Need to Close the Door on DISCLOSE Again

The Supreme Court ruled earlier this year (in Citizens United vs. FEC) that company (and employee) voices were being unfairly silenced by the campaign finance rules that were in place. Democrats in Congress didn’t like what they heard so they attempted to make their way around the decision by coming up with the DISCLOSE Act. For those that care, the acronym (who has the job of coming up with these things) stands for Democracy is Strengthened by Casting Light on Spending in Elections.

Fortunately, the effort fell short of the 60 Senate votes needed to proceed. But bad ideas (in this case one of the worst ones to come down the pike in a long time, and that’s saying something in a city filled with questionable policy proposals) don’t simply go away. Indiana Chamber members communicated their displeasure the first time around.

CongressDaily reports the latest:

The DISCLOSE Act will head back to the floor for a vote when the Senate returns next month, according to spokespeople for Senate Majority Leader Harry Reid and Sen. Chuck Schumer, D-N.Y., the bill’s lead sponsor.

The measure would implement strict disclosure laws on campaign ads, require corporate leaders to appear in ads much like candidates and severely restrict foreign-owned companies and those that do business with the government. 

Senate Dems and their reform-advocate allies are targeting Sens. Scott Brown, R-Mass., Olympia Snowe, R-Maine and Susan Collins, R-Maine, all of whom voted against cloture last month. The 3 GOPers said the bill was rushed in an attempt to influence the ’10 midterms on Dems’ behalf.

Now, though, reform advocates believe they have removed that most significant objection all 3 GOPers had. If the measure is passed in late Sept. or early Oct., it would not go into effect until after the midterms.

Senate leaders have told their House counterparts that they will bring the bill up again, and that they may let GOPers block it one more time in order to score political points. But after the bill fails, reform groups and senators who back the DISCLOSE Act will try to convince potential GOP allies to join them in passing the bill so it might be implemented after the midterms.

Still, Snowe, Collins and Brown will face pressure from their leader even after it becomes clear the bill wouldn’t impact the midterms. Senate Minority Leader McConnell has been a vocal opponent of the DISCLOSE Act, labeling it a ploy to benefit Dems. McConnell has been successful in keeping his conference together on most controversial votes, making the bill’s prospects uncertain.

Dems also have to deal with Sens. Dianne Feinstein , D-Calif., and Frank Lautenberg , D-N.J., both of whom are opposed to a carve-out that exempts the NRA from certain disclosure provisions. Holman said there is an understanding that the 2 Dems would vote for cloture, getting Dems over the 60 votes required to move the bill to final passage, but then Lautenberg and Feinstein could vote against the final package. Lautenberg and Feinstein both voted for cloture when the bill first came up on July 27.

Financial Reform Breakdown: Part 2

We offered earlier today a look at some of the key provisions in the still-being-debated financial reform bill in Congress. Here’s a brief overview of some of the other components (full 1,300-plus-page bill here).

  • Bank Capital Standards – Under an amendment adopted unanimously with little fanfare, banks with more than $250 billion in assets are forced to meet higher risk- and size-based capital standards. The Treasury and Fed oppose the measure authored by Sen. Susan Collins (R-Maine), warning it could make it harder for U.S. officials to negotiate global capital standards with foreign regulators.
  • Mortgage Risk – Require firms that securitize mortgages and other loans to hold a portion of the risk on their own balance sheets, but under an amendment added on the floor also would direct regulators to establish a category of less-risky mortgage products – primarily fixed-rate, fully amortizing loans – that would be exempt from the risk-retention rule.
  • Hedge Funds – Requires hedge funds that manage more than $100 million to register with the U.S. Securities and Exchange Commission (SEC) as investment advisors and disclose to the agency information about their trades and portfolios.
  • Corporate Governance – Gives shareholders of public corporations a non-binding vote on executive pay and the SEC the authority to grant shareholders proxy access to nominate directors.
  • Insurance – Creates a new Office of National Insurance within the Treasury to monitor the industry, recommending to the systemic risk council insurers what should be treated as systemically important, as well as coordinate international insurance issues. The office would produce a study and recommendations to Congress on ways to modernize insurance regulation, but it is explicitly not a new regulator.
  • Credit Rating Agencies – Establishes a new self-regulatory organization for credit rating agencies designed to eliminate a conflict in the current system in which an institution pays for its rating and, at times, shops for the best rating it can get for the lowest price. The SEC will appoint members of the new regulatory body that will then assign credit-rating agencies to provide initial credit ratings of financial packages.
  • Investment Advice – Several Democrats had hoped to tighten regulations for broker-dealers who give investment advice, but they weren’t given a floor vote on their amendment despite near constant lobbying from consumer groups. As it stands, this provision makes recommendations and directs the SEC to study the differences between fiduciary standards for investment advisers and broker-dealers.