A Point For Democracy: Obama Advances Toward an Executive Order on Political Disclosure for Federal Contractors

, lead analyst, Center for Science and Democracy | February 8, 2016, 3:24 pm EDT
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Last June, I wrote an open letter to President Obama asking him to issue an executive order to bring more transparency to corporate political disclosure. This is a step that I, along with many others, want to see Obama take before he leaves office—and now it just may happen. Such a move is needed now more than ever, but we know the President faces opposition from trade groups like the US Chamber of Commerce, who’d like to keep their funding sources a secret.

Expensive elections and secret donors

In his recent State of the Union address, President Obama talked about the need for better politics and reduced influence of money on elections. Now he may act on his word. Photo: White House / Amanda Lucidon

In his recent State of the Union address, President Obama talked about the need for better politics and reduced influence of money on elections. Now he may act on his word. Photo: White House / Amanda Lucidon

To date, discussion of candidates for the 2016 presidential election has focused a lot on money. Who is being influenced by corporate interests? Which candidate’s policy positions are based on who is writing them checks? And who is “independent”? To be sure, concerns about corporate funding of presidential candidates are more than a century old, but recently they’ve reached new heights. The 2012 election cycle was the most expensive ever and 2016 is poised to shatter it. To date, $6.75 million in secret money has been spent in the 2016 election cycle compared to $4.84 million spent at this point in the 2012 cycle.

While the problem might seem insurmountable, President Obama can take steps that would go a long way. In fact, the President used his recent State of the Union address to highlight the problems associated with money in politics. “[D]emocracy breaks down when the average person feels their voice doesn’t matter; that the system is rigged in favor of the rich or the powerful or some narrow interest,” he stated. He then went on to assert, “We have to reduce the influence of money in our politics, so that a handful of families and hidden interests can’t bankroll our elections.”

Now I’m thrilled to see that President Obama may act on these words and issue an executive order asking companies that bid on contracts with the federal government to disclose their political spending. And that’s not a small sampling of companies; a Public Citizen study found that such a rule would apply to 70 of Fortune 100 companies, including fossil fuel giants like ExxonMobil and Chevron, and industrial heavy hitters like Dow and General Electric.

Trade groups fear loss of their secret funding

But the President faces opposition. Trade groups, in particular, fear they’ll lose their funding. In a letter obtained by the Center for Public Integrity, the CEOs of the US Chamber of Commerce, the National Association of Manufacturers, and the Business Roundtable told their member companies to resist pressure to disclose their political spending.

Why are they so fearful? Currently, trade groups operate in a sweet spot. They can lobby without limit as long as lobbying is not their primary purpose and they don’t have to disclose their funding sources. For companies, this is a great deal. Companies can outsource their political activities to their business and trade associations, who can in turn lobby aggressively with those corporate dollars. Trade groups are able to do the political dirty work, taking positions that companies might not be willing to stand behind publicly.

And we know companies don’t always agree with their trade groups. A 2014 Union of Concerned Scientists report found that the majority of board members of the US Chamber of Commerce and the National Association of Manufacturers don’t publicly agree with those groups’ positions on climate change. Yet, as board members, these companies are able to maintain climate-friendly public images, while privately funding these business groups to undermine policy efforts to address climate change.

Companies should be held accountable for their political spending

The US Chamber and other business and trade associations are worried that if companies had to publicly disclose their payments to them, these groups would lose donations. But such payments should be public. Americans deserve to know who is influencing their policymakers. As the 2016 election is demonstrating, the stakes (and dollars) are higher than ever. The more secret money that flows to political candidates, the less accountable our elected leaders are to the American people. We can do better as a nation and President Obama knows it too. An executive order on corporate political disclosure brings us a step closer to an accountable, transparent democracy.

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