The DISCLOSE Act (H.R. 5175):
Overview and Analysis
R. Sam Garrett
Analyst in American National Government
L. Paige Whitaker
Legislative Attorney
Erika K. Lunder
Legislative Attorney
May 28, 2010
Congressional Research Service
7-5700
www.crs.gov
R41264
CRS Report for Congress
P
repared for Members and Committees of Congress

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The DISCLOSE Act (H.R. 5175): Overview and Analysis

Summary
As it has periodically for decades, Congress is again considering how or whether to regulate
campaign financing. The latest iteration of the debate over which kinds of groups should be
permitted to spend funds on political advertisements, and how so, was renewed on January 21,
2010, when the Supreme Court of the United States issued its decision in Citizens United v.
Federal Election Commission. Following Citizens United, corporations and labor unions may
now fund political advertisements explicitly calling for election or defeat of federal candidates—
provided that the advertisements are not coordinated with the campaign. The legislative response
receiving the most attention to date—and the emphasis of this report—is the House version of the
DISCLOSE (“Democracy is Strengthened by Casting Light on Spending in Elections”) Act, H.R.
5175, sponsored by Representative Van Hollen. This bill was reported, as amended, by the
Committee on House Administration on May 25, 2010. Senator Schumer has introduced a
companion measure, S. 3295.
This report provides an overview and analysis of (1) major policy issues addressed in Citizens
United and the DISCLOSE Act; (2) major provisions of H.R. 5175 versus current federal
campaign finance law; and (3) issues for congressional consideration and potential implications
of enacting or not enacting the DISCLOSE Act. H.R. 5175 proposes a combination of disclosure
and disclaimer provisions designed to provide additional information to regulators and the public
about political advertising that could emerge following Citizens United. The legislation also
prohibits government contractors, foreign nationals (including some U.S. subsidiaries of foreign
corporations), and recipients of Temporary Asset Relief Program (TARP) funds from making
certain political expenditures. A variety of issues for Congress discussed in this report, such as
how various provisions in the bill might be interpreted or implemented, may be relevant for
House and Senate consideration of the DISCLOSE Act.
The report will be updated as events warrant.

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The DISCLOSE Act (H.R. 5175): Overview and Analysis

Contents
Introduction ................................................................................................................................ 1
Evolution of Policy and Legal Issues........................................................................................... 2
Citizens United v. Federal Election Commission ......................................................................... 3
Congressional Response.............................................................................................................. 4
Legislative Action on the DISCLOSE Act Thus Far..................................................................... 5
An Overview of H.R. 5175, As Reported..................................................................................... 6
Major Differences Between the House and Senate Bills......................................................... 7
Potential Implications and Considerations for Congress............................................................... 7
General Considerations ......................................................................................................... 7
Maintaining the Status Quo ................................................................................................... 8
Modifying the Definitions of Independent Expenditures and Electioneering
Communications ................................................................................................................ 9
Entities Covered by the Disclosure and Disclaimer Provisions............................................... 9
Prohibitions on Making Contributions or Expenditures........................................................ 10
Government Contracts .................................................................................................. 10
TARP Recipients........................................................................................................... 11
Foreign Nationals.......................................................................................................... 11
Coordinated Party Expenditures .......................................................................................... 11
Potential Effects of Disclosure and Disclaimer Provisions ................................................... 12
Campaign-Related Activity Accounts .................................................................................. 13
Potential Implementation Concerns ..................................................................................... 13
Conclusion................................................................................................................................ 14

Tables
Table 1. Comparison of Major Provisions of H.R. 5175 With Current Federal Campaign
Finance Law .......................................................................................................................... 15

Contacts
Author Contact Information ...................................................................................................... 22
Acknowledgments .................................................................................................................... 22

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The DISCLOSE Act (H.R. 5175): Overview and Analysis

Introduction
Political information—particularly political advertising—has been at the heart of American
campaigns and elections for more than a century. Throughout the last century, candidates, parties,
and interest groups have competed to make their case to voters in the hopes of winning elections
and shaping policy debates. At the same time, Congress, regulatory agencies, and the courts have
wrestled with how much, and what kind, of information should be available to the public about
the sources of those political messages. Questions have also emerged about whether certain
actors, such as corporations and unions, should be permitted to participate in elections and other
political debates to the same extent as voters. Modern campaign finance policy and law, which
emerged in the 1970s, but which built on reforms first pursued in the early 1900s, has responded
with a combination of provisions designed to restrict the amounts and sources of funds in federal
elections on one hand, and documenting the sources and amounts of funds that are permitted on
the other.1
Political advertising has both enabled the public to become more informed about campaigns and
policy contests, and, perhaps, made it more challenging for the electorate and policymakers to
keep track of the various players and issues involved in political debates. This has been
particularly true since the 1960s, when broadcast political advertising first became prominent,
political professionals began to specialize in media production, and the electorate increasingly
turned to television for information.2
The latest iteration of the debate over which corporations, unions, and other groups should be
permitted to spend funds on political ads, and how so, was renewed on January 21, 2010, when
the U.S. Supreme Court issued its highly anticipated decision in Citizens United v. Federal
Election Commission (FEC).3 The DISCLOSE Act, “Democracy is Strengthened by Casting
Light on Spending in Elections,” which the Committee on House Administration reported, as
amended, on May 25, 2010, is the most prominent legislative response to Citizens United to date.
As with the case itself, the DISCLOSE Act is particularly relevant for the ongoing policy debate
surrounding political advertising and its transparency.
This report is designed to provide an overview and analysis of (1) major policy issues addressed
in Citizens United and the DISCLOSE Act; (2) major provisions of H.R. 5175 compared with
current federal campaign finance law, as shown in Table 1 at the end of this report; and (3) issues
for congressional consideration and potential implications of enacting or not enacting the
DISCLOSE Act.4 Although the report briefly discusses the Senate companion measure, it

1 On the development of federal campaign finance policy and law, see, for example, Kurt Hohenstein, Coining
Corruption: The Making of the American Campaign Finance System (DeKalb, IL: Northern Illinois University Press,
2007); Robert E. Mutch, Campaigns, Congress, and Courts: The Making of Federal Campaign Finance Law (New
York: Praeger, 1988); Raymond J. La Raja, Small Change: Money, Political Parties, and Campaign Finance Reform
(Ann Arbor, MI: University of Michigan Press, 2008); and John Samples, The Fallacy of Campaign Finance Reform
(Chicago: University of Chicago Press, 2006).
2 See, for example, Stephen Ansolabehere, Roy Behr, and Shanto Iyengar, The Media Game: American Politics in the
Television Age (New York: Macmillan, 1993); and Crowded Airwaves: Campaign Advertising in Elections, eds. James
A. Thurber, Candice J. Nelson, and David A. Dulio (Washington: Brookings Institution Press, 2000).
3 130 S. Ct. 876 (2010).
4 This report does not provide a constitutional analysis and does not address all policy or legal factors that might be
relevant for Congress. For analysis of the constitutionality of possible legislative responses to Citizens United, see CRS
Report R41096, Legislative Options After Citizens United v. FEC: Constitutional and Legal Issues, by L. Paige
(continued...)
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primarily addresses the House measure, as reported. As the two bills are substantially similar,
much of the following analysis of H.R. 5175 is also relevant for S. 3295. Additional material
about the Senate bill will be added in future updates.
Evolution of Policy and Legal Issues
Citizens United is significant because of its potential to change the ways in which corporations,
unions, and tax-exempt organizations participate in American elections. Although restrictions on
those actors have evolved over time, corporations, unions, and certain tax-exempt organizations
were largely banned from spending treasury funds in federal elections for decades. As a result of
Citizens United, these groups are permitted to use general treasury funds to make independent
expenditures, which are defined as communications “expressly advocating the election or defeat
of a clearly identified candidate” and that are not coordinated with any candidate or party,5 and
electioneering communications, which are defined as broadcast, cable or satellite transmissions
that refer to a clearly identified federal candidate, aired within 60 days of a general election or 30
days of a primary.6 Corporations and unions are still subject to the prohibition on using general
treasury funds to make contributions to candidates and political parties.7
The 1907 Tillman Act, 8 which is considered to be the first major federal campaign finance law,
prohibited corporations from making contributions to political parties. With the 1947 Taft-Hartley
Act,9 Congress expanded the prohibition to include corporate contributions to both parties and
candidates, as well as expenditures in federal elections. Taft Hartley also included labor unions in
the prohibition. The early prohibitions on corporate and labor union treasury funded contributions
and expenditures were included in the first modern federal campaign finance law, the Federal
Election Campaign Act of 1971, also known as FECA. 10 The prohibitions are codified at 2 U.S.C.
§ 441b. In an exception to the prohibition on corporate and union treasury spending, FECA
allows for the creation of separate segregated funds or political action committees, also known as
PACs. Specifically, corporations and unions can use their treasury funds to establish, operate and
solicit voluntary, limited contributions to their PACs.11 These voluntary PAC donations can then
be used to contribute to federal campaigns or to make expenditures that expressly advocate
election or defeat of federal candidates.
In the 1976 landmark Supreme Court decision, Buckley v. Valeo,12 the constitutionality of many
provisions in FECA was challenged. This case is important because it established the framework
for constitutional analysis of campaign finance regulation. In Buckley, the Court upheld

