citizens united he was very clear about the importance of disclosure he stated with the advent of the internet prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hol corporations and elected officials accountable for their positions and supporters justice kennedy further stated the first amendment protects political speech and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way transparency and the electorate to make informed decisions and give proper weight to different speakers and messages finally just stated the public has an interest in knowing who is speaking about a candidate just before an election justice kennedy in his citizens united opinion bound together the two elements of his opinion independent corporate speech in elections is a first amendment right and the funding sources must be fully disclosed in order to make this constitutional right to function in our political system this section of justice kennedy's opinion was the only one joined by the four citizens united dissenters meaning that the fundamental importance of disclosure was recognized by eight of the nine justices this background is important to your consideration of the disclose act not only because it makes it clear that the disclosure provisions of the bill are constitutional but because they complete the process begun by the supreme  citizens united decision by requiring the sort of disclosure that justice kennedy and the other justices found essential to our democratic system i am fully aware that there are many who term this debate a partisan one between republicans and democrats and as a republican i regret that is all i know the disclose act has only two distinguished republican members of the house as co sponsors and i hope there will be more republican support because this should not be a partisan issue many republicans have long argued for the exact conclusion the justice kennedy arrived at less restriction on political speech in return for full disclosure this is not to say that the disclose act is a perfect act of legislative draftsmanship few pieces of legislation are especially before they have seen the light of public comment and the committee process thus i hope the members of the committee from both sides will work together to improve the bill in particular i have concerns that the provisions on foreign national involvement in the us political process can and should be clarified and improved let me begin by saying that i think there is a bipartisan unanimity that we do not want foreign governments foreign government officials or foreign government controlled entities from venezuela china or elsewhere spending money in u s elections either directly or through the u s companies they control is a serious threat the bill must address however the bill goes further in a manner that i think makes it vulnerable to potential constitutional challenge of being both over inclusive and for instance to declare some u s companies to be foreign nationals if they have a single non us individual or company  twenty percent of even if that individual has no control over the corporation's affairs more broadly the current draft raises the question of why some u s companies like say and heizer bush or chrysler are treated differently in terms of their ability to have u s or participate in local political activity than other u s companies with whom they directly compete like adams and ford i believe the better answer is to clearly prohibit the involvement in u s selections of companies with foreign government ownership either directly or through foreign government control corporations definition can be written to prevent the dangers we all seek to guard against surely commercial entities the analogy would be to the foreign agents registration act which makes exactly this sort of distinction the disclose act provisions requiring personal certification by the  under threat of perjury could police foreign government involvement i'm sure there are other areas of the proposed legislation which would also benefit from bipartisan discussion and amendments and i hope that will occur however the bill fulfills an important need by requiring disclosure of who is spending money in u s elections as i've noted and one majority of the us supreme court has stated that not only constitutional but is the expected and necessary counterbalance to the new corporate and union rights to expand unlimited funds in us elections i urge congress to require such complete disclosure in time for the two i'm a corporate scholar and former corporate lawyer i was a partner at work before going to harvard i'm not a constitutional law scholar and i'm not going to address constitutional issues either about companies are active today needed to have special provisions in place they were created after the task they were created after certainly the owners of those companies never imagined that this change would be coming down to pursue their own personal political agendas corporate bank accounts in the election process and they're going to be able to do this in secret without any disclosure  response to this risk by requiring disclosure of the bill would follow a long tradition of the federal government mandating disclosure by public companies which supplements private  no difference between the two when analyzing a corporation's right to political speech courts are no longer permitted to take into consideration elements that make corporations inherently different from an individual citizen this includes limited liability perpetual life and preferential treatment in other words the court can no longer pull aside the corporate curtain and look at what is really going on behind the scenes that causes a corporation to be different from a real person but unlike corporations foreign governments are motivated by more than just corporate profit global influence power and advantage are also a major part of their calculation even if involvement in u s elections might harm profits of the state controlled foreign corporation if that involvement is ultimately beneficial to a foreign government for other reasons it will seek to take advantage of a loophole and in today's world where china has two point four trillion dollars in foreign currency and the united arab emirates sovereign wealth fund houses four hundred fifty billion dollars and after these foreign governments now have the money to do so and that is why section one or two of those is necessary has considered the disclose act to date the legislation that purports to respond to the citizens united ruling but contains a large number of provisions that have nothing