Sen. Charles Schumer and Rep. Chris Van Hollen released a framework of proposals Thursday for legislation they intend to file after the Presidents Day recess. The quarter-baked policy plan poses constitutional concerns and several provisions seem to directly contradict the Supreme Court’s ruling in Citizens United v. Federal Election Commission.
“The First Amendment should not be plowed over because of an inconvenient political storm,” said Bradley A. Smith, CCP’s chairman and a former FEC chairman. “This is a cynical attempt to brush aside constitutional concerns because of a short-term perception of partisan gain.”
“This bill has new FEC and SEC regulations—all designed to restrict political speech,” said CCP vice president Steve Hoersting, who testified on these proposals at last week’s Senate Rules Committee hearing. “Those wondering what this exercise is all about need look no further than the sponsor’s statement that while the Courts may not ultimately approve these measures, ‘[they] will be in effect for the 2010 elections.‘”
“Any legislative attempt to dismantle the Court’s ruling in Citizens United must be narrowly tailored and backed up by evidence of a compelling government interest,” said CCP president Sean Parnell, who testified at a House Judiciary subcommittee hearing last week on the proposals. “This rush to ram a bill through before such a record could possibly be established does neither.”
Van Hollen and Schumer released a legislative framework Thursday, but the lawmakers did not release the text of their bill. Several questions remain about the constitutionality and policy intent of several planks of the proposal:
(1) Foreign involvement standard unworkable
The 20 percent shareholder threshold for defining a “foreign” corporation is unworkable in a global economy with publicly-traded companies. Existing law already sufficiently restricts any foreign involvement in expenditures, including foreign nationals providing advice regarding expenditures. This provision would only restrict the rights of U.S. nationals to associate for political involvement because of a non-controlling foreign shareholder.
GOVERNMENT CONTRACTORS AND TARP RESTRICTIONS
(2) Government contractor and TARP expenditure bans pose serious constitutional concerns
In Citizens United, the Supreme Court ruled that independent expenditures are not corrupting because-unlike direct contributions-they do not pose a quid pro quo risk of corruption. The only rationale for restricting government contractors’ spending is such a rejected government interest. It may be constitutionally permissible to restrict current TARP recipients or no-bid contractors, but restricting virtually all government contractors is not constitutionally sound. The government provides benefits to all sorts of people and groups-public employee unions, doctors, teachers, welfare and food stamp recipients, etc. The government cannot condition these benefits on giving up First Amendment rights.
LOWEST UNIT RATE
This proposal is an example of why campaign finance legislation written by members of Congress cannot avoid self-dealing. Lowest unit rates marginalize the speech of outside groups and favors candidates—especially incumbents. So, for example, Sen. Schumer could buy ads bashing ‘big banks’ or Industry X at the lowest unit rate, but an association or a company would have to pay the highest rate to respond to the ad. This poses obvious constitutional concerns related to Davis v. Federal Election Commission (2008). In Davis, the Supreme Court invalidated the “Millionaires’ Amendment” o
f McCain-Feingold, which allowed candidates looser contribution limits when facing an opponent spending a large amount of his or her own money.
(4) Corporate disclosure and SEC involvement
Corporate disclosure provisions may have some merit, but requiring a separate disclosure regime with the Securities and Exchange Commission potentially poses non-trivial burdens on speech (and equal protection concerns regarding union and nonprofit disclosure). This is designed to deter speech. Otherwise, lobbying spending should undergo the same requirements, as should research grants and charitable giving. After all, if shareholder protection is the standard and not keeping corporate voices out of politics, why not recommend shareholder notifications for grants, charitable gifts and lobbying?
(5) “Stand by your ad” restriction is a proven failure
“Stand by your ad” regulations were imposed by McCain-Feingold in a failed attempt to make political advertising less negative. Any requirement that a CEO (or also nonprofit and union heads) appear in a disclosure segment on the ad is a content restriction that limits issue discussion in the ad. A simple, “Paid for by corporation X,” should suffice.
(6) “Political broadcast account”
The bill apparently requires setting up “political broadcast accounts” to fund express advocacy ads, and requires disclosure of the source of the funds. One of the main findings of Citizens United was that incorporated entities were able to use general treasury funds for express advocacy. The Supreme Court specifically addressed the claim that requiring corporations to create separate accounts with separate regulatory frameworks was an unconstitutional burden on speech (PACs did not suffice because they’re functionally available only to large corporations and cannot be set up quickly enough to respond effectively to new political developments).
Note: this release has been updated from its original version to add content.