Fearful that the Republican Party stands to gain from a U.S. Supreme Court ruling allowing corporations to use general-treasury money on campaign ads, congressional Democrats have introduced a bill they say will reveal how corporations, associations and unions spend money to influence federal elections.

The DISCLOSE Act, or Democracy is Strengthened by Casting Light on Spending in Elections Act, is designed to reveal when corporations and unions spend money to influence federal elections, even if the money is funneled through third parties, such as trade associations or nonprofit groups.

It emphasizes disclosure of corporate and union campaign spending and restricts such spending by certain types of companies. The restrictions would apply to companies controlled by a foreign entity or those receiving government contracts or funding.

Other provisions would clamp down on campaign spending that is coordinated with a candidate or party, and the Senate version would require lower charges for broadcast ads purchased by a candidate who is attacked in independently sponsored political ads.

Introducing the bill were Sen. Charles E. Schumer, D-N.Y., and Rep. Chris Van Hollen, D-Md. Van Hollen said the House Administration Committee would begin hearings on the House version of the measure next week - on May 6.

Democrats aim to get the bill into law before November's elections, but they acknowledged they will face tough opposition from congressional Republican leaders and some traditional Democratic allies, including possibly some unions and liberal advocacy groups.

President Obama praised the legislation, but several leading Republicans blasted it.

"Make no mistake about it, the campaign finance bill introduced this morning is not about reform, transparency, accountability or good government," said  Senate Minority Leader Mitch McConnell, R-Ky. "It is about election advantage plain and simple."

The case involved the group Citizens United, which produced a 90-minute documentary critical of then-Sen. Hillary Rodham Clinton titled "Hillary: The Movie." After the group was barred from airing the film on pay-per-view television during the 2008 presidential primary, it brought suit challenging key components of the Bipartisan Campaign Reform Act of 2002, otherwise known as McCain-Feingold.

In a 5-4 decision, the high court ruled that: corporations may use money from their general treasuries to pay for campaign ads. The high court also struck down parts of the Bipartisan Campaign Reform Act, which prohibited unions and corporations from running issue ads in the closing days before primary and general elections.

The court's decision also:  

• Leaves in place a prohibition on direct contributions to candidates from corporations and unions.
• Removes limits on independent expenditures that are not coordinated with candidates' campaigns.

Legal experts say the 2010 elections will bring the first large-scale application of the high court's decision and other court rulings that have essentially stripped away advocacy restrictions.

4-30-10 Memo from Skadden Arps outlining the DISCLOSE Act (members-only)