ACS panel features strong supporters of free political speech

ACSevent02242010

The American Constitution Society, the leading liberal legal organization, hosted a remarkable and informative panel on the impact of Citizens United v. Federal Election Commission today at the National Press Club in Washington, D.C.

Notably, the panel included four defenders of the Court’s majority opinion (in whole or in part) who spoke from a real-word perspective: experience as campaign finance lawyers, FEC staffers and congressional committee aides. The First Amendment Four—Jan Baran of Wiley Rein; Laurence Gold of AFL-CIO and Lichtman, Trister & Ross; James Portnoy of Kraft Foods and Joseph Sandler of Sandler, Reiff & Young—dominated the discussion by explaining why the Supreme Court affirmed long-standing First Amendment jurisprudence in Citizens United and why the decision will not lead citizens like lemmings off a cliff onto a rock-bed of corporate-controlled politics.

The lone reformer on the panel, Monica Youn of the Brennan Center, toned down the group’s typical hyperbolic comments (see her testimony at this month’s House Judiciary Subcommittee hearing on Citizens United) for the more nuanced and thoughtful discussion with campaign finance practicioners.

Youn nonetheless referred to the Citizens United decision as extreme because it did not balance the First Amendment rights of the electorate with the rights of speakers in campaigns. The Court only considered the rights of one side, she said. She also criticized the Court for not considering the real-world political implications of its ruling and for holding a “naive” understanding of corruption in politics.

Her most salient point was that the Court was wrong to reject the government’s argument that independent expenditures could raise the risk of corruption because the Court did not allow the development of a factual record. She accused the Court of acting on “little more than their own gut instinct” and criticized the majority’s “profound skepticism about the goals of reform”-namely that the Court should examine campaign finance laws with strict scrutiny because Congress has shown a penchant for silencing its critics and favoring incubments in its “reforms.”

She backed down from rhetoric about the favorite whipping corporation of reformers—Exxon Mobil—spending tens of billions on political advocacy and concluded by predicting that the main threat to democracy from Citizens United is the “slow normalization of corporate electioneering.”

The next four panelists proceeded to shred her arguments—with varying degrees of agreement over the impact and wisdom of the Citizens United Court.

Portnoy, Chief Counsel of Corporate & Government Affairs at Kraft, dressed down reformers for succumbing to “Chicken Little Syndrome” and seeking to infect the populace with its paranoia over the political ramifications of Citizens United. “I don’t really think the sky is falling,” said Portnoy, who worked as general counsel for the House Administration Committee Democrats and at the FEC.

Portnoy said the decision would not change the campaign finance landscape much for large, publicly-traded corporations like his employer, explaining that large corporations could already spend on politics in myriad ways. He mentioned that more than half of the states allowed corporate independent expenditures before Citizens United with no discernable difference in their electoral systems as a result. “You still, on balance, have pretty much the the same process,” he said.

He addressed the internal and external restraints on spending by large corporations—apart from government regulation—including a dearth of “extra money” in a recession, a lack of consensus among directors (and employers, customers and shareholders) about a political or partisan interest, and the efforts of “reform” groups to shame and criticize companies who engage in political spending. He also explained that “reform” criticism rests on a fundamental (perhaps intentionally?) misstatement of the political interests of corporations as monolithically partisan, explaining that most corporations do not adhere to a partisan framework and try to “play nice” with both parties—trending PAC donations toward those in power. Privately-held corporations and trade groups with strong ideological profiles are likely to be less risk averse and more political active, he said. “Death to business” issues, regulations that could cause a company to go out of business, might also prompt aggressive political action, he added. He explained, though, that corporate ads are likely to be more issue-focused than express advocacy-and corporations and unions have been able to engage in that sort of speech freely since the Court’s 2007 ruling in Federal Election Commission v. Wisconsin Right to Life (after McCain-Feingold restricted such speech in 2002).

Gold described the nuanced position the AFL-CIO took on Citizens United. It filed an amicus brief urging the Court to strike the broadcast timing bans of McCain-Feingold banning unions and corporations from running ads that even referred to a federal candidate 30 days before a primary and 60 days before a general election. The AFL-CIO did not ask the Court to overrule Austin v. Michigan Chamber of Commerce, Gold said.

Gold’s comments, though, were somewhat critical of the government’s defense of Austin. First, Gold acknowledged that the government abandoned the original rationale of Austin—that Congress could limit corporations, who accumulate vast amounts of wealth, from distorting political opinion—in favor of broadening the quid pro quo corruption rationale to independent speech. Since Buckley v. Valeo (1976) the Court has accepted the argument that direct contributions could cause quid pro quo corruption but the Court had never accepted that argument about independent expenditures outside of the Austin outlier.

