Did Democrats exempt unions from DISCLOSE Act?

A Democratic amendment tucked into campaign finance legislation Wednesday night appears to exempt big labor unions from proposed disclosure requirements.

The change, inserted by Rep. Bob Brady (D-Pa.), chairman of the committee charged with handling the bill and a key union ally, would also affect other groups funded by members who pay dues of less than $50,000. While the move may satiate liberal Democrats who had become uneasy with an exemption for the National Rifle Association, a union loophole will certainly cause big business to cry foul.

The bill could come up for a vote Thursday on the House floor.

The underlying bill is intended to blunt the impact of a January Supreme Court ruling overturning laws that had barred corporations and unions from airing certain types of election ads.

Democrats feared the ruling would pave the way for vast corporate-funded ad campaigns attacking them in the critical 2010 midterm elections, and Republicans have blasted the DISCLOSE Act as a Democratic effort to silence opponents.

Though House Democratic leaders have prioritized this legislation, sponsored by their campaign chairman Rep. Chris Van Hollen (D-Md.), they found themselves facing a tricky calculation in rustling up the votes for it.

They believed the bill would not pass withou support from more conservative Democrats fearful of being targeted by the NRA so they exempted the group. But then some liberal Democrats balked at supporting a bill seen as giving special treatment to the NRA, even after the loophole was expanded to include the left-leaning Sierra Club and the ecumenical Humane Society and AARP – all of which say they did not seek the loophole treatment.

While unions including AFSCME have privately grumbled to Van Hollen about the bill, none are publicly opposing it.

And spokespeople for the AFL-CIO, SEIU and Change to Win did not immediately respond to questions about whether they requested the change Brady inserted Wednesday.

Brady’s staff also did not immediately respond to an email asking about the change, which was included in a manager’s amendment filed Wednesday afternoon.

The U.S. Chamber of Commerce, which has emerged as the leading opponent of the campaign finance bill, blasted the change as “corrupt politics at its worst.”

The Chamber’s top lobbyist Bruce Josten, called the change as “a carve-out designed to even further butter the breads of labor unions and squelch free speech.”

Josten, who accused the NRA of selling out for dropping its opposition to the bill after it was exempted, said in a statement “Special deals, backroom bargains, and political rewards have been the hallmark of this misguided mission to protect unpopular incumbents in Congress from losing their jobs.”

Doug Thornell, a Van Hollen spokesman, brushed off Josten’s analysis as “a desperate last minute attempt by powerful special interests to kill reform.”

“It is absolutely false and misleading to claim that this is a special provision for labor unions,” he said, stressing that the change applies to a range of groups that collect dues or fees from members’ fees. “This provision relates to transfers of funds among affiliated organizations,” he said.

Some Democratic aides privately agreed with the Chamber's analysis of the provision, saying that the business organization was correct in its interpretation of the language.

But Thornell said the bill “was never designed disrupt the normal internal transactions among chapters of the same organization. It is designed to disclose the source of funds spent on political expenditures to influence American elections.”

The provision in question originally exempted from disclosure requirements transfers of less than $50,000 from one affiliated group to another to pay for certain election ads. The language inserted by Brady Wednesday tweaked the threshold in such a way that the disclosure requirement would not be triggered by most transfers from unions to their affiliates, no matter how large

It exempted transfers comprised of “funds attributable to dues, fees, or assessments which are paid by individuals on a regular, periodic basis in accordance with a per-individual calculation which is made on a regular basis” unless an individual member’s dues exceeded $50,000. Union dues are far less than that, though dues paid to large business groups, which typically back Republicans, can exceed that figure.

But a Democratic aide asserted the provision applies to all non profits because they have dues paying members and that, therefore “the unions get no better treatment than the Chamber of Commerce.”

The bill’s writers relied upon tax law to help “define what constitutes an ‘internal transfer” and an “affiliate,” the aide said, asserting that the bill, even with the Brady change, would require disclosure of transfers from unions to Change to Win, a big union-funded political group.

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