to do with the ruling and are in no way necessitated by the supreme court decision  legislation crafted behind closed doors with as far as i can determine little or no consultation with the republican congressional leadership near the house of representatives or the senate in addition the disclose act seeks to make major changes to the federal election campaign act only months before widespread among regulated entities about what their legal obligations are under the law all of which could take place as soon as this fall in the final weeks before the mid term election needless to say the presence of any of these phenomena would seriously but i would like to highlight biggest problems in the proposed legislation first the disclose act would severely restrict the political activities of a large number of american corporations including many long anding companies run by american citizens foreign nationals are associated with the companies and certain way the practical effect of these provisions would be would be to prohibit many american companies from making any contributions or expenditures in connection with u s elections or making any independent expenditures or electioneering communications or even from operating a political action committee which after all is funded by contributions from american citizens is fully disclosed to the federal election commission and allows the company's employees to be involved in american politics the biggest targets of the legislation are american subsidiaries of foreign parent corporation including companies that employ tens of thousands of americans and have operations across this country targeted legislation potential including anheuser busch food lion michelin north america the miller brewing company nestle u corp and the john hancock life insurance company just to name a few of the legislative targets i understand that advocating for additional for national restrictions in american elections makes for good politics particularly election year but potentially sweep up hundreds of s companies that are run by americans restrict them from being involved in american elections in my view is very misguided it's also unnecessary given that the citizens united ruling did not affect existing regulations on foreign national contributions and expenditures which after all were strengthened just eight years ago in the bipartisan campaign reform act of two thousand and seven and given that no one has argued that there's been an inappropriate for national involvement in american elections in recent years second a number of  disclose act which makes the legislation unduly begun a wide variety of areas i'll just touch on one key area and that deals with political party coordinated expenditures the disclose act provides that payments by political parties or communications made on behalf of their candidates permitting unlimited coordinated party expenditures would allow the political parties to more efficiently target their hard dollars in the most important races across the country and also would be fully consistent with the bipartisan campaign reform act emphasis on on hard court were saying is that it is important for people to know who is speaking and where the funding is coming from and that would be true whether we're talking about a corporation or a trade association or a union or  with the definition of marriage during the course of a court case that took place there after it still is not resolved there was a demand made by the court that contributors to the proposition be revealed subsequent to that some of my constituents and some just outside my  constituency receive retaliatory action because they had contributed as little as a thousand dollars on behalf of the proposition one individual being fired from his job or forced to resign from his job even though it had nothing to do with the job of another business being the subject of boycotts and threat and i just say that as a factual matter i know these facts to be true how do we say that that is the debate in a big or a society a vigorous political society and therefore even though disclosure allow for those things to occur political public discourse shouldn't be shrinking violets but that's a flip answer because the second part is that the court said going all the way back to the social worker parties that if you can show that there is going to be actual harm from disclosure that you are going to be injured in a direct way then you can be exempt from disclosure and in fact i believe it's still the case that the socialist workers party has an because of the disclosure statute they can apply for and but that doesn't in my view mean that you shouldn't have the disclosure requirements for everybody else let me ask this week that said it would favor unions it seemed to me that the disclosure provisions were even handed they require they would apply to both corporations and unions and i can certainly remember past campaigns where unions paid for advertising that ran under catchy name didn't say anything about unions americans for a better country or something so i think the fact that it would have to disclose the names of the unions that are sponsoring it and that it was restricted under under this bill i believe that's the case unless they paid them back but their unions are not restricted so i'm trying to find a figure out how that i suppose if they received tarp funds but i don't think any of them  think they're going to be provisions of the bill the other discussion has been federal contractors where they're going to be more corporations affected than there are unions because they're going to be more corporations that are federal contractors than they are  but i don't know that that makes the bill discriminatory against corporations we have to start with the fact that citizens united is a case about corporate spending there was no union in that case i think lawyers assume that unions have the really the only entity that america left were for property corporations and so in that respect i think citizens united was a reordering of the decision and beyond that of course as you know a large number of jurisdictions in this country for decades allowed corporate contributions and expenditures before citizens united and i think it's fair to say that some of the best governed states in the nation operate in those types of regimes such as for example virginia and we've not seen the parade of horribles there that we're hearing a little  free speech when at least half of the message has got to be a repetition of who it was that sponsored it and the name of the group or does that no