(...continued)
Whitaker et al. For analysis of the policy implications of various legislative options, see CRS Report R41054,
Campaign Finance Policy After Citizens United v. Federal Election Commission: Issues and Options for Congress, by
R. Sam Garrett.
5 2 U.S.C. § 431 (17).
6 2 U.S.C. § 434(f)(3).
7 2 U.S.C. § 441b(a).
8 34 Stat. 864.
9 61 Stat. 136.
10 Codified as amended at 2 U.S.C. § 431 et seq.
11 2 U.S.C. § 441b(b)(2)(C).
12 424 U.S. 1 (1976).
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reasonable contribution limits, invalidated certain expenditure limits, and upheld reporting and
disclosure requirements. In addition, the Court created the distinction between issue advocacy and
express advocacy, finding that a communication could be regulated if it contained words express
advocacy of the election or defeat of a candidate, which includes words such as “vote for” or
“vote against.” By contrast, such ads could not be regulated if they only contained general public
policy messages that fell short of calling for election or defeat of candidates, sometimes referred
to as issue advocacy. A generation would pass between the enactment of FECA and the next time
that Congress would again enact major campaign finance legislation—the Bipartisan Campaign
Reform Act of 2002 (BCRA)—but political advertising and the funding sources for that
advertising remained prominent during both legislative debates.
As the legislation that became BCRA was being debated in the late 1990s and early 2000s, a chief
concern surrounding issue advocacy was whether the ads were actually about public policy
issues—as proponents of the advertisements suggested—or whether they were really messages
designed to encourages votes for or against candidates within in the context of ads that were only
nominally related to public policy.13 In an effort to restrict issue advocacy, BCRA created a new
concept within FECA known as electioneering communications in order to regulate messages that
might affect elections, but did not expressly advocate for the election or defeat of a clearly
identified federal candidate. Importantly, BCRA prohibited corporations and unions from using
general treasury funds to pay for electioneering communications, meaning that potentially any ad
that even mentioned a political candidate during pre-election periods would have to be paid for
with PAC funds or not aired.
In 2007, in FEC v. Wisconsin Right to Life, Inc.,14 the Supreme Court limited the application of
the prohibition, thereby easing some restrictions on corporate- and union-funded ads that would
otherwise be classified as electioneering communications. As a result of the Court’s ruling, if an
advertisement could reasonably be interpreted as something other than calling for a vote for or
against a candidate, it could not be prohibited. While this ruling limited the application of the
electioneering communication prohibition, it did not expressly overrule it.
Citizens United v. Federal Election Commission
Citizens United, a corporation exempt from taxes under Internal Revenue Code (IRC) §
501(c)(4), produced a documentary about a presidential candidate, then-Senator Hillary Clinton.
The group released the film in theaters and on DVD, and planned to make it available through
video-on-demand and to fund broadcast and cable television advertisements promoting the movie.
In Citizens United v. Federal Election Commission (FEC),15 the U.S. Supreme Court considered
to what extent the organization was subject to the federal prohibitions on corporate treasury

13 For a historical overview, see, for example, Anthony Corrado et al., The New Campaign Finance Sourcebook
(Washington: Brookings Institution Press, 2005), pp. 35-47.
14 551 U.S. 449 (2007). For additional discussion, see CRS Report RS22687, The Constitutionality of Regulating
Political Advertisements: An Analysis of Federal Election Commission v. Wisconsin Right to Life, Inc., by L. Paige
Whitaker; and CRS Report RL34324, Campaign Finance: Legislative Developments and Policy Issues in the 110th
Congress, by R. Sam Garrett.
15 130 S. Ct. 876 (2010). For additional discussion, see CRS Report R41045, The Constitutionality of Regulating
Corporate Expenditures: A Brief Analysis of the Supreme Court Ruling in Citizens United v. FEC, by L. Paige
Whitaker.
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funding of independent expenditures, electioneering communications, and related reporting
requirements.
On January 21, 2010, the Supreme Court issued its long-awaited ruling in this case, and
invalidated the prohibition on corporations and labor unions using their general treasury funds to
make independent expenditures and electioneering communications. The Court determined that
these prohibitions constitute a “ban on speech” in violation of the First Amendment.16 In so doing,
the Court also overturned its 1990 ruling in Austin v. Michigan Chamber of Commerce,17 which
had upheld restrictions on corporate-funded independent expenditures, finding that it provided no
basis for allowing the government to limit such independent expenditures. The Court also
overturned the portion of its decision in McConnell v. FEC18 upholding the facial validity of the
prohibition on electioneering communications in BCRA, finding that the McConnell Court relied
on Austin.19
The Court in Citizens United, however, upheld the disclaimer and disclosure requirements for
electioneering communications as applied to the documentary. These requirements, the Court
held, could be applied to the film and related advertisements that Citizens United had produced.20
According to the Court, while they may burden the ability to speak, disclaimer and disclosure
requirements “impose no ceiling on campaign-related activities.”21
It does not appear that the Court’s ruling in Citizens United affects the validity of Title I of
BCRA,22 which generally bans the raising of unregulated, also known as “soft,” money by
national parties and federal candidates or officials, and restricts soft money spending by state
parties for “federal election activities.” Furthermore, Citizens United does not appear to affect the
ban on corporate or union contributions to political candidates. As a consequence of Citizens
United, federal campaign finance law does not limit corporate and labor union treasury funding
for independent expenditures and electioneering communications. Corporations and unions may
still establish PACs, but are only required to use PAC funds in order to make contributions to
candidates, parties, and other political committees.
Congressional Response
Given these developments, questions have emerged about how political advertising might be
affected by the Court’s decision in Citizens United and whether the airwaves will be flooded with
corporate and labor union express advocacy.23 Similar questions have arisen about the extent to

