“Stop this Inanity”

August 7, 2014
posted by Bob Bauer

What an odd opinion from the Court of Appeals in Stop This Insanity. The Court decides that the regulatory burden imposed on a political activity satisfies constitutional requirements if there is an alternative, simpler route to roughly the same result. This is questionable enough, but the Court takes additional comfort in the fact that, in its view, the activity—corporate PAC activity—is “functionally obsolete”, a “relic”, an “artifact”. Stop This Insanity, Inc. v. FEC, No. 13-5008, 2014 WL 3824225, at *1-3 (D.C. Cir Aug. 5, 2014).  So, somehow, the constitutional standing of a legal restriction is strengthened by its pointlessness.

As my colleague Brian Svoboda has pointed out, the Court’s desire to make a virtue of disclosure requirements is also confused. The PAC vehicle that it is discouraging is the more transparent of the options open to a corporation funding independent expenditures. It offers the public a full, detailed view of who is supplying the money for the direct support of candidates, for the independent expenditures themselves. This is where the true interest in disclosure lies.  The Court here is inadvertently promoting less rather more useful disclosure. And the question of who is paying for the solicitation is generally clear: the corporation is paying for it.

Then there is the Court’s assumption, shared by the FEC, that to the pursue a constitutional course of action, one has to have a compelling reason. A litigant in the position of STII can offer the simplest of reasons: the law. By virtue of legal developments, including but not limited to Citizens United, a corporation should be able to establish a PAC with a “non-contributions” account from which independent expenditures could be made. Unlimited contributions could solicited into that account from any willing, lawful donor, inside or outside the company, and the corporation should be able to finance the solicitation of funds for these PAC expenditures.   All of this is a consequence of the law. But then the Court is suspicious: why do it that way, the “hard way,” why be “obstinate,” when the corporation could just make the expenditures itself?  Id. at 13.

In one of the drafts developed by  the FEC Office of General Counsel for an Advisory Opinion the Commission never issued, the agency counsel similarly questioned the organization’s failure to explain why it wanted to do things this way:

Requestor does not explain why it wished to use an SSF as the vehicle for making independent expenditures as opposed to using the connected entity itself for this purpose, saying only that its reason is “immaterial.”

Memorandum to the Commission from the General Counsel (Draft “B”), Agenda Document 12-13-A (Draft “B”),February 17, 2012, at 9 n.7.

What explanation is needed? Either the proposed course of action is legal or it is not; either it is constitutionally permitted or it is within the authority of Congress to proscribe.  What does the motivation of the organization have to do with it?  And, again, as Brian points out, it is not difficult to imagine the motivation: STII may wish to avoid political committee status and keep its tax-exempt activities separate from its political program.

The opinion of this case, while not an enduring model of judicial craftsmanship, does serve to clearly bring out problems with the existing regulatory regime as it collides with developments in the courts.

First, the laws and rules on the books are in desperate need of renovation in light of major developments in law and political practice. Congress could do it, or the FEC could do a fair share of it, or a combination of both. But eventually, it has to be done.

Second, the courts are struggling to make sense of the Watergate-era law now in transition.  As a number of judges—and Justices—have commented, the law as it has developed over decades is exceedingly complex. Now we have what the court in this case confronted, which is the effect on an aging, tangled regulatory scheme of major changes in jurisprudence and in political practice. This meandering and baffling opinion is another demonstration of how poorly the courts have been dealing with these circumstances. But then it is not really the courts’ work to do.

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