Financial Transparency Coalition

Post Citizens-United, Congress is working to craft tough finance disclosure laws to force corporations to disclose their political spending. The New York Times says,

WASHINGTON — The White House and leading Democrats in Congress are close to proposing legislation that would force private companies and groups to disclose their behind-the-scenes financial involvement in political campaigns and advertising, officials involved in the discussions said Monday.

One provision would require the chief executive of any company or group that is the main backer of a campaign advertisement to personally appear in television and radio spots to acknowledge the sponsorship, the officials said.

This is a reasonable, and constitutional, approach in order to force corporations to be somewhat accountable for the speech that they create and fund. Without disclosure, corporations could spend untold amounts of money to attack any politician who supports issues which would negatively affect their bottom line, and no one would have any idea who is doing the attacking.

What makes this worse? Shell corporations,

He predicted that without action by Congress, “we’ll see millions and millions of dollars in corporate money funneled into these campaigns through dummy corporations and front companies.”

Even robust campaign finance disclosure laws could be derailed by opaque beneficial ownership and incorporation laws. If the mechanism to check corporate malfeasance is public scrutiny, it not difficult to imagine corporations being able to successfully confuse observers using the same web of shell corporations that they use to circumvent global corporate taxes.

Transparent incorporation rules solve a lot of problems, this one included. While we rarely use the term “corruption” in the United States to describe corporate influence in policy-making, the problems caused by excessive corporate influence in elections strongly parallel the problems caused by a lack of financial transparency worldwide.