16 Id. at 898.
17 494 U.S. 652 (1990).
18 540 U.S. 93 (2003).
19 See Citizens United, 130 S. Ct. at 912-14 . For further discussion of McConnell v. FEC and Austin v. Michigan
Chamber of Commerce, see CRS Report RL30669, The Constitutionality of Campaign Finance Regulation: Buckley v.
Valeo and Its Supreme Court Progeny, by L. Paige Whitaker.
20 See id. at 913-15.
21 Id. at 914 (quoting Buckley v. Valeo, 424 U.S. 1, 64 (1976)).
22 See 2 U.S.C. § 441i(a).
23 For an overview of the questions and points of debate referenced in this section, see, for example U.S. Congress,
House Committee on House Administration, DISCLOSE Act, report to accompany H.R. 5175, 111th Cong., 2nd sess.,
May 25, 2010, H.Rept. 111-492 (Washington: GPO, 2010).
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which the Court’s decision might lead to increased campaign activity by tax-exempt
organizations, particularly § 501(c)(4) social welfare organizations and § 501(c)(6) trade
associations. Many of the these organizations are incorporated, and thus, prior to Citizens United,
were generally prohibited from using their treasury funds for independent expenditures and
electioneering communications.24 Additionally, all § 501(c) organizations, regardless of whether
they were incorporated, could not serve as conduits for corporate or labor union treasury funds to
fund independent expenditures and electioneering communications. In light of the Court’s
decision in Citizens United, some are expecting increased campaign activity by tax-exempt
organizations. Additionally, some have expressed concern that organizations might be used as
shadow groups—groups to which corporations, other entities, and individuals might give funds to
engage in campaign activity with little or no public disclosure.
Because this is the first time in modern history that corporate and union independent expenditures
have been permitted at the federal level, it remains to be seen how much additional money, if any,
might flow into the political system. A more complete understanding of how Citizens United will
affect the political environment, including campaign spending, will likely be unavailable until
after the 2010 election cycle, at the earliest. Proponents of legislative action have, nonetheless,
argued that preemptive legislation is necessary to avoid or at least document an expected
onslaught of new political advertising.
Legislative Action on the DISCLOSE Act Thus Far
Legislative responses to Citizens United began developing immediately after the January 21
ruling. More than 40 bills that are potentially relevant have been introduced in the 111th
Congress.25 The primary focus has been on the DISCLOSE Act. Representative Van Hollen
introduced the House measure, H.R. 5175, on April 29, 2010. Senator Schumer introduced the
Senate version, S. 3295, on April 30, 2010.
Although committees in both chambers have held hearings on Citizens United, the House has
largely focused on the DISCLOSE Act.26 Both the Committee on House Administration and
House Judiciary Subcommittee on the Constitution, Civil Rights, and Civil Liberties held
hearings to assess the Citizens United ruling on February 3, 2010. The Committee on House
Administration held two hearings on H.R. 5175 specifically, on May 6, 2010, and May 11, 2010.

24 An exception existed for qualified nonprofit corporations, which were defined as a § 501(c)(4) corporation meeting
the following criteria: (1) its only express purpose is the promotion of political ideas;v44 (2) it cannot engage in
business activities; (3) it has no shareholders or other persons with an ownership interest or claim on the organization’s
assets or who receive any benefit from the corporation that is a disincentive for them to disassociate themselves from
the corporation’s position on a political issue; and (4) it was not established by and does not accept donations from
business corporations. 11 C.F.R. § 114.10(c). The regulatory criteria for “qualified nonprofit corporations” is based on
the U.S. Supreme Court ruling in FEC v. Massachusetts Citizens for Life, Inc. (MCFL), 479 U.S. 238 (1986), holding
that the FECA prohibition on corporations using their treasury funds to make independent expenditures could not
constitutionally be applied to certain non-profit corporations.
25 See CRS Report R41054, Campaign Finance Policy After Citizens United v. Federal Election Commission: Issues
and Options for Congress, by R. Sam Garrett.
26 Thus far, the Senate Committee on Rules and Administration and Committee on the Judiciary have both held
Citizens United hearings, although those hearings did not address specific legislation per se.
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The committee held a markup on May 20, 2010, when H.R. 5175 was ordered favorably reported,
as amended.27
The versions of the bill as introduced and as reported from the Committee on House
Administration are generally similar. Among others, amendments adopted at the markup modified
the bill to
• raise the threshold for prohibiting expenditures by government contractors from
contracts valued of at least $50,000 to contracts of at least $7 million;
• clarify that Internet communications are generally not subject to FECA’s
disclosure and disclaimer requirements, except for paid political advertising;
• require that independent expenditures and electioneering communication reports
be filed electronically and in a format that permits sorting and searching data (for
reports with at least $10,000 in expenditures); and
• require automated political telephone calls (robo calls) to include “stand-by-
your-ad” disclaimers.28
An Overview of H.R. 5175, As Reported
Table 1 analyzes major provisions of current law compared with the House version of the
DISCLOSE Act. In brief, major provisions in the DISCLOSE Act would
• expand the current definitions of independent expenditure and electioneering
communication, thereby mandating expanded disclosure and disclaimer
requirements for certain political advertisements run by corporations, unions, and
certain 527 or 501(c) organizations (covered organizations), and broadening the
kind of ads that may be subject to FECA prohibitions;
• require covered organizations to report to the FEC information about their donors
(including transfers) and spending for certain independent expenditures and
electioneering communications;
• require corporate chief executive officers or other high-ranking officials in
covered organizations to state their approval for advertising content, similar to
current “stand by your ad” requirements for candidate ads;

27 The Committee reported the bill on May 25, see U.S. Congress, House Committee on House Administration,
DISCLOSE Act, report to accompany H.R. 5175, 111th Cong., 2nd sess., May 25, 2010, H.Rept. 111-492 (Washington:
GPO, 2010). Also in the House, on March 11, the Committee on Financial Services, Subcommittee on Capital Markets,
Insurance, and Government Sponsored Enterprises, held a hearing addressing corporate governance and shareholder
protection after Citizens United. In addition to exploring general themes, various legislative proposals, including
Representative Capuano’s Shareholder Protection Act (H.R. 4790), were discussed. At the May 20, 2010, Committee
on House Administration markup, Rep. Capuano initially offered the Shareholder Protection Act as an amendment to
the DISCLOSE Act. He ultimately withdrew the amendment, saying that it would be pursued separately.
28 For additional discussion of automated political calls, see CRS Report RL34361, Automated Political Telephone
Calls (“Robo Calls”) in Federal Campaigns: Overview and Policy Options, by R. Sam Garrett and Kathleen Ann
Ruane.
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• prohibit certain government contractors, Troubled Asset Relief Program (TARP)
recipients, and organizations subject to certain control or ownership by foreign
nationals from making expenditures or contributions in federal elections; and
• remove existing limits on coordinated party expenditures in some
circumstances.29
Major Differences Between the House and Senate Bills
The House and Senate versions of the DISCLOSE Act are substantially similar. The Senate bill,
however, addresses at least two topics that are excluded from the House bill. First, and perhaps
most notably, S. 3295, would address certain broadcasting provisions, including the lowest unit
rate (LUR, also called the lowest unit charge).30 Currently, the LUR essentially entitles candidate
campaigns to purchase advertising time at the cheapest rates offered to commercial advertisers
seeking to purchase the same class of time on the same day. Among other amendments to
broadcasting provisions, S. 3295 would provide national party committees with access to the
LUR.
A second issue addressed in S. 3295, but not in H.R. 5175, concerns electronic filing of Senate
campaign finance reports.31 Unlike all other federal political committees (except those raising or
spending less than $50,000 annually), Senate campaign committees, party committees, and PACs
currently are not required to file campaign finance reports electronically. Senate reports are also
unique because they are filed with the Secretary of the Senate rather than directly with the FEC.
S. 3295 would require Senate political committee reports to be filed electronically and directly
with the Commission.
Potential Implications and Considerations
for Congress
General Considerations
As Congress evaluates the DISCLOSE Act, several factors could be relevant. It could first be
useful to consider what the bill would and would not do. In short, the DISCLOSE Act’s
provisions are essentially tailored to political advertising—the main policy issue raised by
Citizens United. In brief, the DISCLOSE Act appears aimed at documenting additional political
advertising in general, and restricting it where potential corruption might occur in specific
circumstances. Nonetheless, the bill would not necessarily affect political spending per se, nor
would it necessarily deter those entities that wished to call for election or defeat of federal

