When the Law Can Seem a Bit Much, Mutch Explains

August 30, 2016
posted by Bob Bauer

In this pre-Labor Day period when blogging will be light, here are a few notes:

1. Robert Mutch, who has written extensively about the history of campaign finance, has now published a guide to law and rules, Campaign Finance: What Everyone Needs to Know, just published by Oxford University Press. He means “everyone.” It is a citizen’s manual, with accessible explanations of abstruse statutory regulatory, and case law material, a chronology of major developments, and a glossary of key terms. He also provides throughout comments on the campaign finance reform debate. Mutch has a point of view on reform issues--who doesn’t?--but it is not harmful to his project. It adds a little zest to the discussion and more interest, therefore, for the general reader.  That reader has long deserved a resource like this, and here it is, courtesy of Robert Mutch.

2. That same general reader might want to puzzle over some of features of the well-worn law that is Mutch’s subject. An interesting case now on appeal to the Supreme Court, which goes by the name of a plaintiff with an unambiguous politics--Stop Reckless Economic Instability Caused by Democrats--questions why it is that political committees in existence for at least six months, so-called “multicandidate” committees, may give upon passing out of their infancy more to candidates but less to political parties (provided they also meet other minimal conditions on the level of support received and given).  The multi-candidate committee satisfying this 6-month waiting period can give a candidate another $2300 per election, for a total per election limit of $5,000. But its contributions to national and state parties are substantially cut from $32,400 to $5,000 and from $10,000 to $5,000, respectively.

The Supreme Court will soon decide whether to take up a major case about disclosure and this has received little attention—far less than it should. At issue is the clarification of how far government authority extends in requiring the disclosure of the financing of “issues speech”--speech or just information about candidates’ positions that does not involve engaging in advocacy of their election or defeat. There are reasons why the case might have been overlooked: it involves a small organization in a small state, and the activity concerns state and local, not federal (much less presidential), candidates. Perhaps, also, because it is “just” about disclosure, this case might be supposed to pose little danger of harm to anyone’s rights or legitimate expectations.

This is serious business. As the states move along with their own reform programs, and as litigation proceeds under different standards applied by different circuits and diminishing consistency in the treatment of federal and state or local-level enactment, disclosure doctrine is losing its coherence, and key constitutional distinctions once taken for granted are being rapidly eroded. One disturbing result: the “big” and sophisticated spenders at the federal level are more protected than the “little guy” at the levels below.

In the case in question, Delaware Strong Families v. Denn, the speech took the form of a Voter Guide that reproduced positions supplied by the candidates themselves, or in the case of candidates who declined to cooperate, their stated positions drawn from the public record. DSF is a 501(c)(3) barred from endorsing candidates, unlike an affiliated (c)(4) that may and does. There is no allegation that the (c)(3) is evading the prohibition on partisan speech. Delaware has enacted a disclosure law that applies to this Guide, requiring the disclosure of DSF donors who have given over $100 over a four- year period. The law covers all speech referring to candidates, whether by broadcast, mail or Internet, within 30 days of a primary election or 60 days of a general. It is triggered by the expenditure of more than $500 without regard to the size of the audience.

DSF sued and won in district court, then suffered a reversal of fortune in the Third Circuit Court of Appeals. The short opinion issued by the Third Circuit is striking in its breadth and, one might say, daring. It looks past the critical Buckley distinction between express and issue advocacy, apparently in the belief that, on this point, the 1976 decision has been overtaken by the decisions in McConnell and Citizens United, especially the latter, which it reads to allow for the regulation of any issues speech that could influence voter choice. So, on the assumption that its position is well supported by recent developments in the constitutional law, the Third Circuit embraced this view:

By selecting issues on which to focus, a voter guide that mentions candidates by name and is distributed close to an election is, at a minimum, issue advocacy. Thus, the disclosure requirements can properly apply to DSF’s Voter Guide…”

793 F.3d 304, 309 (July 16, 2015)

The State of Delaware has joined with reform organizations to defend this proposition. It concedes that the statute is expansive in reach, sweeping in smaller organizations and small-scale spending. But it justifies aggressive disclosure policy in a state the size of Delaware, where a little spending goes a long way. It contends that states have the right to decide how much spending is effective in the local conditions in which it occurs, taking in account the size of the electorate and other factors, and to apply disclosure requirements accordingly.   And the states can conclude that issues speech—in this case, the duplication of material the candidates supply –triggers mandatory disclosure of small donors in the interests of an informed electorate.

“Legitimacy”: the FEC and the Press Exemption

April 21, 2016
posted by Bob Bauer

The FEC tries to make up its mind, case by case, whether an organization distributing political material is a “press entity” engaged in a “legitimate” press function.  It concluded some time ago that Citizens United was a press organization when producing and distributing documentaries.  Advisory Opinion 2010-08 (June 11, 2010). This year it could not decide whether to bestow similar grace on another documentary producer, one who evidently does not care for President Obama.

Commissioner Weintraub tersely noted that the producer sent free samples of his product to millions of households in 2012 “swing states.”  This was enough for her to conclude that the producer may have been a "press entity" but it was not acting like one: it was not engaged in a “legitimate” press function.

The General Counsel reached a different conclusion and recommended that the FEC let things go—that it exercise its broad discretion in the producer’s favor.  It seemed to agency counsel that this particular press entity was acting legitimately enough. The General Counsel credited the claim that the free distribution was a commercial promotion and not only, if predominantly, in “swing states.”  The producer appeared to have demonstrated sufficient commercial or business purpose by arranging for sales through websites and via Amazon, and by contracting for streaming services through both Amazon and Netflix.

Commissioner Goodman, joining his Republicans in voting with the General Counsel, added a charge that the Democratic objections were a threat to press freedom.

One FEC Commissioner’s Answer to Citizens United

April 7, 2016
posted by Bob Bauer

FEC Commissioner Weintraub believes that she has hit upon a regulatory maneuver to stop publicly traded corporations from making independent expenditures, or unlimited contributions to independent expenditure committees.  At a time when newspaper editorialists carry on with attacks on the Commission as “worse than useless,” the Commissioner seems determined to prod the FEC to face the major “money in politics” issues of the day.

This is her theory: foreign nationals cannot make contributions or independent expenditures, which means that the FEC could establish that no corporation with foreign nationals as shareholders could engage in this political spending.  The rule would not bring about this result outright: it would require a corporation to "certify" that it was not making contributions or independent expenditures with these funds.  As a practical matter, corporations with foreign national shareholders could not risk making the certification and would forgo this political spending.  The Commissioner plans to direct lawyers to produce proposals that she and her colleagues can consider in a future rulemaking.

This is an interesting proposal, but it is generally appreciated that a Commission unable to agree on matters of lesser moment will not find a majority in favor of this one.  But even beyond that, the proposal is vulnerable to questions about its viability as a regulatory measure.

Louisiana is arguing with the help of the indefatigable Jim Bopp that McCain-Feingold cannot limit “federal election activities”, such as GOTV and voter registration, that state and local parties conduct independently, without coordinating with their candidates. Democracy 21, the Campaign Legal Center and Public Citizen reply in a brief filed as amici that this claim is clearly foreclosed by existing precedent: the soft money limits on state parties under McCain-Feingold are contribution limits, not spending limits, and there is no protection gained from claiming to conduct independently the activities paid with these contributions.

The litigating team representing these leading reform organizations is top-notch, and so it is not a surprise in reading their brief that they do a fine job with the materials at hand. But one also sees that there is a problem—not with the advocacy, but with the state of the law.