FCC Brings Sunlight to Elections, But the SEC Needs to Help, Too

2010 was a dark, even apocryphal election during which much of the political spending was from groups who did not reveal themselves. In the 2012 election, we might just have a bit more transparency.

In Citizens United , the Supreme Court ruled that corporations could spend unlimited sums on elections. The case also ruled that transparency rules still apply to political ads. Justice Kennedy wrote, "A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before to-day." This phrase from the court basically cries out for the political branches to act to bring better disclosure to elections.

At long last, at least one federal agency has awakened from its deep slumber to bring the public improved transparency on political spending. It wasn't the moribund Federal Election Commission (FEC). On April 27, 2012 , the Federal Communications Commission (FCC) voted to place broadcasters' political files online. This is a big step in the right direction.

Broadcasters are required to keep records of how much they charge political candidates. This is known as "the political file." There's a good reason for this. It is to ensure that broadcasters are not charging Democratic candidates more than Republicans or vice versa. Furthermore, under the BCRA statue, broadcasters are required to charge campaigns the lowest unit rates for ads. Having a political file that is open to public inspection helps ensure that the broadcasters are living up to their public interest duties.

The problem was that each public file was kept in each individual TV station. Thus, aggregating data across TV stations on political spending on television ads was nearly impossible, or at least cost-prohibitive.

The new FCC rule will move TV broadcasters' political files from physical file cabinets to the Web. This brings vital election data into the 21st century, allowing the public to see political spending on TV ads across the nation in nearly real time.

There are limits to the rule. It applies to the top four TV networks and in the top 50 media markets. The rule phases in over time. And its biggest limitation is that it only applies to TV broadcasters, not other media such as cable, radio, or the Web.

To fill in the gaps that remain, other federal agencies need to step up to improve disclosure about who is spending in American elections. There is a petition pending before the Securities and Exchange Commission (SEC) by 10 prominent law professors asking for a new disclosure rule for publicly traded companies that spend money on elections. This petition has received over 85,000 comments in support , including comments from quotidian small investors, members of Congress, state comptrollers, state treasurers, and money managers with hundreds of billions of dollars of skin in the game. SEC Commissioner Aguilar has voiced strong support for the transparency petition, as well, but his agency has yet to take up a rule making. The lack of a new SEC rule leaves investors and voters in the dark. Provided that the new FCC rule doesn't get hamstrung by litigation, compliance for broadcasters kicks in six months or late October 2012. This could bring improved transparency surrounding election-eve spending to the public, which will be experiencing its first Citizens United Presidential election. But the FCC can't solve this problem alone. The SEC also has a vital role to play in providing transparency to the public in the post-Citizens United America.

Ciara Torres-Spelliscy is an Assistant Professor of Law at Stetson University College of Law. She is the author of a forthcoming law review article called "How Much Does an Ambassadorship Cost? " and co-author, with Dr. Kathy Fogel, of "Shareholder-Authorized Corporate Political Spending in the United Kingdom ," in the spring 2012 issue of the University of San Francisco Law Review.