Gold said he was “concerned about that notion” because it could restrict the right of unions to speak out about candidates independently. He described unions—though sometimes incorporated as 501(c)5 or (c)6 organizations—as democratic membership organizations distinct from for-profit corporations. Most unions are organized at the state or local level as unincorporated associations.

Sandler, former general counsel of the Democratic National Committee, spoke of Citizens United’s impact on nonprofit corporations and political parties. He said the next frontier in this legal front will be SpeechNow.org v. Federal Election Commission. The Center for Competitive Politics and the Institute for Justice are representing SpeechNow.org in its challenge to FEC regulations on independent groups; the case is now in the hands of the Court of Appeals for the D.C. Circuit.

Sandler said 501(c)4 corporations, social-welfare organizations registered with the IRS, may spend more money on politics after Citizens United, but express advocacy efforts cannot be their primary purpose under tax laws. The problem is that primary purpose is not clearly defined. 527s may spend corporate and union funds on broadcast advertisements near elections, which they could not do under McCain-Feingold provisions before Citizens United. These groups, however, risk regulation and audit from the FEC if the agency decides to investigate and deem an organization a federal political committee.

Federal political committee status brings criminal sanctions and other penalties for such activity that is permissable through other organizational forms like 501(c)4s and 527s, like accepting corporate and union treasury funds for express advocacy. Political committees must file more frequently with the IRS, submit to a stricter disclosure regime and submit to aribitrary and capricious FEC actions like audits and investigations. Sandler called the FEC’s “major purpose test” to determine whether an organization is a political committee “very vague.”

The next legal question, which SpeechNow.org may answer, is what the FEC’s power is to deem an organization a political committee and submit it to a maze of FEC regulations. The D.C. Circuit has already signaled that it is skepitical of the government’s argument—after Citizens United and EMILY’s List v. FEC—that it may restrict contributions to independent groups.

Meanwhile, Sandler said political parties—like the Republican and Democratic National Committees—face legitimate concerns about their relative importance after Citizens United, but they’re likely to retain prominence.

Observers predicted McCain-Feingold’s soft-money ban would destroy parties, but that hasn’t totally occurred, he said, and parties may still coordinate with candidates in a limited way, which is an important advantage. Parties also have a permanent infrastructure and and importance with the media and political cultures.

Baran, who authored a Citizens United amicus brief for the U.S. Chamber of Commerce, also said the Court’s decision will have a limited—but important—impact.

He said the decision has inflamed passions because it addresses a fundamental legal and political division about our democratic ideals. There’s a discord between those who would seek equality by leveling the playing field and/or silencing large groups because of a concern over influence and those who insist on the fundamental primacy of the First Amendment as a bulwark against government censorship of speech, no matter the organizational form of the speakers.

He said Citizens United returned the Supreme Court to the fundamental First Amendment political jurisprudence since Buckley after 35 years of attempts to chip away at Buckey‘s clear protections for independent speech. Attempts to impose further campaign finance restrictions are “now going to hit a brick wall.”

Baran challenged Youn’s main assertion that the Court should not have overruled Austin and McConnell v. Federal Election Commission without developing a factual record about the supposed corruptive possibilities of independent expenditures. He noted that the Chamber’s brief addressed exactly this question: why should it be the burden of speakers to prove their right to free speech and not the government to prove that independent expenditures are corrupting—especially since 26 states and the District of Columbia have long allowed unlimited independent speech by corporations (more allowed union speech)?

The government did not present any such evidence at original argument or at the cases reargument. Nor did any “reform” organizations find any compelling evidence in their numerous amicus briefs.

In the Q&A session and in her initial comments Youn misrepresented two supposed examples of how independent speech could cause corruption. One involved a situation in North Carolina where farmers trade group allegedly threatened a lawmaker by showing him negative ads that would air if he didn’t vote with their interests on a bill. Such an action would make the speech illegally coordinated, thus not an independent expenditure.

Youn also mentioned a recent independent expenditure in California, perhaps culled from today’s Los Angeles Times. She said that Intuit, the owner of TurboTax, spent $1 million supporting the opponent of a legislator who supported a free tax filing service for constituents. Setting aside the right of a corporation to speak out when the government threatens its business with a freely available competitor, Youn did not mention that unions supporting this lawmaker spent $3.5 million to bolster his campaign—and that he won. Where’s the corruption? The voters ultimately evaluate independent expenditures and make the final decision about a candidate.

Kudos to the American Constitution Society for organizing a fascinating discussion about the landscape of campaign finance laws after Citizens United. Tomorrow, I’ll post panel comments about congressional legislation in response to the decision.