House Speaker backs ethics bill to bring expenses ‘from the dark into the light’

House Speaker Cameron Sexton extolled disclosure requirements in an ethics reform bill Tuesday and questioned the motives of groups opposed to the legislation, mainly 501(c)4 organizations that can shower “dark money” on campaigns in the final two months of an election.

Armed with the authority to participate in all House committee meetings, Sexton made a rare appearance in the Local Government Committee where he defended comprehensive reform legislation he is sponsoring that would require tax-exempt groups that spend money to influence elections to report aggregate expenditures of $5,000 within 60 days of a campaign.

Many of those expenditures don’t list candidates’ names but provide messages that target candidates, often smearing their character. This bill, though, states groups with the nonprofit 501(c)4 status would be deemed a political campaign committee and must report expenditures topping $5,000 for campaign material containing a state or local candidate’s name in a primary or general election in that 60-day window. 

The Local Government Committee approved the bill on a voice vote, sending it to the House Finance, Ways and Means Committee.

Sexton, a Crossville Republican, noted the effort is designed to bring expenses “from the dark into the light.”

“And there may be some groups that don’t like that. I understand that, because maybe they’re not doing all positive stuff. Maybe they just want to do negative stuff,” Sexton said.

He argued that when groups make independent expenditures within 60 days of an election, they’re “trying to influence somebody’s vote.”

“And the voters need to know, and the citizens of Tennessee need to know who those people are that are trying to influence their vote,” he said.

The legislation, which is being carried by Rep. Sam Whitson, R-Franklin, wouldn’t require 501(c)4 groups to list contributors but would force them to register the same way a political action committee would. 

Groups such as Tennessee Stands and Americans for Prosperity lashed out at Sexton and other lawmakers afterward, claiming their free speech would be violated and that lawmakers were exerting too much government control without a “transparent” process.

Gary Humble, leader of the advocacy group Tennessee Stands, slammed House Speaker Sexton and lawmakers for passing a last-minute amendment he said the public hadn’t seen. Humble has been critical of caption bills, broadly worded legislation used by lawmakers to attach amendments that create the bill.

“Why should the public not be able to see every word that’s being filed that’s being looked at by these committees?” Humble said. “The public should have the right to have input on everything that goes before committees.”

Humble, who is running against Senate Majority Leader Jack Johnson in District 23, said the legislation passed in the Local Government Committee “sets a bad precedent” because it doesn’t clearly define the types of expenditures to be reported.

He questioned whether the aggregate $5,000 on “all communications” includes a breakdown of salaries and rents for 501(c)4 groups or consulting with other groups.

“This is an affront on free speech all the way around, and the fact that we have a speaker of the House that’s willing to sit on a committee and say this has nothing to do with free speech is absurd,” he said. “It has everything to do with free speech.”

Humble declined to divulge who funds his group, saying only he receives funds from people.

Tori Venable, state director for Americans for Prosperity, didn’t criticize the legislation itself, saying it would be no problem to report campaign expenditures, but was clearly put off with the bill. Instead, she directed irritation toward the committee process and said all votes should be on the record instead of by voice vote.

“We have a PAC for political activity for express advocacy, so when we are going to engage at that level and say vote for or vote against, we have a PAC for that,” she said.

Venable called it a “minor inconvenience” to move the organization’s scorecard for legislators up so it could be distributed before the 60-day window starts. She did say, however, more disclosures are needed for government-funded lobbyists.

Whitson, however, said 501(c)4 groups shouldn’t have been surprised with the bill. He presented legislation with the same wording in April 2021.

In fact, the language no longer requires the groups to disclose contributors, making it less stringent, he said.

“For (Humble) to say this was sprung on them is a lie,” Whitson said. “For him to say it restricts what they can say or do is a lie. All it does is, if they get involved in a campaign and they want to be like a PAC, they’ve gotta report like a PAC.”

Whitson said he had not spoken with any representatives of Americans for Prosperity before the bill was presented Tuesday.

A new amendment was proposed, though, by Rep. Ryan Williams, R-Cookeville, which dropped some provisions Whitson initially had that required disclosures for campaign services. 

Those stemmed, in part, from a federal probe of House corruption that led to a guilty plea by now-former Rep. Robin Smith, who resigned in March.

Smith pleaded guilty to concocting a scheme in which Cade Cothren, the ex-chief of staff for former House Speaker Glen Casada, came up with a phony campaign vendor that did more than $200,000 worth of business with the House Republican Caucus and House Republicans, including taxpayer-funded mailers.

Smith and Casada pressured House leadership and members to do business with the vendor, New Mexico-based Phoenix Solutions, and received kickbacks, according to Smith’s federal plea documents.

The amended version of House Bill 1201 is wide ranging. Among a number of provisions, it:

• Requires meeting agendas of the Registry of Election Finance and Ethics Commission to be published five business days before meetings. It also requires large civil penalty settlements to be approved in a public meeting.
• Removes a political action committee black-out period, which was found unconstitutional.
• Requires lawmakers to itemize all expenditures reported on a long form.
• Enhances interim reporting for candidates and PACs of contributions and expenditures 10 days before an election.
• Extends civil penalties and joint liability to candidates controlling or serving as officers of PACs and prohibits use of PAC money to pay penalties.
• Requires candidates and PACs to keep campaign funds in separate accounts from personal funds.
• Adds two non-partisan members to the Registry of Election Finance from the Advisory Committee on Open Government, updates Registry appointments guidelines and adds restrictions to Registry and Ethics Commission members and spouses.
• Requires legislators to keep detailed contributions and expense documents for audits.
• Adds members of the governor’s cabinet to the list of people who can’t be paid for consulting services.
• Requires those in state government who disclose sources of income to list any companies or consultants paying them $5,000 or more. This also requires disclosure of member-controlled PACs.
• Clarifies that state trial court judges file annual statement of interest disclosures with the Ethics Commission.
• Requires annual statements of interest disclosures to be signed under penalty of perjury.
• Bans the use of pre-checked boxes on mailers that authorize future campaign contributions. This is designed to keep people from unwittingly donating to campaigns for years.