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McCain: DISCLOSE Act opens door to labor money

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McCain: DISCLOSE Act opens door to labor money

U.S. Sen. John McCain on Tuesday delivered the following remarks on the floor of the U.S. Senate regarding the DISCLOSE Act (as prepared for delivery):

Mr. President, I oppose cloture on the motion to proceed to S. 3369, the DISCLOSE Act. My reasons for opposing this motion are simple – even though the subject of campaign finance reform is not. In its current form, the DISCLOSE Act is closer to a clever attempt at political gamesmanship, than actual reform. By conveniently setting high thresholds for reporting requirements, the DISCLOSE Act forces some entities to inform the public about the origins of their financial support, while allowing others – most notably those affiliated with organized labor – to fly below the Federal Election Commission's regulatory radar.

As my colleagues are aware, I have a rather long history fighting for campaign finance reform, and to break the influence of money in American politics. And, regardless of what the United States Supreme Court may do or say, I continue to be proud of my record because I believe the cause – to improve our democracy and further empower the citizens of our country – was and continues to be worth fighting for.

But let's be clear – the reforms we have successfully enacted over the years have not cured all of the public cynicism about the state of politics in our country. No legislative measure or Supreme Court decision will completely free politics from influence peddling or the appearance of it. But I do believe that fair and just reforms will move many Americans, who have grown more and more disaffected from the practices and institutions of our democracy, to begin to get a clearer understanding of whether their elected representatives value their commitment to our Constitution more than their own incumbency.

For far too long, money and politics have been deeply intertwined. Anyone who has ever run for federal office will assure you of this fact. Candidates often come here to Washington – not seeking wisdom or ideas – but because they need help raising money. These same candidates will most likely tell you that they are asked one question when they announce they are going to seek office. Unfortunately, it's not, 'How do you feel about taxes?' or 'What's your opinion of the role of government?' No, the question they are asked is: 'How are you going to raise the money?' Couple this sad reality with the dawn of the 'Super PAC,' spending from corporate treasuries, and record spending by Big Labor and one can easily see that a major scandal is not far off. And there will be a scandal. Mark my words there will be one. The American people know it and I know it.

Reform is necessary. But, again, it must be fair and just and this legislation before us is not.

A recent Wall Street Journal article by Tom McGinty and Brody Mullins, titled 'Political Spending by Unions Far Exceeds Direct Donations,' noted that organized labor spent about four times as much on politics and lobbying as originally thought – $4.4 billion from 2005 to 2011. According to the Wall Street Journal's analysis, unions are spending far more money on a wider range of political activities than what is reported to the Federal Election Commission. The report plainly states that:

This kind of spending, which is on the rise, has enabled the largest unions to maintain and in some cases increase their clout in Washington and state capitals, even though unionized workers make up a declining share of the workforce. The result is that labor could be a stronger counterweight than commonly realized to "super PACs" that today raise millions from wealthy donors, in many cases to support Republican candidates and causes.

The hours spent by union employees working on political matters were equivalent in 2010 to a shadow army much larger than President Barack Obama's current re-election staff, data analyzed by the Journal show.

The report goes on to note:

Another difference is that companies use their political money differently than unions do, spending a far larger share of it on lobbying, while not undertaking anything equivalent to unions' drives to persuade members to vote as the leadership dictates. Corporations and their employees also tend to spread their donations fairly evenly between the two major parties, unlike unions, which overwhelmingly assist Democrats. In 2008, Democrats received 55% of the $2 billion contributed by corporate PACs and company employees, while labor unions were responsible for $75 million in political donations, with 92% of it going to Democrats."

The traditional measure of unions' political spending – reports filed with the FEC – undercounts the effort unions pour into politics because the FEC reports are mostly based on donations unions make to individual candidates from their PACs, as well as spending on campaign advertisements.

Unions spend millions of dollars yearly paying teams of political hands to contact members, educating them about election issues and trying to make sure they vote for union-endorsed candidates.

Such activities are central to unions' political power: The proportion of members who vote as the leadership prefers has ranged from 68% to 74% over the past decade at AFL-CIO-affiliated unions, according to statistics from the labor federation."

