When Transparency isn’t Transparent

In the Princess Bride, after one character repeatedly uses the same word, another character says, “You keep using that word. I do not think it means what you think it means.”

Every time a legislator brings up the word transparency I find myself thinking of that quote.

HB43 has been touted as a transparency bill yet I am not sure the sponsor, Rep. Greg Hughes, understands the meaning of the word.

It sounds good, and it certainly sells well to the masses, but is transparency really the intent of the bill or just the pretty wrapping?

In a nutshell, HB43 would require a corporation that conducts any sort of political activity in excess of $750/year to disclose the donors that paid for that activity.

On the surface it sounds like a great idea, right? But the bill is not what it seems. First of all, this is a retaliation bill. During the last election cycle, former Rep. Brad Daw’s primary challenger and supporters of that challenger reportedly conducted push polling and negative advertising (all legal, by the way). Rep. Daw lost the race but held on to the grudge. He was unable to determine who had paid for the ads and polls because the organization was not required to identify its donors.

The problem with these types of bills is that it is seeking to find a solution to a very specific situation but the unintended consequences could be huge. Also, with the Citizens United decision and other broad campaign finance laws, this is like putting a bandaid on a gunshot wound (just sticking with the gun theme this session).

Let’s say you are a member of a nonprofit organization. You pay a $50/year membership to the organization and once or twice a year, after receiving a fundraising letter, you donate another $50-100. During that same year, the organization decides to engage in some sort of political activity that they feel is relevant to their mission, maybe there is a bond measure that would negatively impact the organization and they want to speak against it, send some flyers, etc. It is possible, under HB43, that they could be forced to release their list of members, YOUR NAME, because you donated to this organization, regardless of your involvement, support, or even knowledge of their “political” activities.

Granted, that is NOT who this bill is going after, but it is the unintended victim. 501(c)3 and (c)4 organizations are not structured in the same way a PAC is structured. They do not typically fundraise for a specific issue, rather they have memberships, routine fundraising asks or projects, and they do not have the infrastructure or the means to fundraise only on an issue basis or even to identify who, exactly, paid for specific political activities. The burden could be significant and, worse, the ability to fundraise could be seriously curtailed if members were less-than-thrilled about the possibility of having their names disclosed.

But even worse than the issues these unintended targets would face is the farce that this is, in any real way, a transparency bill for the very simple reason that there is a gaping loophole big enough to drive an armored truck full of campaign contributions through.

Any organization that plans to engage in political activities will simply create a PAC (Political Action Committee) or PIC (Political Issue Committee) to launder donate their money to, thereby shielding its members/donors. It isn’t even a complicated process and many organizations that actively participate, already have these in place. This loophole leaves (c)3s or groups that only occasionally participate and in limited ways as the only organizations to have to deal with the ramifications of this bill. In other words, the least capable of dealing with the hurdles involved and also those most likely to have all their money donated through standard membership-type contributions.

The bill seems likely to pass. It is pretty hard to argue against “transparency” even when it is opaque.

So, instead of fighting it, we’re just going to request they change the name of the bill to more accurately reflect its true nature–HB0043 The Shell Corporation Creation Act.

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