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Alan Grayson: PAC-Buster

January 29, 2010 - by Donny Shaw

After the Supreme Court ruled last week that corporations and unions should be allowed to spend unlimited amounts of money on political ads, Rep. Alan Grayson [D, FL-8] submitted the “Save our Democracy” platform to Congress, a package of bills designed to “stave off the threat of ‘corpocracy’ arising from” the decision. You can find links to more info on the bills at the bottom of this post.

One of Grayson’s bills in particular is gaining momentum. The “Ending Corporate Collusion Act” would make federal antitrust laws applicable to corporate political action committees, or “PACs.” It has been referred to the House Judiciary Committee, and it now has as it’s first co-sponsor the chairman of that committee, Rep. John Conyers [D, MI-14]. Having the Chairman of the referred committee on board as a co-sponsor is about the surest way for a member to get their bill moving in the legislative process. Expect hearings to be held.

Let’s think about how this would (or wouldn’t) work. The federal antitrust laws — the Clayton and Sherman Acts — are actually quite limited in their reach. The Sherman Act, for example, makes “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations,” illegal. If this bill were enacted, would this language then apply to, for example, the pharmaceutical PACs whose recent political donations could be interpreted to have influenced the Senate’s decision not to allow Americans to buy cheaper, foreign drugs?

One interpretation of the Sherman Act says that it apples to “every contract, combination in the form of trust or otherwise, or conspiracy” that either reduces output or raises prices. Banning drug imports certainly leads to an increase in the prices of the drugs that are available. But would the means by which PACs were involved fit into the law? Perhaps under the “conspiracy” language — after all, the Senate’s rejection of the drug importation amendment was part of a “secret deal” with the pharmaceutical companies, and there is potential evidence that PAC money may have mattered.

It’s easy to think of other instances where it’s possible that PAC giving lead to legislation producing anticompetitive effects that could be considered illegal under the antitrust laws. Another that comes to mind is Congress’s recent tobacco bill (H.R. 1256) that, among other things, put severe restrictions on cigarette advertising. Many believe that the provision was accepted by Altria Group, which owns the Marlboro brand, because it would effectively lock them in as the leading brand since new, smaller brands would have very few opportunities for advertising. It was widely reported that the lobbying support of Altria Group (formerly Phillip Morris) was critical for getting the bill through Congress. A quick look at OpenSecrets shows that Altria leads the industry in PAC giving by far.

Anyways, it’s an interesting idea, and one I think we’ll be hearing more about in the future. Any antitrust lawyers or experts care to weight in? I am by no means an expert on this area of the law, so it would be great to hear from anyone out there that knows these laws well. Is Grayson’s ideas to put PACs under antitrust laws realistic? Would it change anything?

Here’s the full rundown of Grayson’s “Save Our Democracy” package:

1) H.R. 4431 - Business Should Mind Its Own Business Act: To amend the Internal Revenue Code of 1986 to impose a 500 percent excise tax on corporate contributions to political committees and on corporate expenditures on political advocacy campaigns.

2) H.R. 4432 – Corporate Propaganda Sunshine Act: To direct the Securities and Exchange Commission to revise its reporting requirements to require public companies to report certain expenditures made to influence public opinion on any matter other than the promotion of the company’s products or services.

3) H.R. 4433 –  Ending Corporate Collusion Act: To make the antitrust laws applicable to a political committee under the Federal Election Campaign Act of 1971 which is established and administered by a separate segregated fund of a corporation pursuant to section 316(b)(2)( C) of such Act.

4) H.R. 4434 - End Political Kickbacks Act: To amend the Federal Election Campaign Act of 1971 to extend the ban on the making of contributions by certain government contractors to other for-profit recipients of Federal funds, to limit the amount of contributions the employees of for-profit recipients of Federal funds may make during any calendar year in which such funds are provided, and for other purposes.

5) H.R. 4435 – Public Company Responsibility Act: To amend the Securities Exchange Act of 1934 to prohibit any national securities exchange from effecting any transaction in a security issued by a corporation unless the corporation’s registration with the exchange includes a certification that the corporation currently is in compliance with the provisions of the Federal Election Campaign Act of 1971 governing contributions and expenditures by corporations which were in effect with respect to elections held during 2008.

6) H.R. 4510 – America is for American’s Act: To amend the Federal Election Campaign Act of 1971 to apply the ban on contributions and expenditures by foreign nationals to domestic corporations in which foreign principals have an ownership interest.

7) H.R. 4511 – Pick Your Poison Act: To amend the Federal Election Campaign Act of 1971 to prohibit corporations which employ or retain registered lobbyists from making expenditures or disbursements for electioneering communications under such Act, and for other purposes.

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  • Clif9 01/30/2010 6:32am

    Here’s a simple plan – in any advertising for a candidate, there must be three prominent bars present in the upper left or right corner, whether on a billboard or in a video.

    The bars would be red, orange and yellow and would show the top three corporate contributors for that candidate, the names of the corporations clearly printed on the bars.

    This simple information would let the public decide what to make of that corporate support.

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