BOB GARFIELD: This is On the Media. I'm Bob Garfield.

BROOKE GLADSTONE: And I'm Brooke Gladstone. Until this year, it seemed as if we were inching toward campaign finance transparency. From the creation of the Federal Election Commission in 1975 through the McCain-Feingold Act in 2002, reformers slowly but surely scored victory after victory. Then, just before the 2008 primary elections, a conservative nonprofit group called Citizens United produced a 90-minute film called Hillary The Movie, and sought to promote it on television and air it on Video on Demand.

[CLIP]:

FEMALE NARRATOR: First, a kind word about Hillary Clinton.

ANNE COULTER: Looks good in a pantsuit.

FEMALE NARRATOR: Now, a movie about everything else.

FEMALE ANNOUNCER: Hillary the Movie, on DVD.

[END CLIP]

BROOKE GLADSTONE: Citizens United lost when a lower court agreed with the Federal Election Commission that Hillary the Movie violated the McCain-Feingold ban on corporate money being used for electioneering. Then in January, the Supreme Court essentially gutted McCain-Feingold. Speaking for the majority, Justice Anthony Kennedy wrote, quote: “If the First Amendment has any force, it prohibits Congress from fining or jailing citizens or associations of citizens from simply engaging in political speech.” Among the dissenters was Justice John Paul Stevens, who called the decision, quote: “a rejection of the common sense of the American people.” He added: “While American democracy is imperfect, few outside the majority of this court would have thought its flaws included a dearth of corporate money in politics.”

BOB GARFIELD: Congress tried to pass something called the Disclose Act to replace a few restrictions and, at the very least, ensure that the identities of those paying for the coming flood of political ads would be known. Maryland Democrat Chris Van Hollen helped co-write the bill.

CHRIS VAN HOLLEN: We believe voters have a right to know who is paying for the ads that they're watching, and this bill would require lots of disclosure. It also prohibits foreign controlled corporations from spending any money to influence American political elections and prohibits large recipients of federal dollars, like major federal contractors or big banks that receive taxpayer monies under TARP, like AIG, from taking that money and recycling it back into political advertising.

BOB GARFIELD: But last month in the Senate, the Disclose Act failed. Ken Vogel, writer for Politico.com, says that prior to Citizens United, most donations went through organizations called 527s, which required disclosure of donor names. Citizens United changed everything.

KEN VOGEL: At that point, these 501c4 groups, which are technically social welfare organizations whose primary purpose is not politics, they become the vehicle of choice, and they don't have to disclose where they got their contributions. So this allowed donors to give huge sums of money to these groups without any risk of having their name associated with these ads, without any risk of being targeted or retaliated against for their contributions. That clearly worries advocates of campaign finance reform because they say it takes us in a direction where we have no idea where the money in our politics is coming from.

BOB GARFIELD: Now, strictly speaking, these 501c4s that allow people to contribute anonymously, under the tax code they're not supposed to apply more than 50 percent of their revenues towards political donations. How do they get around that?

KEN VOGEL: Some of these ads which seem to be expressly political to the lay viewer the defenders would say are, in fact, issue-based ads.

BOB GARFIELD: Well, let's listen to one of those advocacy ads that is [LAUGHS] not explicitly electioneering.

[CLIP/MUSIC UP AND UNDER]

MALE NARRATOR: For centuries, Muslims built mosques where they won military victories. Now they want to build a mosque at Ground Zero, where Islamic terrorists killed 3,000 Americans. It’s like the Japanese building at Pearl Harbor. The Muslim cleric building the mosque believes America was partly responsible for 9/11 and is raising millions overseas from secret donors. But, incredibly, Bruce Braley supports building a mosque at Ground Zero. Tell Braley what you think.

[END CLIP]

BOB GARFIELD: Yeah, that sounded like an ordinary attack ad to me. Tell me why that’s an issue advocacy ad.

KEN VOGEL: Well, their defenders would say that this ad is educating viewers or listeners about a particular issue. Clearly to the lay viewer or listener, that’s going to sound like attacking an individual, but there is a legal argument to be made that this is, in fact, not an attack election ad.

BOB GARFIELD: I want to ask you about Karl Rove because when he formed a PAC called American Crossroads there was a lot of snickering in the liberal media about how little he was able to raise in donations over the course of the first three months. You know, it was in the [LAUGHING] hundreds of dollars.

KEN VOGEL: Many of the big donors who they were approaching did not want their names splashed across the headlines as funding this group that was associated with Karl Rove and was airing ads attacking Democrats. So they set up a 501c4 group and went back to these same donors and said, now you have the option of giving to us without your donations and your identities ever being known. And at that point, the fundraising took off.

BOB GARFIELD: Now, for the moment it seems as if Republican candidates and issues have been the beneficiary of these dramatic changes in federal campaign finance laws, but the Citizens United case also liberated labor unions, traditionally big Democratic supporters, to do essentially the same thing. Has the money been flowing from big labor as well?

KEN VOGEL: Labor unions basically have a pool of money that they allocate for election-related expenses that comes from their members paying dues, primarily. And that is really capped at a certain amount based upon how many members they have and how much they charge these members for dues, so it’s not like they have a tremendous new stream of revenue to be able to support a new type of election strategy.

BOB GARFIELD: Now, if there’s an imbalance in the amount of money flowing towards the Republicans versus the Democrats, some of it is the Democrats’ own fault. The President of the United States made that bed and now his party has to lie in it. Tell me exactly how.

KEN VOGEL: Well, during the 2008 Presidential Election, then-candidate Obama urged big Democratic donors not to give to these types of outside groups. And, of course, he didn't need it. He raised 750 million dollars from individual donations, many of them small individual donations. Now, however, Democrats could really use that money, but many Democratic donors are still sitting on the sidelines because they feel like it would look hypocritical for them, given that the President and top officials in the Democratic Party have singled out these types of donations as being a problem for our democracy.

BOB GARFIELD: Now, within about five minutes of the Supreme Court’s Citizens United decision, there was talk of legislation in Congress that would at least force disclosure of the source of funds. Such a bill was floated in Congress. What happened to it?

KEN VOGEL: Well, that bill actually passed the House and failed in the Senate twice, and this is a Senate that was controlled by Democrats, albeit not with a filibuster-proof majority. So the prospects of this bill passing again if Republicans retake one or both chambers of Congress are pretty bleak.

BOB GARFIELD: Okay, Ken. Once again, thanks so much.

KEN VOGEL: It was my pleasure, Bob.

BOB GARFIELD: Ken Vogel writes about money and politics for Politico.