Congress should pass legislation to counteract the recent Supreme Court decision allowing unlimited corporate campaign ad spending to prevent oil giant BP from buying elections, said an advocate of campaign finance reform Thursday.
Public Campaign president Nick Nyhart told the Committee on House Administration that the Supreme Court's decision in Citizens United v. FEC gives BP the unlimited ability to back candidates who oppose legislation increasing BP's liability for the oil spill.
Under current law, BP's liability to area businesses ruined by the spill is only $75 million. A bill called the Big Oil Bailout Prevention Act, introduced by Democratic senators on Monday, would raise that liability to $10 billion.
"Our political system -- given this Supreme Court's recent decision -- allows companies like BP to spend their treasury money to influence elections," said Nyhart, according to his prepared remarks. "What would stop BP -- a foreign owned corporation -- facing the prospects of $10 billion in clean up liabilities from spending $10 million, or $50 million, or even $100 million or more to elect candidates who oppose this bill or defeat those who support it? It's simple math to see their financial interest is in spending $100 million to save $10 billion."
In January, the Supreme Court undid the Federal Election Commission's restrictions on corporate spending on campaign ads within 60 days of a general election or 30 days of a primary. In response, Democrats in the House and the Senate unveiled the DISCLOSE Act, which, among other things, would disallow foreign-controlled corporations from spending money in U.S. elections.
Specifically, the bill would disallow electioneering by a company if a "foreign national owns 20% or more of voting shares in the corporation." BP is 61 percent foreign-owned.
"The DISCLOSE Act prevents foreign-owned companies from doing that and that's one reason it should pass," said Nyhart. "But the oil industry as a whole would certainly think 'there but for the grace of God go I.' It could be ExxonMobil next time. And executives at ExxonMobil, and other American oil companies, thanks to Citizens United will have the chance to spend political money from their treasuries also, and in do it in secret, hiding behind front groups with innocuous names, unless DISCLOSE passes."
Unsurprisingly, the Organization for International Investment, Washington lobbyshop for U.S. subsidiaries of foreign-owned companies, dislikes the measure. "We agree that foreign influence has no role in U.S. elections," said president Nancy McLernon in a statement, "but the DISCLOSE Act chips away at the political rights of the five million American workers who collect over $400 billion in paychecks from the U.S. subsidiaries of companies based abroad or 'Insourcing' companies."
The DISCLOSE Act's stand-by-your-ad provision would also force corporate CEOs and labor union officials to appear in ads and say "I approved this message."
Senate Majority Leader Harry Reid (D-Nev.) has said he plans to bring the bill to the floor by Independence Day.
Here's the relevant excerpt of Nyhart's remarks:
I can't help but use an current example unfolding on our television screens nightly - an example that clearly illustrates why this bill is so important.
Over the last few weeks Americans have watched a human, ecological, and economic tragedy unfold in our Gulf waters. With tens of thousands of gallons of oil pouring into the ocean off our Gulf Coast, we have all come to understand that the clean up of this disaster will take years and cost fortunes.
As children, we're all taught that we're responsible to clean up our own messes. Right now, oil companies like BP have their liability on events like this one capped at $75 million. Experts say that is a drop in the ocean, so to speak, compared to the actual cost of lost jobs, damage to the environment, increases in energy prices, and changes in the way of life throughout the Gulf Coast.
Legislation called the "Big Oil Bailout Prevention Act", has been introduced in both chambers to increase oil company liability from $75 million to $10 billion. Representative Artur Davis, I know, is a leading co-sponsor of the House measure.
Our political system - given this Supreme Court's recent decision - allows companies like BP to spend their treasury money to influence elections. What would stop BP - a foreign owned corporation - facing the prospects of $10 billion in clean up liabilities from spending $10 million, or $50 million, or even $100 million or more to elect candidates who oppose this bill or defeat those who support it? It's simple math to see their financial interest is in spending $100 million to save $10 billion.
The DISCLOSE Act prevents foreign-owned companies from doing that and that's one reason it should pass. But the oil industry as a whole would certainly think "there but for the grace of God go I". It could be ExxonMobil next time. And executives at ExxonMobil, and other American oil companies, thanks to Citizens United will have the chance to spend political money from their treasuries also, and in do it in secret, hiding behind front groups with, innocuous names, unless DISCLOSE passes. DISCLOSE will make the identities of those behind the ads public, in some cases requiring that a company's executives take personal responsibility for the ad.
Public disclosure is an important principle here that will give voters more information as they make decisions. Knowing that an attack ad is paid for by a big oil company with a vested interest in who wins an election certainly provides an essential perspective on the "facts" presented in a thirty second spot by a group that might be officially called something like "Americans for Jobs, Health and Security". Transparency will help prevent further erosion of the public trust in our corporations and our politicians.And even when DISCLOSE passes, the oil companies will remain powerful political players in financing the campaigns of members of Congress. In the last twenty years, ExxonMobil's executives and PAC have given nearly $11 million to the campaigns of members of Congress and political parties, according to the nonpartisan Center for Responsive Politics. The oil and gas industry as a whole has given nearly a quarter of a billion dollars over the same time period. And that's why we need a Fair Elections system, so candidates won't need to chase oil industry checks to pay for their campaigns.
Why wouldn't Big Oil keep up, or even pick up, its political spending when faced with a bill that would require that they pay more than they pay now, potentially billions more, for the Gulf clean up?