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Appeals court allows secrecy of some political donors

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By Bill Mears, CNN Supreme Court Producer

WASHINGTON (CNN) – A federal appeals court on Tuesday put the brakes on efforts to make public the names of donors funding election “issue ads” from corporations and non-profit groups.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia let stand a federal rule allowing those groups to keep their financiers anonymous.

The Federal Election Commission five years ago permitted donor secrecy for independent, pre-election “communications” — ads that mention a candidate by name without expressly urging a vote for or against that person.

Those ads have multiplied significantly in recent years, after the U.S. Supreme Court gave corporations, labor unions, and advocacy groups unlimited “free speech” power to spend more aggressively for issue ads.

This election cycle has been dominated by commercials from groups like Priorities USA — supporting President Barack Obama — and Crossroads GPS — backing Republicans and led by former George W. Bush political strategist Karl Rove.

A federal judge in March ruled the FEC was wrong to keep the donor secrecy rules in place, concluding a decade-old law known as McCain-Feingold “spoke plainly” in preventing the agency from limiting the disclosure requirement.

But the appeals court disagreed, ruling, “The [McCain-Feingold] statute is anything but clear.”

“We conclude that the district court erred in holding that Congress spoke plainly when it enacted [the campaign finance law], thus foreclosing any regulatory construction of the statute by the FEC.”

Complicating matters was the fact that the FEC did not appeal the initial setback in district court. Several private groups — including the Center for Individual Freedom and the Hispanic Leadership Fund– successfully asked the appeals court to intervene.

Congressman Chris Van Hollen (D-MD) initially sued the FEC and was disappointed with the appeals court opinion.

“Today the D.C. Court of Appeals struck a blow against transparency in the funding of political campaigns and reinstated the flawed regulation that rendered the disclosure requirements meaningless — made clear by the fact that millions of dollars of special interest money has flooded the airwaves with ads from anonymous sources,” Van Hollen said.

“The Court of Appeals’ decision today will keep the American people, for the time being, in the dark about who is attempting to influence their vote with secret money,” he said.

The appeals court expressed some frustration with what it called ambiguity in the FEC rules, saying they “raised as many questions as it purported to resolve.” The agency was now ordered to further explain and reconsider those disclosure regulations.

Direct donor contributions to federal candidates and political parties are subject to disclosure requirements.

The case is Center for Individual Freedom v. Van Hollen (12-5117).