The Times Under Scrutiny, and Will We Get a Gander at the Times’ Response to the FEC?

     Now that the New York Times has run into legal troubles, ensnared by reforms it has never tired of promoting, it is finding an ally, sort of:  the Wall Street Journal.  "Other People’s Politics," Wall Street Journal (Sept. 25, 2007) at A18.  The Journal defends the Times' right to charge whatever it wants for its ads, for whatever reason:  to support a candidate through discounts, or more directly.  The Journal would like the whole regulatory structure to vanish from sight.  So in one editorial, the Wall Street Journal sides with both the Times and Daily Kos, each of which has recently faced allegations that it violated the campaign finance laws.

     Each, too, enjoys an exemption from the campaign finance laws, conferred on "media."  11 C.F.R. §§ 100.73; 100.132.  The Journal questions why media should have such an exemption.  It suggests that the media’s hold on the exemption is necessarily tenuous, when in a regulated system, the relief granted can be withdrawn and "sooner or later [the regulators will] come after the press."  Of course, there are limits that the regulators can’t ignore, constitutional limits; but which limits apply is a question that the Supreme Court has more or less exclusive power to resolve, and the Times, among other media, has certainly shown little faith in this Court’s constitutional choices in campaign finance issues. 

     But what the Journal misses is the preposterous character of the exemption and how its acceptance—that belief that such an exemption is defensibly constructed and applied—demonstrates the degradation in First Amendment sensibility experienced over decades of campaign finance restrictions.  The government decides under this exemption which organizations are "press entities" entitled to this protection. 

In determining whether the media exemption applies, the Commission has traditionally applied a two-step analysis. First, the Commission asks whether the entity engaging in the activity is a press entity as described by the Act and Commission regulations. Second, in determining the scope of the exemption, the Commission considers: (1) Whether the press entity is owned or controlled by a political party, political committee, or candidate; and (2) whether the press entity is acting as a press entity in conducting the activity at issue (i.e., whether the entity is acting in its ‘‘legitimate press function’’).

71 Fed. Reg. 18607 (April 12, 2006).  To some, it will be consoling that the government has a special analysis for spotting, so that it can protect, the true press entity, and that it can judge whether the particular press entity is "acting in its ‘legitimate press function’."  Once the government has redefined the question as a regulatory question, on which turns the award of the exemption, who better than regulators to make the call?

     Defenders of the regulation will argue that it has poses no special harm in practice.  The FEC has picked few fights with media; it mostly avoided these quarrels, most recently and commendably with web-based media.  It has defined the rights of media broadly, holding that they can solicit funds for candidates and coordinate with them, and with parties and other partisans, their stories and commentaries.

     But this is just prudence on the part of regulators who, holding the power, face natural political limits on their authority that would be hard for them to ignore.  This need not always be the case; nothing is ever "always the case."  And in this field, the harm done is not realized upon full prosecution ending in a finding of liability.  Investigation is enough—and the threat of it—to cast a shadow on speech.

     The Journal mentions the recent experience of Daily Kos when challenged over its entitlement to the exemption.  The FEC tossed out the complaint quickly.  The agency’s procedures in receiving complaint is to invite a response from the accused, and Kos supplied it, a convincing one.  Had Kos not replied, declining any voluntary response, the FEC would have faced the question of whether to proceed to compel a response.  All of this would have taken place over political statements on the Internet, by an online publication:  the statements presented a regulatory issue, and it remains such an issue, whether this Kos complainant appeals to a court, as he has considered doing, or another shows up later with another version of the same attack on the exemption. 

     And Kos averted this problem by responding—recognizing the government’s right to inquire, to administer the "exemption."  This was a sensible decision, but not for that reason any less significance for bringing out clear the regulatory relationship of government to press.

     Still the media, as the Journal notes, can be thankful:  in world where much of this kind of political speech is presumptively subject to at least regulatory inquiry, it has an "exemption" on which to rest its defense.  The Journal’s point is that we should, all of us, be so lucky.

     For the Times, in this instance, the exemption does apply (on this point, the Journal gets it wrong), for in selling the ad to MoveOn, it was not engaged in "covering or carrying a news story, commentary, or editorial."  It was acting as a corporate vendor of a service, and it is bound by the rules governing permissible corporate discounts.  It is hard to imagine that it has much to fear here:  the FEC will not be eager to face off with the mighty Times, and if this was a pricing error, or just an employee’s anti-war zealousness, it would make little sense for the Commissioners to make of this a major corporate spending case, especially in light of MoveOn’s payment of the difference between the discounted and full rate.

     This does bring up an interesting question:  will the Times respond to the American Conservative Union complaint, as the agency will invite it to do, and, if so, will it release the response to the general public?  The Times could withhold the response, taking advantage of the Commission’s "confidentiality" provisions.  11 C.F.R. § 111.21.  Or it could make it available, and allow all who are interested to review the facts of the ad sale, as the Times presents them, and its legal arguments.  What the Times has to say—whether it chooses to say anything at all—is a matter of general interest, public interest. 

     Will the Times act as a "press entity," choosing a course of transparency, or will it handle this as any large corporation might, as a communications or public relations challenge, to be played by the book?

Bob Bauer