Deadlock and Ominous Uncertainty at the FEC

May 23, 2016
posted by Bob Bauer

The FEC has once again deadlocked on an enforcement case and left an important question dangerously open.  Months ago, the FEC could do nothing useful with a case about the use of LLCs to make contributions.  Now it is inviting trouble, and not for the first time, with a case about how hard a corporation may press its employees to support the employer’s political program.

In the recent case, the FEC was forced by the usual 3-3 division to dismiss a complaint that a company pressured employees to make political contributions to its PAC and favored candidates.  The question before the agency was whether to investigate. There were reasons, including internal company documents.  In one of them, the company advised managers that “we have been insulted by every salaried employee who does not support our efforts.”  There was a press report recounting the experience of unnamed employees with coercive practices, and one employee put her complaint on the public record as part of a wrongful termination action.

It cannot be known if, on investigation, the FEC would have found enough to support a conclusive finding of violation.  The dissenting Commissioners who declined to support further inquiry may have had their so far unexplained reasons.  But with the dismissal of the Complaint and nothing more heard from the agency, the regulated community has a fresh signal of either Commission paralysis on an issue of central importance, or of ominous possibilities now available to employers in soliciting political contributions from their eligible managerial ranks.

To the extent that large contributions are given to secure a political quid pro quo from current and potential office holders, the integrity of our system of representative democracy is undermined. Although the scope of such pernicious practices can never be reliably ascertained, the deeply disturbing examples surfacing after the 1972 election demonstrate that the problem is not an illusory one. 

Buckley v. Valeo, 424 U.S 1, 27.  

This was the magnitude of the conclusion that the Supreme Court drew about the prevalence or appearance of corruption when it upheld the contribution limitations of the Federal Election Campaign Act. The corruption problem was “not… illusory” but its scope could ‘never’ be pinned down.  The Court then cited to the decision of the court below that had offered a few example of pernicious behavior with campaign funds in the 1972 presidential election. That was enough.

In the years following, enough has not proven to be as good as a feast.  And in search of the feast, anyone with a point to make about the campaign finance laws has been pursuing conclusive data to support it.  Corruption, or the absence of corruption, or the different definitions and measures of corruption, have all occasioned argument about the evidence, as has the related but different project of proving the “appearance” of corruption.  Argument about the evidence has yet to be settled and there's every reason to believe that they never will be.

The related but still distinguishable argument about political inequality has meant the same search for clinching proof that policy follows money and makes for a “rigged” system.  This week, the Center for Competitive Politics took after a widely reported paper about the correlation between the aspirations of the wealthy and the manufacture of public policy.  Noting that Rick Hasen and Larry Lessig had made use of the paper in arguing for a political equality theory of regulation, the CCP cited to critics of the scholarship and its conclusions.  In this critical view, which CCP evidently favors, there is substantial agreement across income groups about policy.  So the study that purportedly shows that we have a democracy of the rich cannot survive close scrutiny. CCP suggests that this should bring sharply into question the “lofty solutions” of reformers.

Disclosure Wars, Continued: Tax Returns

May 16, 2016
posted by Bob Bauer

In the last two election cycles, in both major parties, presidential candidates and the press have argued over the timeliness and completeness of the release of personal tax returns.  This year, the disagreement has taken a new turn with the possibility that one of the candidates will not release his filings at all.  Editorialists have argued for compliance with the “norm” of disclosure that has been observed for decades.  John Wonderlich of the Sunlight Foundation questions why release is just a "norm" and not a legal requirement, and he argues for a new law.

That the release of taxes remains a norm and not more may be explained by a number of factors.  For elected officials, there's always the fear that there is no stopping point.  If Congress were to mandate the release of returns by presidential candidates, the question would naturally turn back on them--why they would not put themselves under the same obligation.  Gradually other elected officials might feel the same pressure, which could eventually also influence the judgment about whether the returns provided by senior government officials during the vetting process should also be subject to public disclosure.  To keep a norm a norm is to keep the underlying transparency expectation within limits and to leave issues of compliance to public debate and judgment.  It serves also to maintain a balance between exposure of this information some of the time, in a narrow set of circumstances, but only by public expectation and political choice, preserving the overall principle of privacy.

