The FEC will be defending the “structure” of the contribution limits this week in the US Court of Appeals for the District of Columbia. The case, Holmes v. Federal Election Commission, tests the constitutionality of the "per election" limits as applied to a donor’s choice to participate only in the one--the general--election. If a donor skips a primary, and wishes only to contribute in the general, she now cannot give the full amount allowed for the election cycle cycle, $5400, but only half of that: $2700, the "per election" limit for the general.  The Holmes plaintiffs’ point is that this bifurcation of the limits serves no legitimate anti-corruption purpose. Donors do not potentially corrupt candidates in the primary, or the general, or a run-off: the corruption, if it occurs, is the result of the amounts given through the date that the candidate is elected to office, after which the new officeholder is in a position to return the favor. And the limit Congress settled on to serve this anticorruption interest is the combined allowance for the cycle, $5400, a point that the Supreme Court stressed in McCutcheon.

The problem presented by the bifurcation of the limits is worsened by the messiness of its application. Incumbents and other largely unopposed candidates do well under this system, collecting money for primaries they don’t have to compete in and transferring the money to their general election accounts. Both the candidates in this position and their donors are aware that the money being given to the “primary” is really for the “general.” And a candidate can collect a contribution designated for the general election before the primary election is decided, provided that the candidate escrows the money and does not spend it until after the date of the primary. In this case, the candidate has, in fact, accepted a full cycle contribution of $5400 prior to the general election. It may be subject to a restriction on when it is spent, but the donor looking to make an impression, with a full cycle’s worth of contributions before the primary, will have done so.  Or, knowing that a primary candidate is closing in on victory, a donor can give the full primary election amount the day before the primary, and the full general election amount the day after, with confidence that he or she has given $5400 for the general election.

And add to all this that by FEC rule, an opposed candidate who, by operation of state law is not even on the ballot may still raise a "primary" or "general" election contribution in the full amount. The regulation reads:

A primary or general election which is not held because a candidate is unopposed or received a majority of votes in a previous election is a separate election for the purposes of the limitations on contributions of this section. The date on which the election would have been held shall be considered to be the date of the election.

11 C.F.R. 110.1(j)(3).

Law and Opinion in the de Blasio Investigation

March 17, 2017
posted by Bob Bauer

The de Blasio campaign finance investigation ended with explanations from federal and state authorities of their decision not to pursue charges. The Manhattan District Attorney Cyrus Vance, Jr. chose to give the lengthier account: ten pages of conclusions of law and facts in a letter to the State Board of Elections, which had referred the matter for investigation. Yet again in recent legal history, the prosecutor declines to prosecute but does not stop there, adding his disapproval of the conduct he would not indict.   He also suggests how the law could be improved so that it more directly, clearly prohibited the actions he does not approve of. The letter is something less than a model for productive prosecutorial encounters with the political process.

The District Attorney is passing on a case that involves a coordinated campaign of candidates, party leaders and party organizations to deliver support to targeted State Senate races. The question was whether party county committees became conduits for contributions to candidates that were larger in amount than what the candidates could accept directly. Donors were solicited for contributions to the parties, and the parties promptly provided the money to the campaigns for immediate use in paying their consultants. The coordinated campaign drew up plans for this arrangement with the county committees and submitted them to legal counsel for review. Counsel then approved of what the prosecutors refer to as an “end run” around the candidate contribution limits. The lawyer put his advice in writing and stayed in close contact with the client, providing “consistent advice” from planning to execution. The DA found no evidence of “bad faith” in the way the advice was sought or delivered.

The FEC and the Draining of Swamps

March 9, 2017
posted by Bob Bauer

Former FEC Commissioner Ann Ravel left a lengthy note as she left town to explain how bad things had gotten at the FEC. Her agency would not help drain the swamp; a bloc of Commissioners had scuttled the agency’s mission to enforce campaign finance disclosure and limits. Republicans promptly disagreed. So the Democrats and Republicans, at odds over enforcement policy, also disagree about the extent and seriousness of their disagreements.

