How well does the current disclosure law work?

It works very well, but there are still some problems. One problem is the failure to provide required information. Committees are supposed to provide the name, address, occupation, and employer of every donor who gives $200 or more. Not every report filed with the FEC includes this information. Inadequate donor information does not matter much for the majority of the 0.4 percent of Americans who give in the lower ranges of reportable contributions. Part of the debate over disclosure is about whether these donors' names should be disclosed at all. But it does matter for the tinier percentage of donors who make very large contributions.

Imagine a big donor named Jonathan Adam Smith. He can give his name in several different ways: he could spell out his first and middle names in full, use a nickname like John or Jack, use only initials for his middle name, or omit it entirely. (FEC regulations do not allow initials for first and last names.) His wife, Deborah Anne—or Debby—can do the same with her donations.

As a wealthy couple, Jonathan and Deborah probably have more than one house. That means they can list any one of those houses, as well as Jonathan's or Debby's office, as a legal address. They could make large contributions to several committees, giving different addresses and different versions of their names for each contribution, and stay well within the law. But they would also make it very difficult to tell that all those contributions came from the same couple.

This difficulty arises because the FEC does not track contributors; it records contributions. That record shows how many contributions a committee receives, but not all of those contributions are accurately credited to the people who made them. Additional research is needed to turn that raw data from a catalog of contributions into a list of contributors, and additional research is not the FEC's job.13

Other problems arise with entries for occupation and employer. The FECA requires this information, but FEC regulations do not. The FEC does ask committees to provide missing information when the blanks for occupation and employer are not filled in. But a committee only has to make one request of the donor to fill in the omissions. If the donor does not respond, the blanks are not filled in and the committee is off the hook for the omissions—that one request counts as a "best effort" to get the information.14

Inadequate technology was also a problem in the first ten or fifteen years after the 1974 law went into effect. When it came to getting information out to the public, the FEC in those years was not much better equipped than the Clerk of the House had been in 1910. It met the law's requirement to make the reports public by making microform copies available in public reading rooms. That was an improvement over storing the originals on Capitol Hill, but it still meant that reports were available only to those who went to a government office. How well the law worked still depended on how well the media and political scientists wanted it to work.

The Internet was a huge step forward. Voters now have direct access to disclosure reports, which can be downloaded from the FEC's website. But what a voter sees when she downloads those reports is pretty much what she would have seen had she trudged up to Capitol Hill a century ago: hundreds of pages of raw data. For disclosure to attain its goal of giving voters usable information, someone still has to process that data and make it publicly available in a manageable form. Journalists and political scientists did most of that processing under the 1910 law, but they can no longer do that alone.

The ocean of campaign finance data in FEC databases means that effective disclosure now depends on organizations created for the sole purpose of compiling and analyzing it. Nonprofits such as the Center for Responsive Politics, the Campaign Finance Institute, and the Sunlight Foundation process raw FEC data and provide it to the public in manageable form over the Internet. It is through these intermediaries that the disclosure law attains its goal of turning on the light.

But that light shines only on donors, and individual donors can stay in the dark by contributing through limited liability companies (LLCs). Companies large and small do business as LLCs, and most of them make their officers and operations a matter of public record. But LLCs can also be opaque, which means that contributions they make will be reported to the FEC as coming from the companies, not from the people who created them.

The use of LLCs to hide donor identities first came to light during the 2012 election, when three such companies each made a $1 million contribution to the pro-Romney super PAC, Restore Our Future. The Campaign Legal Center filed a complaint with the FEC, claiming that the practice violated the FECA prohibition against making contributions in someone else's name. When the commissioners got around to voting on the complaint, they deadlocked on whether to investigate it. This does not mean the agency found the practice to be legal, only that it did not find it to be illegal; it is still in a gray area of the law, but it is now a much lighter shade of gray. There were already more LLC contributions in 2016 than there had been four years earlier, and the FEC deadlock may make the practice more widespread.15

 
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