House votes to close loophole allowing secret donors
Despite some concern that it may be unconstitutional, the House voted Monday to try to close a loophole that now allows some people to make political donations secretly by funneling money through corporations.
The House voted 61-10 to pass HB43 and sent it to the Senate.
Its sponsor, House Majority Whip Greg Hughes, R-Draper, said current law allows people to set up dummy corporations with little purpose other than to launder money into the political process secretly. Rep. Mike Noel, R-Kanab, said he has been targeted by such groups, "and I can never figure out who is behind them."
That's because current Utah law allows nonprofit and regular corporations to donate without limit to state campaigns, parties, PACs and other groups or spend money on their own to influence campaigns Â but requires listing only how much they spent, without listing any of their donors.
Hughes said his bill would require corporations to list people who donate to them for political purposes, just as candidates, political action committees and parties must also list their donors.
However, Allen Dickerson, with the conservative Washington, D.C.-based Center for Competitive Politics, said in an earlier committee hearing that the bill essentially "takes a corporation and transitions it into a PAC ... that's not constitutional," and would likely challenge it in court.
The group was a proponent of the Supreme Court's Citizens United decision that allowed a flood of corporate money into elections. Rep. Rebecca Chavez-Houck, D-Salt Lake City, urged members not to support it because it could lead to expensive court challenges, and might stifle political speech.
Hughes responded, "This adds more transparency to a process that needs it."