Just before the turn of the year, the Tenth Circuit decided that Citizens United, the organization, was entitled to the Colorado campaign finance law’s press exemption and so was not required to file public financial reports when producing and distributing a political documentary. Citizens United v. Gessler, 773 F.3d 200 (10th Cir. 2014). Colorado has construed the exemption broadly to apply to online publications and bloggers as well as to print and traditional media outlets.  But the State urged that the Court distinguish between entities about which the voters know or could easily learn something, and those hiding behind empty names lacking cue or content and having no extended operating history that listeners or views could consult for useful information.  The latter organizations—the “Citizens for a Better America” or “People for Justice” —are engaged in what it termed called “drop-in advocacy” during election seasons.

The Court, impressed with the distinction, still rejected its application to Citizens United. CU was well known; there was ample information available to anyone caring to seek it out, and the informational interest of voters was adequately protected. On its reading of Citizens United, the Court emphasized the interest supporting disclosure as the voters’ informational interest, not the deterrence of “corruption” or its appearance.

This raises the question: for purposes of the disclosure requirements based on the voter’s informational interest, is it possible to distinguish between an ongoing enterprise of known purpose and the shadowy “drop-in” advocacy group which is often here today and gone tomorrow?  And if it is, is that interest served primarily by disclosure of donors, or by other information about its organization and purposes?

Disclosure in a 21st Century Reform Program

February 2, 2015
posted by Bob Bauer

Writing off the Koch announcement of massive 2016 spending, Ron Fournier urges that we be realistic about campaign finance reform in the 21st century: no limits, just instant disclosure. He seems to be salvaging what he can from the current mishmash of changes in political practices, outdated campaign finance requirements and increasingly unsparing limits on Congress's constitutional authority. Without a sharp focus on disclosure, he argues, the 2016 election will go largely dark.

Fournier’s analysis has two considerable virtues: a call for the debate to adjust to constitutional and political realities and an emphasis on single-minded priority in the reform of the law. The debate is stuck, and one reason is that a fair number of interested observers are dedicated to fighting the same arguments heard since the 1970s. A whole host of objectives are being kept artificially alive for discussion. Political spending is to be reduced and the prohibition on corporate spending restored. Independent spending is to be curtailed because some of it is suspect, gutted by disreputable, if not invariably illegal, forms of coordination. Political discourse is being poisoned by attack advertising.

And, of course, there is too much "dark money" and disclosure law should be strengthened against it. Here is where Fournier recommends that reform energy be expended.

The Privacy-Disclosure Balance and Its Complications

December 18, 2014
posted by Bob Bauer

When skeptics of compelled disclosure warn about the dangers of reprisal and harassment, the answer most often is that the Supreme Court has already addressed this contingency. Groups that can make a showing that they are uniquely vulnerable to harassment can apply for an exception. In this way the conversation drifts quickly to NAACP v. Alabama.

The skeptics, however, remain unpersuaded, and in a recent blog posting, Lyle Denniston points out that changes in politics may account for their discomfort. He refers specifically to the “deep polarization of the parties and the effect that has on coarsening the content of political expression.” He suggests that in this climate, the concern with donor privacy has broadened sufficiently that “privacy in political expression” now figures prominently in disclosure debates and requires a balance that the Supreme Court will be eventually called on to strike.

As the Denniston posting was published, a federal district court in Colorado entered an order in the latest phase of litigation over a state disclosure requirement modeled on the federal “electioneering communication” provision. This case serves as a good example of contemporary disclosure controversies, bringing out key disagreements over how disclosure laws should apply to smaller-scale issues speech.

The authors of the Bright Line Project proposal for ferreting out and regulating 501(c)(4) political intervention have given the matter a considerable amount of thought and have submitted to the IRS a detailed proposal. In a number of respects, the approach that they originally announced has changed. Its purpose, however, remains one of offering clarity where now there is very little, much to the frustration of practitioners looking to offer clear guidance to their clients. It is a worthy project and addresses a major problem: no one knows what distinguishes social welfare from electioneering activity, and the consequences of the confusion have been plain for all to see.

At the same time, the proposal has to answer the question of whether it is possible for the Internal Revenue Service to tackle questions like this with a reasonable prospect of general public acceptance and confidence. There is reason to doubt it. For as noted in analysis of an earlier Bright Line Project proposal, and as seems still true in this revised version, the agency would have considerable discretion in deciding whether 501(c) communications have crossed into the restricted political zone. And this task—operating within the political world—is one which tax agency officials are not trained or well suited for, nor expected to be.

The Van Hollen Case

December 1, 2014
posted by Bob Bauer

In a second round, at the second level of the Chevron test, a federal district court has struck down the FEC's attempt to read a "purpose" requirement into the “electioneering disclosure” rule. Van Hollen v. Federal Election Commission, No. 11-0766 (ABJ), 2014 WL 6657240 (D.D.C. November 25, 2014). The general view is that the Court probably got this right and that to the extent that the issue has remained unresolved for this long, the FEC (once again) should take the blame. Those adopting this position point to Judge Jackson's opinion, in which she lays out in some detail the obscure route by which the FEC arrived at its position.

But, as so often, the FEC is paying handsomely for the complexity of the issue and the sins of others. A fair share of the responsibility for this disclosure controversy lies with the Supreme Court's garbled jurisprudence, which has produced confusion about the constitutionality of campaign finance requirements applied to “issues speech”.