DES MOINES — State election watchdogs are worried that if left unchecked this legislative session, a loophole in the state’s campaign finance disclosure law could release a flood of contributions from secret donors, which non-profit groups making independent expenditures could then use to target candidates in Iowa races at all governmental levels.
“I do think we’re starting to get into some dangerous terrain,” said Megan Tooker, executive director of the Iowa Ethics and Campaign Disclosure Board. The board issued an advisory opinion last election cycle indicating that, based on current Iowa law, non-profit entities making independent expenditures did not have to disclose the donors of contributions that were not earmarked for a specific purpose.
By placing a disclaimer on its website and solicitation materials, the American Family Association was able to raise $171,000 in Iowa’s 2010 judicial retention election from donors whose names were not disclosed under the earmark exemption, Tooker said. Everything AFA did was aboveboard and legal, she noted, but it exposed “a real weakness” in Iowa’s campaign disclosure provision that could be significantly exploited in the coming election if lawmakers do not move to close it before they adjourn their 2012 session next month.
Under a 2010 U.S. Supreme Court ruling in a case known as Citizens United, the government can’t restrict political expenditures by corporations and unions. State Sen. Jeff Danielson, D-Waterloo, chairman of the Senate State Government Committee, likened the resulting situation to a scene from the movie “Jurassic Park” in which aggressive dinosaurs are constantly testing fences.
“The board is now concerned because that ruling is out there and it’s essentially an administrative rule — it is the law of the land and people will use it to keep their campaign contribution secret,” said Danielson, who sponsored a bill to close the loophole. “You’re going to see a flood of secret money in Iowa elections this fall if this isn’t passed. They’ve already tested it.”
Though Danielson’s measure won Senate approval on a 31-19 vote March 14, it arrived too late for the Iowa House to take up before it became ineligible for consideration this session. House leaders expressed interest in finding ways to resurrect the topic, if a bipartisan solution could be found to head off a repeat this fall of the barrage of “super PAC” candidate attack ads that Iowans were subjected to during the run-up to January’s GOP presidential precinct caucuses.
“I’m open to looking at this,” said Rep. Peter Cownie, R-West Des Moines, chairman of the House State Government Committee. While Danielson’s bill was sidelined in the legislative process, Cownie noted, “nothing is dead until we’re out of here” — but he said any changes to Iowa’s campaign finance disclosure laws would have to pass constitutional muster to conform with federal free speech protections.
Sonia Ashe of the Iowa Public Interest Research Group consumer watchdog said Iowa is facing an untenable situation where candidates and political action committees, which have to disclose their contributions and spending, would be forced to go up against non-profit groups claiming to exist for educational or political speech purposes that will not be subject to the same requirement.
“In this day and age, with the amount of money that is getting poured into politics, being able to have that transparency and accountability is absolutely necessary,” she said. “The doors are wide open. I think what happened during the 2012 Iowa caucuses is exactly what we expected to happen, and what we should expect to happen in the future if we don’t take some measures either to curtail the amount of spending that’s pouring into politics or at least find ways to improve our disclosure.”
Ashe, a Statehouse lobbyist for Iowa PIRG, said she is concerned the campaign finance disclosure issue was somewhat “under the radar” this legislative session because the focus has been on state budget issues and ways to reform Iowa’s property tax, education and mental health systems. But she said the election law loophole should be of priority concern to proponents of good government in Iowa.
“We won’t see legislative action unless people start demanding it,” Ashe said. “… It’s not a situation where it’s under the radar because people don’t care, I think it’s under the radar because at this point people don’t know.
“I think the more we can shine some sunshine on the books when it comes to political spending, the better.”