29 Coordinated party expenditures permit parties to make purchases benefitting their candidates, and to do so in concert
with those candidates. Additional discussion appears later in this report and CRS Report RS22644, Coordinated Party
Expenditures in Federal Elections: An Overview, by R. Sam Garrett and L. Paige Whitaker.
30 47 U.S.C. § 315(b).
31 2 U.S.C. § 432(g). For additional discussion, see CRS Report R40091, Campaign Finance: Potential Legislative and
Policy Issues for the 111th Congress, by R. Sam Garrett.
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candidates. As such, the bill would not necessarily ensure an equal playing field among various
political advertisers—including campaigns—nor could it necessarily do so.
In general, the bill would broadly apply additional disclosure and disclaimer provisions to entities
making independent expenditures and electioneering communications, as defined in the bill.
Corporations, unions, and certain tax-exempt § 501(c) and § 527 organizations would all be
subject to these provisions—provided that their activities met the financial and time thresholds
required to classify their communications as independent expenditures or electioneering
communications. On the other hand, the bill’s restrictions on political expenditures are tailored
only to specific kinds of organizations—namely those government contractors, entities subject to
foreign control, or TARP recipients falling under the DISCLOSE Act’s provisions barring certain
political expenditures.
The bill would not, however, directly affect candidate campaigns in most cases. Indeed, the
provisions of the bill appear to be aimed primarily at non-campaign actors, particularly
corporations, unions, and tax-exempt organizations. The bill does not increase contribution limits
for candidate campaigns; it also generally does not address other political committees—parties
and PACs. A notable exception, discussed below, would permit parties to make additional
coordinated expenditures supporting their candidates. This is the only instance in which the bill
explicitly allows for more political spending than would be possible under the status quo.
In addition to the general policy approaches described above, specific provisions in the legislation
could be the subject of debate during House and Senate consideration of the DISCLOSE Act.
Because the effects of Citizens United will be unclear until at least the conclusion of the 2010
election cycle, and because of the quickly evolving debate in Congress, all the bill’s major
implications cannot be predicted. The following sections discuss some of the potential
implications of the bill, which Congress may wish to consider when evaluating the legislation.
Maintaining the Status Quo
If Congress chooses to maintain the status quo by not enacting a legislative response, some argue
that certain spending by corporations, unions, and tax-exempt organizations to influence elections
could go undocumented under current campaign finance law. In particular, it is possible that
under certain circumstances, undisclosed funds could be transferred from one organization to
another for the purpose of funding independent expenditures or electioneering communications.
Those organizations that the bill proposes to prohibit making expenditures, such as certain U.S.
subsidiaries of foreign corporations, would also be free to fund advertising as they saw fit. On the
other hand, if substantial additional spending following Citizens United does not occur, it is
possible that additional legislative action is unnecessary. In addition, some might contend that
existing law is sufficient to cover many of the topics addressed in the DISCLOSE Act.32

32 See, for example, Letter from Joan D. Aikens, et al., Former Members of the Federal Election Commission, to Reps.
Robert Brady and Dan Lungren, Committee on House Administration, May 19, 2010,
http://www.campaignfreedom.org/docLib/20100519_DISCLOSEcomments05192010.pdf.
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Modifying the Definitions of Independent Expenditures and
Electioneering Communications
As noted previously, now that corporations and unions are free to use general treasury funds for
independent expenditures and electioneering communications, H.R. 5175 proposes to document
such spending through disclosure and disclaimer requirements—and to prohibit some entities
from making such expenditures. The activities to which these requirements would apply depend
largely on how key terms are defined. Importantly, H.R. 5175 would broaden the definitions of
independent expenditures and electioneering communications, thereby expanding the scope of
FECA’s regulation.
Specifically, the bill would expand the definition of independent expenditure to include an
expenditure “that, when taken as a whole, expressly advocates the election or defeat of a clearly
identified candidate, or is the functional equivalent of express advocacy because it can be
interpreted by a reasonable person only as advocating the election or defeat of a candidate, taking
into account whether the communication involved mentions a candidacy, a political party, or a
challenger to a candidate, or takes a position on a candidate’s character, qualifications, or fitness
for office.”33 In other words, it is possible that an advertisement could be subject to DISCLOSE
Act regulation as an independent expenditure even if it does not explicitly call for election or
defeat of a clearly identified candidate if the ad can reasonably be interpreted only as advocating
election or defeat of a candidate. In addition, the bill would double the period (from 60 to 120
days) prior to general election in which communications are treated as electioneering
communications. These provisions are noteworthy because they would affect the kind of political
advertising subject to regulation under the DISCLOSE Act and, by extension, other provisions in
FECA.
Entities Covered by the Disclosure and Disclaimer Provisions
The bill’s disclosure, disclaimer, and shareholder/member reporting requirements would apply to
covered organizations, which would be defined as corporations, labor organizations, tax-exempt §
501(c)(4), (c)(5), and (c)(6) organizations,34 and § 527 political organizations that are not political
committees for purposes of FECA.35 One question that might arise concerns the extent to which
the provisions would apply to tax-exempt organizations. While four types of tax-exempt

33 DISCLOSE Act, § 201.
34 Section 501(c)(4) organizations include social welfare organizations; § 501(c)(5) describes labor, agricultural and
horticultural organizations; and § 501(c)(6) organizations are commonly referred to as trade associations.
35 IRC § 527 provides tax-exempt status to political organizations, which are entities or funds that are organized and
operated primarily to influence “the selection, nomination, election, or appointment of any individual to any Federal,
State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential
electors.... ” Under FECA, political committee is defined to include “any committee, club, association, or other group
of persons which receives contributions aggregating in excess of $1,000 during a calendar year or which makes
expenditures aggregating in excess of $1,000 during a calendar year,” with both contribution and expenditure defined
as monies or anything of value “for the purpose of influencing any election for Federal office.” 2 U.S.C. § 431(4)(A),
(8)(A), (9)(A). With respect to entities engaging in federal election activity, § 527 political organizations include the
entities that are regulated as political committees under FECA. However, political organization is broader than political
committee, in part because it also includes the groups colloquially referred to as 527s that have been controversial in
recent years because they appear intended to influence federal elections in ways that may place them outside the
definition of political committee. For more information on 527s, see CRS Report RS22895, 527 Groups and Campaign
Activity: Analysis Under Campaign Finance and Tax Laws, by L. Paige Whitaker and Erika K. Lunder.
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organizations are expressly listed—those described in IRC § 501(c)(4), (c)(5), (c)(6) and § 527—
the term covered organization could apply to more tax-exempt entities because many are
incorporated, and therefore would appear to fall within the definition of covered organizations as
corporations. It is important to note that the IRC imposes restrictions on the ability of tax-exempt
organizations to engage in campaign activity. For example, § 501(c)(3) charitable organizations
are absolutely prohibited from engaging in campaign activity under the IRC,36 although what
constitutes campaign activity under the IRC and FECA are not always the same.37
Prohibitions on Making Contributions or Expenditures
In addition to its disclosure, disclaimer, and reporting requirements, H.R. 5175 contains several
prohibitions. Specifically, it would prohibit certain government contractors, TARP recipients, and
organizations subject to certain control or ownership by foreign nationals from making
expenditures or contributions in connection with federal elections.
Government Contracts
Section 101 of H.R. 5175 would prohibit government contractors from making electioneering
communications or independent expenditures “only if the value of the contract is equal to or
greater than $7,000,000.” This language appears to suggest that this prohibition is intended to
apply only to contractors holding a single contract of at least $7 million.
As mentioned above, H.R. 5175 as introduced applied to contracts of at least $50,000, but was
later increased to $7 million. Some have suggested that this modification was made to exempt
small business government contractors from the prohibition. While the value of the “average”
federal procurement contract may seem low ($120,634 in FY2008),38 even small businesses
routinely receive much larger contracts,39 arguably providing one rationale for exempting
contractors who have not received a contract valued at more than $7 million from the proposed
ban on independent expenditures and electioneering communications.40 Agencies may, for
example, award contracts valued at up to $3.5 million ($5.5 million for manufacturing contracts)
to small businesses participating in the 8(a) Minority Business Development Program without