Additionally, according to a February 22, 2012, Washington Post article titled, 'Union Spending for Obama, Democrats Could Top $400 Million in 2012 Election,' AFSCME reportedly expects to spend $100 million 'on political action, including television advertising, phone banks and member canvassing while the SEIU plans to spend at least $85 million 2012.'

That analysis, combined with the $1.1 billion that the unions reported to the FEC from 2005 through 2011, and the additional $3.3 billion unions reported to the Labor Department over the same period on political activity, demonstrates the need for equal treatment of political advocacy under the law.

Given the strength and political muscle behind all of these figures it is easy to understand why disclosure may sound nice, but unless the treatment is completely fair, taking into account the diverse nature and purpose of different types of organizations, disclosure requirements will likely be used to give one side a political advantage over another. This is just one of the flaws with the bill before us today. The DISCLOSE Act would have little impact on unions because of the convenient thresholds for reporting, but would have a huge effect on associations and other advocacy groups. From my own experience, I can state without question that real reform, and in particular campaign finance reform, will never be attained without equal treatment of both sides. A half-dose of campaign finance reform will be quickly – and rightly – labeled as political favoritism and will undermine future opportunities for true progress. Furthermore, these sorts of games and measures will only make the American people more cynical and have less faith in what we do.

The authors of this bill insist that it is fair and is not designed to benefit one party over the other. Sadly, the stated intent does not comport with the facts. The DISCLOSE Act is written to burden labor unions significantly less than the other groups. In the United States, there are roughly 14 to 16 million union members, each of whom is required to pay dues to his local union chapter. Historically, these local union chapters send a portion of their revenues up to their affiliated, larger 'international' labor unions. And while each union member's dues may be modest, the amounts that ultimately flow up to the central political arms are vast. The DISCLOSE Act protects this flow of money in two distinct ways:

1. Organizations that engage in political conduct are only required to disclose payments to it that exceed $10,000 in a two-year election cycle. Meaning, the local union chapter will not be required to disclose the payments of individual union members to the union, even if those funds will be used for political purposes. What is the final difference between one $10,000 check and 1,000 $10 checks? Other than the impact on trees, very little. So why should one be free from having to disclose its origin?

2. The bill exempts from the disclosure requirements transfers from affiliates that do not exceed $50,000 for a two-year election cycle. As a result, unions would not have to disclose the transfers made to it by many of its smaller local chapters. Given the contrast between union and corporate structures, this would allow unions to fall beneath the bill's threshold limits. For local union chapters, this anonymity is probably very important because, among other effects, it prevents union chapters' members from learning how much of their dues payments are being used on political activities.

And while the exemptions outlined in the DISCLOSE Act may be facially applied to business organizations and associations, it is apparent to me that the unions' unique, pyramid-style, ground-up money funneling structure, would allow unions to not be treated equally by the DISCLOSE Act. Unlike unions, most organizations do not have thousands of local affiliates where they can pull up to $50,000 in 'affiliate transfers.'

I have been involved in the issue of campaign finance reform for most of my career, and I am supportive of measures which call for full and complete disclosure of all spending in federal campaigns. I re-affirmed this commitment by submitting an amicus brief to the United States Supreme Court regarding campaign finance reform along with author of the DISCLOSE Act. But this bill falls short. The American people will see it for what it is – political opportunism at its best, political demagoguery at its worst.

When my former colleague from Wisconsin, Senator Feingold, and I set out to eliminate the corrupting influence of soft money and to reform how our campaigns are paid for – we vowed to be truly bipartisan and to do nothing which would give one party a political advantage over the other. As some have pointed out in past debates, and whether you agreed with our legislation or not, the rules we created applied equally to everyone. The bill before us today is clearly designed to offer disclosure in some instances, while allowing some, primarily labor unions, to speak and spend under convenient spending disclosure thresholds.

Mr. President, I encourage my colleagues to oppose cloture on the motion to proceed to this bill, and I urge my friends in the majority to go back to the drawing board and bring back a bill that is truly fair, truly bipartisan, and requires true full disclosure for everyone.

John McCain is a Republican Senator from Arizona.

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