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RULES OF THE GAME

Transparency v. Free Speech

The argument that secrecy and non-disclosure are necessary to uphold the First Amendment rings hollow.

It’s become popular in certain circles to assail political transparency as a nefarious threat to free speech.

Once a bipartisan touchstone, campaign finance disclosure rules are now the target of court challenges, lawmakers, and opinion leaders on the right. The Wall Street Journal has accused the White House of using disclosure to attack the First Amendment rights of its political opponents. The Center for Competitive Politics has accused reform advocates of attempting “to strip away the right of citizens to privately associate and support organizations that share their values.”

 


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This pro-secrecy drumbeat takes the ongoing assault on election laws to a new extreme. Not too long ago, Republicans on Capitol Hill championed deregulation coupled with disclosure as the solution to the campaign finance mess. Now they have a new talking point: Anonymity is essential to the First Amendment.

It’s an argument that flies in the face of common sense, public opinion and legal precedent. It’s also profoundly dangerous and self destructive. For corporations, trade associations, and politically active nonprofits, secretive political spending carries significant practical and reputational risks. It runs counter to American values.

 

Let’s acknowledge that the disclosure rules on the table, from President Obama’s draft executive order to force more reporting on government contractors, to the so-far unsuccessful Disclose Act, might or might not strike the right balance. Let’s also acknowledge that public reporting rules of any kind must respect the First Amendment.

But clumsily written rules or bills do not justify the sweeping culture of secrecy that many self-styled free speech champions now advocate. A basic principle still holds: Transparency is vital to democracy and even free markets. Obscure, undercover corporate dealings helped usher in the financial meltdown that still plagues us today. And flooding the political system with secret money invites corruption and scandal.

The most persuasive case for disclosure these days comes not from good government watchdogs, whose warnings strike many conservatives as alarmist and ideologically motivated. It comes from the American business community, including stockholders, small business owners, and even some corporate executives.

These businessmen and women have grasped what many political players overlook: That trust, transparency and the rule of law are fundamental to our national success. These are quintessential American guideposts, and help explain why, for all our problems, we still enjoy the world’s most robust, resilient political and economic system. One need only look to Iraq and Afghanistan to appreciate how corruption and bribery corrode democracy.

 

That’s why some corporate titans, such as Merck and Microsoft Corp., to name a couple, have gone out of their way to publicly post not just their political donations but also the money they give to trade associations, which would go otherwise unreported.

Such trade groups dramatically upped their undisclosed political spending in the wake of last year’s landmark Supreme Court ruling to deregulate corporate campaign money.
Merck closely monitors and prominently posts not just political contributions, but donations to so-called 527 groups and trade association dues that are used for advocacy or politics. Microsoft has gone further, swearing off both independent campaign expenditures and contributions to 527 groups. Microsoft also publicly posts both its campaign contributions and its trade association dues; tracks what portion of that money trade groups spend on politics or lobbying, and discloses that publicly, too.

“We saw a thought-leadership opportunity there for us; it was consistent with our commitment to transparency,” said Dan Bross, Microsoft’s senior director of corporate citizenship. The notion that full disclosure chills free speech “just doesn’t ring true for me,” said Bross, adding that disclosure is good business practice.

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“Our business model depends in part on trust—trust that we are making good products, trust that we are developing the services we’ve promised to deliver,” Bross explained. “And I think a basis to rebuild trust in American corporations is by being more transparent.”
A group of small business leaders sounded a similar note recently when they split with heavy-hitting business groups to actually defend Obama’s plan to impose broader disclosure rules on federal contractors. The government has a nasty habit of doling out federal contracts to the companies that write the fattest checks, they complained.

Main Street does things on the up and up, they argued. As Henry Passapera, a New Jersey aircraft parts manufacturer put it: “As a small business owner, I stand by my word. And when I want to have my voice heard, I sign my name at the bottom.”

In a long string of landmark cases, the Supreme Court has consistently defended the public interest in requiring campaign money to be disclosed. As election lawyer Ciara Torres-Spelliscy has noted, these interests include the right of voters to know who paid for any given political ad; the powerful role public opinion plays in deterring corruption; and the impossibility of enforcing campaign finance rules without some form of reporting and disclosure.

To state the obvious, transparency promotes government accountability; free and fair elections; the rule of law; competition and free markets. It is essential to democracy. And democracy itself is essential to freedom of speech. The greatest First Amendment threat on the horizon, therefore, is not disclosure. It’s secrecy.

This article appears in the May 23, 2011 edition of NJ Daily.

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Michael, Executive Director

Concise coverage of everything I wish I had hours to read about."

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Ray, Professor of Economics

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