Enforcement of the campaign finance returns regularly to a familiar challenge, which may eventually prove too much for it, and this is the challenge of establishing the difference between the clear-cut campaign appeal and one that we all know is intended to influence an election and may have that effect.  Making out that difference causes supporters of the law the keenest exasperation.  Their urge is to narrow the difference, to have what we all know and what the law permissibly regulates merge as seamlessly as possible.  Recent developments show how, in straining to make it so, enforcement policy will hasten the undoing and fatal loss of credibility for the whole regulatory undertaking.

Three Tests for Political Activity

     In at least three places, at varying stages of development, this regulatory determination to smoke out what we all know shows up:  

 --The provision prohibiting electioneering communications by corporations and unions within specified periods before elections.

 --The test that the Commission just passed for ads that might fall within this class of corporate and union-paid communications, but which will be excused and cleared for broadcast as “grassroots lobbying” or because of some other doubt about their purpose.

 --The “second prong” of the express advocacy test, used for a number of purposes, the latest of which is to help the FEC spot the delinquent “political committee” that, passing itself off as another entity, does not comply with the law’s registration reporting and financing provisions.

      Each of these tests shares in common, more than their differences In wording and development, this foundational concern with uncovering the well-camouflaged political communication.  Two of them, but not all of them, are defended as necessary to clamp down on cheating by corporations and unions—by “big money”—thought to the most dangerous of all. The third, the express advocacy test, may be used as a check on cheating by individuals, acting alone or in groups. 

     In time, the tests have come very much to resemble one another. Corporations, profit or nonprofit, big or small, commercial or ideological are treated much the same, and their communications are scrutinized under a test very similar to the one by which the law judges the legality of union and individual communications.  The differences in the test are superficial; now any and all political activity, by one version of the test or the other, can be probed to see if it is such that we all know that it is campaign activity and should be regulated as such. The tests give little practical guidance or impose few meaningful limit son agency action, but they are the “legal basis” to which the agency can usefully point when acting on its intuitions—on what we all know.

The Tests in Development and In Action

     Over the last two weeks, the agency has put on view how each of these tests have evolved and the point reached in this evolution.  The WRTL rulemaking is the most recent phase in the development of the “electioneering communication” test for corporate and union political activity, and the agency, in this same period, heard and resolved the case of the “Media Fund”, an issue advertising “527” funded by individuals and decided in large part on the second prong of the “express advocacy” test.

     Electioneering Communications. The electioneering communication test was the once, in theory, the simplest—centering on a mere reference to a candidate, its timing, its audience, and the means of its dissemination.   But it was only deceptively clear.  The government was so unsure that it could \withstand constitutional attack that it included in the law a “back provision” that would catch only those communications that promoted, attacked, supported or opposed a candidate, and that could not be read “plausibly” other than as an “exhortation” to support or oppose (PASO) a specific candidate.  The Supreme Court let things ride for a time, until it decided WRTL, and then the government was rebuffed in its plan to have the provision applied inflexibly, no exceptions allowed. 

     But the back-up provision’s construction is not the one that the Court has required.  The WRTL Court insists that only ads that cannot be reasonably read another way be regulated (prohibited) as electioneering communications.  It suggests criteria for making that determination in the case of “grassroots advertising”, such as mentions of candidates or parties or elections, or commentary on fitness, character or qualification.  Gone from the discussion are the elements of the back-up: the plausibility test has been replaced by a test of reasonableness, and the PASO restriction has been ignored.

    This was inevitable: hard as it tried, the government had no hope of persuading the Court that there should be no test at all, no “as applied” exceptions, and that the application of the law should rest inflexibly on reference, timing and targeting, irrespective of the actual message broadcast.  A test had to be developed to meet constitutional objectives—a test to determine which of the ads presented for exemption were truly issues ads and which were ones we all know were meant to influence campaigns.  The government bade for acceptance of its own, very aggressive test, which would look beyond the text to context, and investigate the intent of advertisers by scouting for clues in their other statements and activities. 

     The Court chose to disregard context and analyze text only, and  now, under the rule just approved to answer the Court’s decision, the FEC decide what to do with ads, unlike those in WRTL, which have electoral contact but for which an exemption is still claimed.  More language has been generated.  The agency will consider the ads as a whole, “on balance”, with consideration, but not necessarily decisive consideration, given to electoral content. 

     The Express Advocacy Test. The express advocacy test in the Commission’s rule has been the weapon of choice in the agency’s skirmishes with the 527 community.  This branch of the rules gets at any and all funding sources, individual money included.  Here there is more wording, put to the task of isolating the activity we all know to be campaign related—specifically political committee—activity.  There is a conception  here of “reasonableness, though put differently than in the WRTL test, and the expectation is that a communication will constitute “express advocacy” if it is “suggestive” of only one meaning.

     The Media Fund was formed as a 527, funded by individuals to speak to issues in the campaign. The FEC has now extracted a fine from the Fund for its failure to register as a political committees and to observe limits on its financing. This was the first case to benefit from a public hearing at the “probable cause” stage, under new agency procedures, and the transcript, now available, tells a great deal about how the different tests for campaign related activity—for what we all know—function in practice.

     The Media Fund’s position was simply that it did indeed intend, very deliberately, to “refer” to federal candidates: it had wanted in 2004, in fact, to make “electioneering communications”, legally, because these would be funded by individuals and not with corporate or union funds.  What developed at argument was a contest between a formal legal position ably advanced by Media Fund counsel Lynn Utrecht, and empirical judgments of Commissioners about what we all know about the purposes of the Media Fund.  Utrecht argues legal standards; the Commissioners respond with questions about how a specific mailer could be possibly (and reasonably) be interpreted, or what they should make of the fact that candidates for office—chosen for discussion for the very reason that they were candidates for office—featured centrally in the Fund’s communications. 

     Now the Commissioners had their own law to argue, albeit law of recent manufacture and applied for the most part retroactively: the “major purpose” of the law and the “express advocacy” test.  It was the best they could muster, but it is a flimsy construct: the “major purpose” test is not found in the regulations, and the “express advocacy” test, satisfied for years only by “magic words”,  was now applied through the far looser, more inexact and unpredictable  standards of “Prong B”.   It can’t really be shown how this all works: it is just there, serviceable in giving the illusion of legal authority to judgments about what we all know about campaign activity.

And the Future….

     The arguments about issue advocacy will not peter out, of course, after WRTL or the experience with 527s in 2004.  Groups, individuals, corporations and unions have the need or desire to speak to the campaign issues, or they will find in the campaigns just the opportunity they want to highlight an issue or introduce it to a national audience.  And if they speak, they will do so in a regulatory environment thick with risk created by indeterminate “rules”.  All these speakers can be told is this: that they should avoid activity that we all know is regulated campaign activity, or accept the consequences. 

     This is the business of the campaign laws, but increasingly a problem for everybody else.  Either the law with time and experience will wear away resistance and increase the level of tolerance for regulation.  Or it will itself come to be found intolerable.

Bob Bauer