36 IRC § 501(c)(3) (prohibiting the organizations described therein from “participat[ing] in, or intervene[ing] in … any
political campaign on behalf of (or in opposition to) any candidate for public office”).
37 For more information, see CRS Report R40141, 501(c)(3) Organizations and Campaign Activity: Analysis Under
Tax and Campaign Finance Laws, by Erika K. Lunder and L. Paige Whitaker.
38 This figure was obtained by dividing the total contract dollars awarded by the total number of contracts, as reported
on USASpending.gov. See http://www.usaspending.gov/explore?carryfilters=on&trendreport=top_cont&fromfiscal=
yes&tab=By+Recipient&fiscal_year=2009&tab=By+Recipient&fiscal_year=2008&fromfiscal=yes&carryfilters=on&
Submit=Go.
39 For purposes of federal procurement, a “small” business is one that is independently owned and operated, is “not
dominant in its field of operation,” and meets any definitions or standards established by the Small Business
Administration. 15 U.S.C. § 632(a)(1)-(2)(A). These standards focus primarily upon the size of the business, as
measured by the number of employees, its annual average gross income, and the size of other businesses within the
same industry. 13 C.F.R. §§ 121.101-121.108. For example, businesses in the field of scheduled passenger air
transportation are small if they have fewer than 1,500 employees, while those in the data processing field are small if
they have a gross income of less than $25 million. 13 C.F.R. § 121.201.
40 The relevant provisions of the DISCLOSE Act appear to apply to the value of each individual contract, not the total
value of contracts received by a particular contractor. However, it is unclear whether the value is measured in terms of
the base contract, or all options under the contract.
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competing them,41 and some small businesses have received contracts valued at over half a billion
dollars.42 “Large” government contractors, in contrast, can receive contracts valued at over $1
billion.43
TARP Recipients
Section 101 of H.R. 5175 would prohibit recipients of TARP funds from directly or indirectly
making contributions, independent expenditures, or electioneering communications. Notably, it
appears that the prohibitions would apply to TARP recipients using TARP funds, as well as their
own funds. The applicable period of the prohibition would begin on the later of the
commencement of the negotiations for such financial assistance under title I of the Emergency
Economic Stabilization Act of 200844 or the date of enactment of H.R. 5175, and end on the later
of the ending of negotiations or the repayment of such financial assistance.
Foreign Nationals
Several questions of interpretation could be raised by Section 102 of the bill, which would apply
existing prohibitions on contributions or expenditures by foreign nationals to “foreign-controlled
domestic corporations.” For example, it is unclear how the FEC or a court would interpret or
administer some of the key terms contained in the various tests of foreign control that Section 102
would establish. One of these tests focuses upon direct or indirect ownership by a foreign national
of 20% or more of the voting shares of a corporation, but would appear to leave the FEC
substantial discretion in determining what constitutes “indirect ownership” or at what point in
time ownership is determined. Another test similarly focuses upon whether one or more foreign
nationals “has the power to direct, dictate, or control the decision-making process of the
corporation with respect to its interest in the United States.” However, this test would also appear
to leave the FEC substantial discretion to determine what forms of conduct or business
arrangements would indicate that a foreign national has the power to “direct, dictate, or control”
corporate decision-making.
Coordinated Party Expenditures
Section 104 of H.R. 5175 appears to lift the existing caps on coordinated party expenditures
unless “the communication is controlled by, or made at the direction of, the candidate or an
authorized committee of the candidate.”45 In the absence of increased contribution limits,
candidates may face substantial obstacles responding to corporate and union advertising post-

41 15 U.S.C. § 637 note; 48 C.F.R. § 19.805-1(b)(2). Certain group-owned 8(a) firms are not subject to even these
limitations and may receive sole-source contracts of any value.
42 Gov't Accountability Office, Contract Management: Increased Use of Alaska Native Corporations’ Special 8(a)
Provisions Calls for Tailored Oversight, GAO-06-399, April 2006, at 15, available at http://www.gao.gov/new.items/
d06399.pdf (reporting a $593 million sole-source award to Chugach Management Services, Inc.).
43 For example, Lockheed Martin Corp., the top federal contractor in FY2009, received five contracts valued at over $1
billion in FY2009. See USASpending.gov, http://www.usaspending.gov/explore?tab=By%20Recipient&contractorid=
359799&fromfiscal=yes&carryfilters=on&fiscal_year=2009.
44 12 U.S.C. § 5211 et seq.
45 For additional discussion of coordinated party expenditures, see CRS Report RS22644, Coordinated Party
Expenditures in Federal Elections: An Overview, by R. Sam Garrett and L. Paige Whitaker.
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Citizens United. Lifting the caps on coordinated party expenditures arguably provides parties with
a way to help their candidates facing potential corporate, union, or tax-exempt organization-
funded advertising. On the other hand, some may object to increasing the amount of money in the
political system, even if it is to respond to corporate or union advertising. In addition, the
standard for communications “controlled by, or made at the direction of, the candidate or an
authorized committee of the candidate” is not defined. Given this potential ambiguity, and an
ongoing FEC rulemaking on coordination, some in Congress might wish to clarify terms.
Potential Effects of Disclosure and Disclaimer Provisions
H.R. 5175 may expand donor disclosure and, in some circumstances, would require disclosing an
organization’s donors even if their donations were not specifically designated to support
independent expenditures or electioneering communications. As noted in Table 1, the bill’s
disclosure provisions primarily include reporting information to the FEC. By contrast, disclaimer
provisions primarily include the stand-by-your ad requirements. Disclosure and disclaimer
requirements would not necessarily, in and of themselves, limit overall spending on political
advertising. Ultimately, corporations, unions, and other groups intent on making independent
expenditures and electioneering communications could choose to do so regardless of disclosure or
disclaimer requirements. The additional reporting requirements proposed in the bill might,
however, cause potential advertisers to consider whether they wish to be publicly accountable for
the advertising.
One notable feature of the bill is that, under certain circumstances, a covered organization would
be deemed to have transferred funds to another entity for the purpose of campaign-related
activity. These deemed transfers would then subject the transferor to potential disclosure. The bill
would provide exceptions for transfers occurring in the ordinary course of business.
The bill would require additional disclosure of donors to covered organizations. The provisions
may be understood, at least in part, as a mechanism to limit the possibility that non-profit
organizations might be used as “shadow groups”—groups to which corporations, other entities, or
individuals would give funds to be used for campaign activities with little or no public disclosure.
A notable aspect of the bill is that it would require the disclosure of certain donors who did not
give money specifically for political activities, unlike, for example, the existing independent
expenditure provision, which only requires the disclosure of donors who gave “for the purpose of
furthering” the expenditure.46
Another potentially notable aspect of the donor disclosure provisions is that they apply to § 527
political organizations that are not political committees under FECA. These would include the Ҥ
527 groups” that have been controversial in recent years because they seem intended to influence
federal elections in ways that might be outside the scope of FECA. Like political committees,
these § 527 groups must periodically report information about their expenditures and donors to a
federal agency47—political committees report to the FEC, while the § 527 groups report to the

