For the third year in a row, states across the country performed best in the category of Campaign Finance Disclosure Laws.  There were only a handful of improvements made to the area of states’ disclosure laws measured by this study, none of which resulted in significant changes in states' existing letter grades.  Four states received law grades in the A range, and there were more B grades (19) in this category than in any other.  Twelve Cs and five Ds round out the passing states; ten states failed the disclosure law assessment.

• 28 states require a contributor’s occupation and employer to be disclosed.
• 7 states require only a contributor’s occupation to be disclosed.
• 2 states require only a contributor’s employer to be disclosed.
• 13 states do not require disclosure of either occupation or employer. 
• 35 states require timely reporting of last-minute contributions.
• 48 states require a description of an expenditure.
• 20 states require expenditure subvendor information to be reported.
• 40 states require independent expenditures to be reported.
• 22 states require timely reporting of last-minute independent expenditures.
• 30 states conduct mandatory desk reviews of disclosure reports.
• 13 states conduct mandatory field audits of disclosure reports.

Significant Changes Since 2004:

• 1 state added contributor occupation reporting (South Carolina).
• 1 state added timely reporting of last-minute independent expenditures (Illinois).
• 2 states increased the number of pre-election reports that must be filed by candidates (Iowa, South Carolina).
• 2 states added an additional non-election year campaign finance disclosure filing (Idaho, Ohio).

States with the strongest disclosure laws, in rank order from one to ten, are: California; Washington; Montana; Hawaii; Georgia; Kentucky and Minnesota (tied for 6th); New Jersey and Virginia (tied for 8th); and Florida, Missouri and North Carolina (tied for 10th).

States with the weakest disclosure laws, in rank order from 41 to 50, are: Maryland; Indiana; Utah; New Mexico; Vermont; Nevada; Alabama; Wyoming; South Dakota; and North Dakota.

While no state made improvements by December 2004 (the cutoff for disclosure law changes to be reflected in this study’s grades) that were significant enough to result in a grade change in this category, increased public scrutiny of money in politics has prompted several states to initiate reviews of their campaign finance laws, which has already resulted in additional progress in this area.  Oregon's Secretary of State appointed a Campaign Finance Disclosure Panel, which met throughout 2004 and developed legislation that was introduced and passed during the 2005 session; the new law improves several aspects of disclosure in Oregon and is described in that state’s summary.  A Citizen Advisory Group on Ethics appointed by Tennessee’s governor in July 2005 completed a review of ethics practices in the state and in September 2005 presented its report, including recommendations to enhance disclosure of money in politics.

Grading State Disclosure 2005 again found that all states require disclosure of some itemized contributor information, and every state except South Dakota requires reporting of the date a contribution was made. Twenty-eight states require the disclosure of the occupations and employers of contributors, and an additional nine states require one or the other, but not both.

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While these itemized details about contributors can help the public "follow the money", this process is much easier in the 33 states that also require reporting of cumulative amounts donated.  In the 17 states that do not require cumulative amount to be disclosed, enforcement agencies and members of the public must conduct time-consuming analyses in order to confirm that campaign contribution limits are being observed.

Forty-nine states require the reporting of some level of detail for campaign expenditures, with North Dakota still being the one exception.  Except for Mississippi, all 49 states that require expenditure disclosure also require descriptions of expenditures.  All 49 except South Dakota require reporting of vendor name.  Forty-six states require the date of an expenditure to be reported, and 20 states require reporting of subvendor information, such as an itemization of credit card or consulting bills. 

States vary widely in the frequency of disclosure reports required in both election and non-election years.  Fourteen states require one pre-election report, 20 states require two such reports, and 16 states require three or more reports before an election.  In non-election years, 24 states require one report, while 25 states require two or more.  Only one state, Utah, does not require reporting in non-election years.  Timely disclosure of last-minute contributions—those made between the close of the final pre-election reporting period and Election Day—is required in 35 states.  In the 15 states without this type of reporting, voters do not learn about last-minute financial transactions until after they have cast their votes.

In most states, campaign finance restrictions limit the amount of money individuals and organizations can contribute directly to a candidate's campaign committee, and as these restrictions have become more stringent over time, independent expenditures have become more prevalent.  As independent expenditures can comprise a substantial portion of election-related spending, it is important for the public to know which groups are financing these independent activities in support of, or opposition to, candidates.  While 40 states require the reporting of independent expenditures, seven of these state do not require that reports include the name of the candidate benefiting from the expenditure, and only 22 require last-minute independent expenditures to be reported before the election.

While all 50 states have either civil or criminal enforcement mechanisms in place to ensure compliance with campaign finance disclosure requirements, 17 states do not have mandatory auditing provisions in their laws. Thirty states conduct mandatory desk reviews of disclosure filings, but only 13 states conduct mandatory field audits of campaign finance-related receipts and documents.  Only nine states have a complete set of enforcement provisions, including both mandatory desk reviews and field audits, and civil and criminal penalties.  Even in states with excellent enforcement provisions, ensuring compliance with the law is dependent upon the state’s enforcement agency receiving adequate funding to carry out its responsibilities, and a number of agencies have seen their budgets cut in recent years.  California's Fair Political Practices Commission, for example, has recently reported an inability to carry out enforcement mandates due to budget and staffing shortfalls, and the state of Virginia appears to be in a similar situation.