th to a request from the Michigan Chamber of Commerce for a Declaratory Ruling on disclosure requirements for corporate expenditures in State campaigns in view of the U.S. Supreme Court’s decision earlier this year in the case of Citizens United v. Federal Election Commission. In its essence, the Chamber’s request asked whether it would have to reveal the identities of contributors whose funds it aggregates for campaign expenditures, or will it be sufficient to say that the aggregated funds are from the Chamber’s general treasury?

The Department of State’s draft response says that the Chamber can simply report its corporate campaign expenditures are funded by its general treasury.

The Michigan Campaign Finance Network views the Department’s draft to be a fundamentally flawed interpretation of the Michigan Campaign Finance Act (MCFA), P.A. 388 of 1976, as amended, and relevant U.S. Supreme Court campaign finance jurisprudence.

First, the Department of State’s draft response addresses itself to ‘express advocacy,’ a term not found in language or concept in the MCFA, rather than the broader definition of ‘expenditure’ found in the Act, and the full body of relevant Supreme Court jurisprudence on campaign expenditures.

Secondly, the Department of State agrees to place the Chamber’s electioneering ‘committee’ outside the Chamber’s corporate accounting, in order to accommodate the notion of just one contributor – the general treasury, rather than inside the Chamber’s corporate accounting with multiple contributors, as suggested by the Chamber’s own tax returns.

Thirdly, the Department of State appears to ignore section (42)(3) of the MCFA, which says that any recipient of a contribution that is not from a committee that has its own accounting and reporting, must include in its record keeping and reporting the name, address and amount given by each person who has contributed to the total amount of the contribution. That should mean that the Chamber’s general treasury must tell its Chamber PAC III who put money in the general treasury to give to Chamber PAC III, and Chamber PAC III must report those contributors’ identities and the amounts they gave.

The Department of State’s draft response is surely cause for celebration among the special interests who gain anonymity for their campaign spending by channeling money through nonprofit aggregators,” said Rich Robinson of the Michigan Campaign Finance Network. “Secrecy makes government actors more accountable to special interests than voters. If this flawed interpretation is not corrected, more campaign spending than ever will be off-the-books, and that is a deadly prospect for democracy.”

MCFN comment on MI Dept. of State draft Declaratory Ruling

MI Department of State draft Declaratory Ruling

MCFN comment on MI Chamber request for a Declaratory Ruling

MI Chamber of Commerce request for a Declaratory Ruling

The Michigan Campaign Finance Network (MCFN) is a nonprofit, nonpartisan organization that conducts research and public education on money in Michigan politics.

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