46 2 U.S.C. § 434(c)(2)(C); 11 C.F.R. § 109.10.
47 In general, these groups are required to periodically report to the IRS any expenditure of at least $500 and donors
who have given at least $200 during the year. IRC § 527(j). These requirements do not apply to independent
expenditures. For more information, see CRS Report RS21716, Political Organizations Under Section 527 of the
Internal Revenue Code, by Erika K. Lunder; CRS Report RS20918, 527 Organizations and Campaign Activity: Timing
of Reporting Requirements under Tax and Campaign Finance Laws, by Erika K. Lunder and L. Paige Whitaker.
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IRS. In both cases, the information is publicly available. The other types of covered organizations
are not currently subject to similar reporting requirements.
Campaign-Related Activity Accounts
Section 213 of H.R. 5175 would permit covered organizations to establish optional accounts for
campaign-related activity, including independent expenditures and electioneering
communications. Because such accounts do not currently exist, it is unclear how significant this
provision might be. Several issues, however, could be relevant. First, it appears that once an
organization elected to establish the account, it would be required to use that account exclusively
for future campaign-related activity—a strategic or administrative decision that some
organizations might not be willing to make on a permanent basis. Second, the provisions specify
that amounts in the account be “exclusively for disbursements by the covered organization for
campaign-related activity.”48 Given this language, it is unclear whether or not an organization
using a campaign-related activity account could dispose of its funds if it decided to abandon
political spending altogether. If Congress wishes to provide a non-campaign-related mechanism
to do so, existing provisions in FECA permitting charitable contributions could be an option.49
Finally, it should be noted that because the account would not be considered a separate segregated
fund under FECA,50 it appears any § 501(c) organization making expenditures from such an
account could be subject to a 35% tax on the lesser of its net investment income or the taxable
political expenditures.51
Potential Implementation Concerns
Even if Congress enacts the DISCLOSE Act quickly, aspects of the legislation will require
agency implementation. The process could affect how quickly and how clearly the act affects
campaigns and related spending (e.g., independent political advertising). Because the DISCLOSE
Act would primarily amend FECA, the FEC would be responsible for administering and
enforcing most of the bill’s provisions.52
It is possible that the FEC could implement the DISCLOSE Act quickly, although various factors
suggest that it is unlikely the Commission could fully implement the act before the 2010
November general elections.53 In addition to the time required to develop and reach agreement on
rules, for those rules to be finalized (upon publication in the Federal Register), the Commission
would have to also approve an explanation and justification (E&J) statement explaining its
rationale and offering practical guidance about what the regulations mean and how they will be

48 DISCLOSE Act, § 213.
49 2 U.S.C. § 439a(a)(3). These provisions apply to permissible use of candidate campaign committee funds,
suggesting that amendment would be required to make them applicable to campaign-related-activity accounts.
50 DISCLOSE Act, § 213.
51 IRC § 527(f). Because the tax is imposed on the lesser of the taxable political expenditures or the organization’s net
investment income, it would not be a significant disincentive to organizations with minimal investment income or
taxable expenditures.
52 2 U.S.C. § 437c(b).
53 Some primary elections have already occurred without FEC action or legislation implementing the Court’s decision
in Citizens United. Those who believe that the case marked a victory for protected speech might contend that an
apparent lack of overwhelming new advertising could be evidence that additional regulation or legislation responding
to the ruling is unnecessary.
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enforced. This process routinely takes months, even for expedited rulemakings. The Commission
would have to also amend its reporting forms to adhere to the act’s new requirements.
Importantly, FECA requires that adopting rules and developing forms (among other provisions)
requires affirmative votes from at least four of the six Commissioners.54 A series of deadlocked
votes (e.g., 3-3 ties) among members of the current Commission, however, suggests that
disagreement among Commissioners is possible—particularly on controversial or ambiguous
aspects of the legislation.55 If disagreements resulted in deadlock or failure to implement the law
as Congress intends, the DISCLOSE Act’s effectiveness could be delayed or compromised.
Perhaps in response to those concerns, most of the bill’s provisions would become effective 30
days after enactment, with at least one becoming effective immediately upon enactment. The bill
specifies that its provisions would generally take effect regardless of whether the FEC had
promulgated rules to implement the legislation. Nonetheless, the “regulated community” might
lack practical and administrative guidance about how to comply with the act’s provisions until the
Commission could issue rules and begin considering advisory opinions. Nonetheless, even if
rulemaking or amending forms were delayed, the law itself would still take effect as stated in the
act. Therefore, even if some details remained to be determined, enacting the DISCLOSE Act or
other legislation could permit Congress to place additional requirements on political advertisers
or other campaign actors regardless of Commission action or inaction.
Conclusion
It is currently unclear precisely how Citizens United will affect campaigns or political advertising,
but if Congress chooses to enact the DISCLOSE Act, it would provide additional information to
the public and regulators about political advertising funded by corporations, unions, and tax-
exempt organizations. It would also prohibit certain entities from funding electioneering
communications and independent expenditures, as well as providing political parties with greater
ability to make coordinated party expenditures in some cases.
Except for the spending prohibitions in the bill, nothing in the legislation would necessarily
prevent corporations, unions, or other entities from funding political advertising calling for
election or defeat of clearly identified candidates. The disclosure and disclaimer provisions could,
however, provide the public and regulators with additional information about the sources of that
advertising. Public disclosure could also cause would-be advertisers to think carefully before
making political expenditures. For those who believe that Citizens United will usher in a new era
or corporate- or union dominance in elections, such an outcome might be welcome. On the other
hand, those who believe that Citizens United correctly strengthens corporate and union speech
rights might be wary of any provisions perceived as stifling the ability to participate in elections.
As Congress considers the DISCLOSE Act, issues related to how terms are defined, the kinds of
organizations that would be regulated, implementation, and other concerns may be relevant.

54 For a brief overview of Commission duties requiring consensus among at least four Commissioners, see CRS Report
RS22780, The Federal Election Commission (FEC) With Fewer than Four Members: Overview of Policy Implications,
by R. Sam Garrett.
55 For an overview of deadlocked votes during the current Commission’s first year, between July 2008 and June 2009,
see CRS Report R40779, Deadlocked Votes Among Members of the Federal Election Commission (FEC): Overview
and Potential Considerations for Congress, by R. Sam Garrett. Deadlocks have continued on some matters since that
time.
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Table 1. Comparison of Major Provisions of H.R. 5175 With Current Federal
Campaign Finance Law
Overview of Major Relevant
Major Policy
Provisions in Current Federal
Overview of Major Provisions in
Issue
Campaign Finance Law
H.R. 5175, As Reported
Definition of
Independent expenditure is defined as an
Would expand definition of independent
Independent
expenditure “expressly advocating the
expenditure to include an expenditure
Expenditure
election or defeat of a clearly identified
“that, when taken as a whole, expressly

candidate” and that is not made in
advocates the election or defeat of a
coordination with a candidate or party.
clearly identified candidate, or is the
functional equivalent of express advocacy
[2 U.S.C. § 431(17)]
because it can be interpreted by a
According to Supreme Court precedent,
reasonable person only as advocating the
the “functional equivalent of express
election or defeat of a candidate, taking
advocacy” is a communication that is
into account whether the communication
susceptible of no reasonable interpretation
involved mentions a candidacy, a political
other than as an appeal to vote for or
party, or a chal enger to a candidate, or
against a specific candidate.
takes a position on a candidate’s
character, qualifications, or fitness for
[Citizens United v. FEC, 130 S. Ct. 876, 889-
office.”
90 (2010), quoting FEC v. Wisconsin Right to
Life, Inc., 551 U.S. 449, 469-70 (2007)]
Would impose 24-hour reporting
requirement for expenditures of $10,000
or more made during the period up to
and including the 20th day before an
election and expenditures of $1,000 or
more made during the period after the
20th day, but more than 24 hours before
an election.
[§ 201]
Definition of
Electioneering communication is defined as a
Would expand period prior to general
Electioneering
broadcast, cable, or satellite transmission
election in which communications are
Communication
that refers to a clearly identified federal
treated as electioneering communications
office candidate and is made within 60 days
to 120 days.
of a general election (or within 30 days of a
primary).
[§ 202]
[2 U.S.C. § 434(f)(3)(A)(i)(II)]
Definition of
Public Communication is defined as a
Would exempt Internet communications,
Public
communication by means of broadcast,
unless placed for a fee on another
Communication
cable, or satellite communication,
person’s website, from being treated as a
Exempting Free
newspaper, magazine, outdoor advertising
form of “general public political
Internet
facility, mass mailing, or telephone bank to
advertising, “ thereby exempting such
Communications the general public, or any other form of
communications from the definition of
general public political advertising.
public communication.
[2 U.S.C. § 431(22)]
[§ 105]
Involvement in
Foreign nationals are prohibited from
Would prohibit contributions in federal,
Federal
making contributions in federal, state, or
state, or local elections; and independent
Elections by
local elections, and are prohibited from
expenditures and electioneering
Foreign
making independent expenditures and
communications in federal elections by
Nationals
electioneering communications in federal
U.S. corporations if: a foreign national
elections, [2 U.S.C. § 441e], but U.S.
indirectly or directly owns at least 20% of
subsidiaries of foreign corporations may
voting shares; or the majority of the
form PACs to make expenditures and
board are foreign nationals; or one or
contributions under certain circumstances.
more foreign nationals can “direct,
dictate, or control” decision-making of