With the agency down to 5, and most of the Commissioners' terms having expired, the question is what happens post-Ravel. There has been talk that the Trump Administration may make a full round of nominations and look to reshape the agency. Speculations have included the possibility that the Administration would end the long-standing deference to the other party in the nomination of half of the Commission and perhaps stack the deck, maybe by putting Independents in place of the Democrats. The law limits parties to half the seats; it does not guarantee a party any of the seats.

This heavy-handed maneuver seems unlikely, especially if Senator McConnell has anything to say about it, which he does. He has seemed committed to the practice of giving each party a check on the other. And it is hardly clear why, if the FEC poses little threat to Republicans and their constituencies on the issues they most care about, McConnell and his colleagues would want to open up a fight on this distant front when other battles raging around them have a greater call on their time and attention.

The more interesting question is what role the FEC--campaign finance--plays in the swamp-draining Trump platform. The Ravel farewell report declares the “unlikelihood” that the FEC will help with the draining activity. The Administration might be inclined to agree.

The New York Times has carried two pieces in the last days on the Internet politics, each making a case for its contribution to degraded democracy. Michael Birnbaum writes about the influence of rightist websites in Europe as both the Netherlands and France head into national elections. Tom Edsall adds a thoughtful, more academic note, interviewing scholars and citing to various studies that generally reinforce a dark message about “democracy, disrupted.”   The Edsall analysis also takes on the question of whether this disruption plays favorites, helping more the left or the right, and he concludes as follows:

There is good reason to think that the disruptive forces at work in the United States — as they expand the universe of the politically engaged and open the debate to millions who previously paid little or no attention — may do more to damage the left than strengthen it. In other words, just as the use of negative campaign ads and campaign finance loopholes to channel suspect contributions eventually became routine, so too will be the use of social media to confuse and mislead the electorate.
This is a significant coupling of concerns about the uses of social media with two of the prominent planks in the campaign finance reform program. Edsall may mean that each disserves democracy in its own way, or that there is an interaction among these developments that is generally helpful to conservative, and inimical to progressive, politics.

What is also unclear is why these means are closely associated with a specified political end. For example, what is it about a “negative campaign ad” that is markedly more useful to the right-wing sponsor? There are times when the anger can be turned in the opposite direction, as Republican Members of Congress recently found in their town hall meetings; and this anger is finding expression through social media, on TV, and surely in the election to come, in negative campaign advertising. Those same angry progressive voices will be amplified only if the required funding is available. “Loopholes”--as some understand Super PACs or (c)(4) issue advocacy to be--will flourish on the left and right alike.

Contribution Limits and “Standards of Review”

March 3, 2017
posted by Bob Bauer

Supreme Court nominee Neil Gorsuch has scattered few clues about his campaign finance jurisprudence. Commentators have had to make do with his concurrence in Riddle v. Hickenlooper, 742 F. 3d 922 (2014), a case involving a concededly defective Colorado law that discriminated against minor or independent candidates in the structure of contribution limits. Gorsuch’s concurrence could be read to question the more permissive standard of review that the Supreme Court in Buckley established for the defense of contribution limits. The Court allowed for scrutiny of contribution restrictions a step or more down from the strictest review: not attention to whether the government had a “compelling” interest and had “narrowly tailored” the means to achieve it, but a question of the state’s “sufficiently important interest” and the use of means that are “closely drawn.”

Gorsuch wrote in Hickenlooper that the two standards were “pretty close but not quite the same thing.” Id. at 931. To some observers, they seem not that close at all. They fear that any shift to a more rigorous standard would be the next and perhaps decisive blow to meaningful campaign finance regulation. The stakes, they believe, are high. But how high? And are there other questions to be raised about the political assumptions, perhaps also effects, of the leeway provided for the imposition of tight limits on contributions?