There may still come a tipping point when the norm is deemed insufficient and a legal requirement is put in its place.  It is hard to say when that point might be reached.

Category: Disclosure, Ethics

Undesirable Alternatives

May 11, 2016
posted by Bob Bauer

The Louisiana Republican Party has enlisted Jim Bopp to mount a challenge to campaign finance restrictions on state political parties and so it is widely assumed that this is a Trojan Horse lawsuit with much wider significance for the survival of McCain-Feingold.  And of course if the three-judge court, then eventually the Supreme Court, decide the case a certain way, it could well help doom the 1970’s reforms--if not immediately, then eventually.  Rick Hasen, among others, has embraced the doomsday scenario, and the reform community has communicated to the three-judge court just this view of the stakes.

All of this may be true but this case and likely others to follow point to the costs of the bitter, stalemated discussion of campaign finance policy.  Louisiana and its lawyers have a reasonable case against the regulatory burdens on state parties: they stress that the dissatisfaction with aspects of these rules is bipartisan.  Thoughtful observers have concluded, as Brookings scholars recently did, that reforms are required.

But on this, as on other campaign finance issues, there is little likelihood of progress: no serious legislative engagement and, outside the Congress, a sharply divided political debate that mainly sorts out into hardline “reform” and “anti-reform” camps. The fight has largely moved to the courts, and from the reformers’ perspective, and with some uncertainty after Justice Scalia’s passing, this serves to put at risk the entire Buckley framework.  But if the outcome there is muddled or inconclusive, what will continue is the slow, steady rot of a regulatory regime characterized by ambiguity, complexity and evasion.  Neither of the alternatives is desirable.

Michael Kinsley’s Defense of Citizens United

May 5, 2016
posted by Bob Bauer

Michael Kinsley intends a face slap to" liberals" by denying, as only he can (succinctly and entertainingly), that Citizens United was wrong.  He argues that the Court ruled correctly--“it was a good decision”--and vindicated First Amendment values.  He succeeds in drawing a little blood.  He notes that the same critics who say that money is not speech disagree with Citizens United precisely because they believe that money is speech, and they don't care for the volume and potential effectiveness of the speech that the decision allows for.  Fair point.  He raises the usual alarms about attempting to amend the Constitution to overturn the decision, and he concludes that the only solution to any undue corporate influence is politics: "if enough people are enraged enough by the imbalance of political power caused by money, they will vote against big money, which will turn it into a negative."

There is more something more to the dissatisfaction with Citizens United that Kinsley does not come to terms with.  It is in part an objection to the Court’s performance in the particular case.  As others not unsympathetic to the outcome but unimpressed with the work product have noted, the Court's craftsmanship left much to be desired.  It could have found for the aggrieved organization, Citizens United, on considerably narrower grounds.  Instead it chose to transform a case about in-theater and on-demand documentary distribution into a test of corporate free speech rights across the board. This level of ambition called for a high degree of execution, which was dramatically lacking in an opinion that, as Professor Michael McConnell has written, was “overly long and unfocused.”

Beyond these faults is one even more basic, which is the Court's chronic temptation to accelerate the movement of major issues from public debate and engagement to decisive judicial resolution.  The question of the corporation’s role in politics is complex and both politically and socially controversial.  There is no generally accepted answer, except that most concede that there are constitutional limits within which any such answer would have to be devised.  It would have been no sin, and the better part of wisdom, for the Court in Citizens United to have addressed as narrowly as possible the immediate issue (a nonprofit’s distribution and promotion of a political documentary), and then let the argument continue. Still better, it might have addressed the issue with the very intention of leaving space for that argument to continue.