Legislators took a first step Tuesday to close a loophole that allows some to secretly make political donations by funneling money through corporations.
The House Government Operations Committee voted 6-1 to endorse HB43 to require corporations to list people who donate to them for political purposes, much like candidates, political action committees and parties must list their donors.
Currently, Utah law allows corporations to donate without limit to state campaigns, parties, PACs and other groups or spend money on their own to influence campaigns — but requires listing only how much they spent, without listing any of their donors.
“People can set up, frankly, a dummy corporation … that has no purpose other than laundering money through it,” said former Rep. Brad Daw, R-Orem, who helped draft the bill.
Rep. Mike Noel, R-Kanab, said he was targeted by such a corporation, “And I could never figure out where they got their money from.”
The bill’s sponsor, Rep. Greg Hughes, R-Draper, said it makes sense to have corporations — including non-profits — follow the same disclosure rules that candidates, parties and PACs must follow. “We have one set of rules for certain groups, and we study them and we require disclosure, and for others, we have nothing. This bill goes far to creating a consistency.”
However, Allen Dickerson, with the conservative Washington, D.C.-based Center for Competitive Politics, said his group believes the bill is unconstitutional, and would likely challenge it.
He said it essentially “takes a corporation and transitions it into a PAC ... that’s not constitutional.”
The group was a proponent of the Supreme Court’s Citizens United decision that allowed a flood of corporate money into elections.
The bill now goes to the full House.