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Overview of Major Relevant
Major Policy
Provisions in Current Federal
Overview of Major Provisions in
Issue
Campaign Finance Law
H.R. 5175, As Reported
FEC regulations provide that foreign
the corporation with respect to its
nationals shall not “direct, dictate, control,
activities in connection with federal, state,
or directly or indirectly participate” in the
or local elections, including making
decision-making process of a corporation,
contributions, donations, expenditures,
labor union, political committee, or political independent expenditures, disbursements
organization with regard to federal or non-
for electioneering communications or
federal election-related activities, such as
administration of a PAC established or
decisions concerning the making of
maintained by the corporation.
contributions, donations, expenditures, or
[§ 102]
disbursements in connection with federal,
state or local election or regarding the
Would require CEOs (or highest-ranking
administration of a political committee.
corporate official) to certify under penalty
of perjury, to the FEC, before making
[11 C.F.R. § 110.20(i)]
expenditures in connection with federal
office elections, that the foreign-national
prohibitions above do not apply to the
corporation.
[§ 102]
Would clarify that provision does not
prohibit a corporation, which is not a
foreign national, from establishing a
political action committee (PAC) so long
as none of the funds in the PAC are
provided by a foreign national and no
foreign national has power to “direct,
dictate, or control” the PAC.
[§ 102]
Involvement in
Government contractors are prohibited
Would prohibit government contractors
Federal
from making contributions.
holding contracts of $7,000,000 or more
Elections by
from making independent expenditures
Government
[2 U.S.C. § 441c]
and electioneering communications.
Contractors

[§ 101]
Contributions,
Corporations are prohibited from using
Would prohibit entities receiving or
Independent
general treasury funds to make
negotiating for TARP funds from making
Expenditures,
contributions.
contributions, independent expenditures,
and
or electioneering communications until
Electioneering
[2 U.S.C. § 441b(a)]
the funds were repaid (or if the
Communications As a result of Citizens United, it appears that negotiations ended without the entity
by Those
regardless of whether having received
receiving funds).
Receiving TARP
TARP funds, corporations are permitted to
Funds
[§ 101]
make independent expenditures and
electioneering communications.
[Citizens United v. FEC, 130 S. Ct. 876
(2010)]
Stand by Your Ad
Corporations and labor unions funding
Would expand types of communications
Disclaimers in
express advocacy messages are required to
funded by “covered organizations” that
Political
indentify in the communication: their name,
trigger disclaimer requirements to include
Advertising
address, and contact information; and that
disbursements for an “independent
the communication “is not authorized by
expenditure consisting of a public
any candidate or candidate’s committee.”
communication.”
[2 U.S.C. § 441d(a)(3)]
[§ 214]
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The DISCLOSE Act (H.R. 5175): Overview and Analysis

Overview of Major Relevant
Major Policy
Provisions in Current Federal
Overview of Major Provisions in
Issue
Campaign Finance Law
H.R. 5175, As Reported
Corporate and union radio and TV ads are
Would expand disclaimer requirements
required to include an audio statement that
for disbursements by covered
the corporation or union paid for the ad. In organizations for independent
TV ads, the statement is required to be
expenditures or electioneering
conveyed by a view or voice-over of a
communications to require the
corporate or union representative.
organization’s CEO or highest ranking
official or any “significant funder” to state
[2 U.S.C. § 441d(d)(2)]
their approval for the communication, and
Candidates are currently required to state
would require listing the “Top Five
their approval for their broadcast
Funders.”
advertising.
[§ 214]
[2 U.S.C. § 441d(d)(1)]


For automated political telephone calls
For automated political telephone calls
(robo calls):
(robo calls):
Would require political robo calls to
Election law and telecommunications law
include a disclaimer at the beginning of
do not address political robo calls per se.
the call.
Robo calls that advocate for election or
[§ 214]
defeat of candidates or solicit funds appear
to require disclaimers stating who paid for
the communication. [2 U.S.C. § 441d(a)]
Among other requirements,
telecommunications law appears to require
that prerecorded phone calls identify the
entity responsible for the cal at the
beginning of the message [47 U.S.C. §
227(d)(3); 47 C.F.R. § 64.1200(b)(2)].
Disclosure of
In quarterly reports to the FEC, entities
Would require covered organizations
Expenditures
making independent expenditures in excess
making independent expenditures that
of $250 during a calendar year must
aggregate at least $10,000 in a calendar
Disclosure of
disclose donors who contribute more than
year to disclose, within 48 hours:
donors to
$200 “for the purpose of furthering” the
organizations
expenditure. If the entity spends at least
(1) donors who gave at least $600 for
making
$10,000 toward independent expenditures
campaign-related activity or in response
independent
during an election year, those expenditures
to solicitation for funds for such activity;
expenditures
must be reported to the FEC within 48
and
and
hours if the expenditure occurred up to 20
electioneering
(2) donors who gave unrestricted
days before the general election. Entities
communications
donations during the reporting period of
that spend at least $1,000 on independent
at least:

expenditures less than 20 days before the
election must report that spending to the
- $6,000 if the disbursements for “public
FEC within 24 hours. Donors of more than
independent expenditures” were made
$200 must also be included in the 48-hour
exclusively from Campaign-Related
and 24-hour reports.
Activity Account , or
[2 U.S.C. § 434(c)(2)(C); 11 C.F.R. §
- $600 if any disbursement was not from
109.10]
the account.
Entities making at least $10,000 in
For entities making at least $10,000 in
electioneering communications must
electioneering communications, the $600
disclose donors who contribute at least
and $6,000 amounts are increased to
$1,000; however, if the disbursement is
$1,000 and $10,000. Rule would apply in
made from a separate account that contains lieu of existing statutory requirement.
only contributions by U.S. citizens and legal
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Overview of Major Relevant
Major Policy
Provisions in Current Federal
Overview of Major Provisions in
Issue
Campaign Finance Law
H.R. 5175, As Reported
resident aliens made directly to the account Rules would not apply to payments
for electioneering communications, then
received in the regular course of business.
only those donors who contribute at least
$1,000 to the account are disclosed.
[§ 211(a), (b)]
[2 U.S.C. § 434(f)(2)(E), (F)]
If organization uses Campaign-Related
Activity Account, al disbursements for
11 C.F.R. § 104.20 contains rules for
such activity would have to come from
corporations, labor unions, and qualified
the account, and account funds must be
nonprofit corporations that make certain
used “exclusively” for such purposes.
types of electioneering communications. Its
applicability in light of Citizens United is
Account would contain: donations made
unclear.
for “campaign-related activity” or in
response to solicitations for funds for
Section 527 political organizations that are
such activity; and amounts transferred
not political committees under FECA are
from other accounts (including general
generally required to periodical y report
treasury funds). Could not contain funds
information regarding their donors and
the donor/payor said in writing could not
expenditures to the IRS (or a state). Such
be used for such activity.
information is made publically available. The
reporting requirement does not apply to
[§ 213]
expenditures that are independent
If the donation would be disclosed and
expenditures.
the organization and donor “mutually
[26 U.S.C. § 527(j), (k)]
agree” at the time of the donation that
the funds are not to be used for
campaign-related activity, then the
organization’s CFO would have to certify
to the donor, within 30 days of receipt,
that the funds would not be used for such
activity and the person’s identity would
not be disclosed in any manner.
[§ 212]
Disclosure of
No comparable existing statutory
A covered organization would be treated
Expenditures
provision.
as making an independent expenditure or
electioneering communication if it
Transfers
transferred funds to another person for
subsequently
such purpose or was deemed to have
used for
made a transfer.
campaign activity
The organization would be deemed to
have made such a transfer if:
• the transferor designates, requests,
or suggests that the amounts be used
for public independent expenditures
or electioneering communications
and the transferee agrees to do so;
• the person making the expenditure
(or someone acting on his/her behalf)
solicited funds from the transferor or
transferee for making such
expenditures;
• there were “substantial” discussions
about such expenditures between
the transferor and transferee;
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The DISCLOSE Act (H.R. 5175): Overview and Analysis

Overview of Major Relevant
Major Policy
Provisions in Current Federal
Overview of Major Provisions in
Issue
Campaign Finance Law
H.R. 5175, As Reported
• the transferor or transferee knew
(or should have known) of the
transferor’s intent to make such
expenditures; or
• the transferor or transferee made a
public independent expenditure
during the 2-year period ending on
the date of the transfer.
An exception would exist for commercial
transactions occurring in the ordinary
course of business between the transferor
and transferee.
[§ 211(a), (b)]
CEO
No comparable existing statutory
If a covered organization makes a
Certification of
provision.
disbursement for “campaign-related
Certain
activity” during the calendar quarter, the
Information to
CEO or designee would be required to
the FEC
certify to FEC, within 15 days of the
quarter’s end, that the disbursement was
made in compliance with applicable law.
[§ 212]
(See also CEO certification requirements
in the Involvement in Federal Elections by
Foreign Nationals row above. [§ 102])
Disclosure of
Lobbyists must semiannual y report
Would require lobbyists to disclose in
Certain Lobbyist “contributions” exceeding $200 made to
certain Lobbying Disclosure Act (LDA)
Spending
candidates, leadership PACs, or parties.
reports:
[2 U.S.C. § 1604(d)(1)(D)]
(1) independent expenditures of at least
$1,000 funded by those lobbyists; the
(Note: Additional FEC electioneering
names of candidates supported or
communication and independent
opposed in the ads; and the amount spent
expenditure reporting requirements may
supporting or opposing each candidate;
apply to lobbyists in certain circumstances,
but are not intended to apply specifical y to
(2) electioneering communications of at
lobbyists.)
least $1,000 funded by lobbyists; the
names of candidates referred to in the
ads; and whether the ad supported or
opposed the candidate(s).
[§ 221]
Disclosure to
There is no comparable requirement,
A covered organization would be required
Shareholders,
although disclosure may be required to the
to disclose disbursements for campaign-
Members, and
FEC (e.g., for independent expenditures or related activity in any “regular, periodic
Donors of
electioneering communications) or, in the
reports” on its finances/activities provided
Covered
case of tax-exempt organizations, to the
to its shareholders, members, and donors.
Organizations
IRS, and such information is generally
Information would include the date and
subject to public disclosure.
amount spent on independent
expenditures and electioneering
[2 U.S.C. § 434; 26 U.S.C. §§ 527, 6033,
communications, the source of the funds,
6103]
the name of candidates referred to in the
ads and whether the ads supported or
opposed the candidate, and information
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The DISCLOSE Act (H.R. 5175): Overview and Analysis

Overview of Major Relevant
Major Policy
Provisions in Current Federal
Overview of Major Provisions in
Issue
Campaign Finance Law
H.R. 5175, As Reported
about transferred funds.
A covered organization would also be
required to post a hyperlink on its
homepage to the location at the FEC
website which contains the required
reports regarding public independent
expenditures and electioneering
communications.
[§ 301]
Coordination of
Prohibits coordination between a
Would expand time period that
Certain
corporation or union, for most
coordination is prohibited between a
Expenditures
communications, with candidates and
corporation or union and House or
parties made within 90 days before House
Senate candidates, referenced in
or Senate primary or general election and
corporate/union ads, to those made 90
within 120 days of presidential primary,
days before the primary through the
nominating convention or caucus, or
general election.
general election.
Would expand time period that
[11 C.F.R. § 109.21(c)(4)(i), (ii)]
coordination is prohibited between
corporation or union and Presidential or
Provides limits on expenditures by parties
Vice Presidential candidates, referenced in
in connection with federal office candidates. corporate/union ads made 120 days
[2 U.S.C. § 441a(d)]
before the first presidential primary
through the general election.
Safe Harbor for Endorsements/Solicitations:
Provides that a public communication in
Would specify that a covered
which a federal office candidate endorses
communication may not be considered
another federal or non-federal candidate is
coordinated “solely on the grounds” that
not considered coordinated with respect to a person provided information to the
the endorsement of the federal candidate
candidate or committee regarding that
unless the public communication promotes,
person’s position on a legislative or policy
supports, attacks, or opposes the endorsing matter, (including urging the candidate or
candidate or another candidate seeking
party to adopt that person’s position), so
election to the same office. Further
long as there is no discussion regarding
provides that a public communication in
the candidate’s campaign for federal office.
which a federal office candidate solicits
Would expressly preserve FEC
funds for another federal or non-federal
regulations, 11 C.F.R. § 109.21(g) or (h),
candidate, political committee, or tax-
providing safe harbor for endorsements
exempt organization is not considered
and solicitations by federal candidates and
coordinated with respect to the soliciting
for establishment and use of a firewall.
federal office candidate unless the public
communication promotes, supports,
[§ 103]
attacks, or opposes the soliciting candidate
or another candidate seeking election to
Would provide that direct costs incurred
the same office.
by a political party for a communication
made in connection with a federal office
Safe Harbor for Firewalls: Provides that
campaign is not subject to the
“conduct standard,” under which
coordinated party expenditure limits
coordination is found, is not met if
unless the communication is “controlled
commercial vendor, former employee, or
by, or made at the direction of” the
political committee has established a
candidate or the candidate’s authorized
firewal that meets certain requirements.
committee.
Safe harbor provision does not apply if
specific information indicates that despite
[§ 104]
firewall, information regarding candidate or

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The DISCLOSE Act (H.R. 5175): Overview and Analysis

Overview of Major Relevant
Major Policy
Provisions in Current Federal
Overview of Major Provisions in
Issue
Campaign Finance Law
H.R. 5175, As Reported
party campaign plans, projects, activities, or

needs, which are material to the creation,
production, or distribution of the
communication, was used or conveyed to
the person paying for the communication.
Further provides that firewall must prohibit
flow of information between employees or
consultants providing services for the
person paying for the communication and
those employees or consultants providing
services to the candidate, who is clearly
identified in the communication, or the
candidate’s opponent, or a party; and that
the firewall must be described in a written
policy that is distributed to all relevant
employees, consultants, and clients.
[11 C.F.R. § 109.21 (g), (h)]
Judicial Review
—
If the constitutionality of the Act is
challenged, the action shall be filed in U.S.
District Court for D.C. and appealed to
the Court of Appeals for the D.C. Circuit,
with expedited review; any Member of
the House or Senate shal have the right
to intervene or bring suit challenging the
constitutionality.
[§ 401]
Severability
—
If any provision of the Act or application
of a provision is held unconstitutional, the

remainder shall not be affected by the
holding.
[§ 402]
Source: CRS analysis of H.R. 5175 and current federal campaign finance law, or applicable regulations as noted.
Note: H.R. 5175 would change the definitions of independent expenditures and electioneering communications. Thus,
the terms do not have the same meanings in two of the columns. The column describing major provisions in
current law use the terms independent expenditures and electioneering communications as defined under existing
law, while the column describing major provisions in H.R. 5175 uses the expanded definitions of the terms as set
forth in the legislation.
Throughout H.R. 5175, the term covered organizations is defined as corporations, labor organizations, tax-exempt
§ 501(c)(4), (c)(5), and (c)(6) organizations, and § 527 political organizations that are not political committees under
FECA.

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The DISCLOSE Act (H.R. 5175): Overview and Analysis

Author Contact Information

R. Sam Garrett
Erika K. Lunder
Analyst in American National Government
Legislative Attorney
rgarrett@crs.loc.gov, 7-6443
elunder@crs.loc.gov, 7-4538
L. Paige Whitaker

Legislative Attorney
lwhitaker@crs.loc.gov, 7-5477


Acknowledgments
Kate M. Manuel, Legislative Attorney, contributed to this report.


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