Reformers’ lame campaign finance push

Lobbying organizations dedicated to curbing political speech rights today renewed an effort to convince Senators to vote for a third time on a modified version of the DISCLOSE Act, a misguided campaign finance bill.

It’s unclear if the Senate will vote on the DISCLOSE Act again in the already packed post-election session, but the updated version would reportedly strip out provisions of the bill that explicitly ban political advocacy.

“For months, self-styled reformers claimed that the DISCLOSE Act was simply about disclosure. Now, forced to strip out the most explicit speech prohibitions in the bill, they disingenuously insist what remains is ‘disclosure only,'” said Center for Competitive Politics Chairman Bradley A. Smith, a former FEC Chairman. “Nonetheless, groups spanning the political spectrum—from the ACLU to the U.S. Chamber of Commerce—have blasted the bill’s heavy-handed and poorly-drafted disclosure and disclaimer provisions as unconstitutional restrictions.”

Assuming Senate leaders simply remove the provisions of the DISCLOSE Act banning campaign expenditures of many government contractors and U.S. subsidiaries, the remaining disclosure and disclaimer provisions still substantially restrict and deter political speech.

“In unveiling the DISCLOSE Act, Sen. Chuck Schumer touted the fact that the excessive disclosure and disclaimer requirements would deter political speech,” said CCP President Sean Parnell. “Whatever cosmetic changes are being considered will not change the bill’s effective suppression of the voices ‘reform’ lobbyists wish to mute.”

The pro-regulation lobby often stresses part of the Supreme Court’s opinion endorsing disclosure in Citizens United v. Federal Election Commission, the January decision that lifted government prohibitions on the independent political speech of advocacy groups, businesses and unions. But the Court’s opinion merely reaffirmed past decisions highlighting certain benefits of disclosure. The Court has ruled in other cases that certain limits restrict the government’s ability to force private, independent groups to reveal their member and donor lists, and  the broad disclosure and disclaimer scheme in the DISCLOSE Act would be constitutionally suspect.

The drawbacks to onerous disclosure have long been noted by leading campaign finance experts: “Since few aspiring censors will admit openly to their purposes, the appeal to ‘disclosure’ has given them the moral authority, in public argument, that they need,” prominent Democratic lawyer Bob Bauer wrote on his now-defunct blog in 2007 (Bauer now serves as White House counsel; the administration supports the bill). “This is because ‘disclosure’ is a regulatory tool; it is meant to serve the government’s purposes, not only or even primarily those of individual citizens in need of information… This is a large part of disclosure’s work: to force outcomes, not principally to inform free voter choice.”

A detailed summary of the DISCLOSE Act (and an attached memo featuring extensive point-by-point analysis) explain why remaining provisions would still undermine political speech rights:

Analysis of the ‘DISCLOSE Act’ (S. 3628)

Senate leaders and pro-regulation groups have reportedly called for passage of the DISCLOSE Act without § 101 and 102 of Title I, which would have banned the political speech of government contractors and U.S. subsidiaries, respectively. Major remaining provisions would restrict political speech directly and indirectly.

Coordination regulations would censor grassroots legislative advocacy and expose independent groups to frivolous complaints [Title I]

§ 103: Coordination
The DISCLOSE Act would regulate a great deal of previously-protected issue advocacy as election-related speech subject to more stringent regulation and sweeping up grassroots advocacy on legislation months before elections. Congress has no basis to order the FEC to investigate coordination so broadly. Regulating grassroots lobbying ads as coordinated communications raises constitutional problems. For example, ads asking citizens to call and tell a Senator seeking reelection to oppose filibusters would be a covered communication under DISCLOSE, yet this is the same content that gave the Supreme Court pause in its 2007 Wisconsin Right to Life opinion. Such ads are “genuine issue advocacy,” not election advertising. Congress may not treat them as election-related advertising under the First Amendment. The bill would also unfairly regulate any republication of a candidate’s campaign materials as a contribution to that candidate’s campaign, whether or not the group actually coordinated the ad with candidate’s campaign.

§ 104: Party coordination
This section would make the standard for proving coordination extremely difficult between candidates and their party committees while leaving in place a far easier standard for proving coordination between candidates and outside groups. This provision is either a covert attempt to make it easier for party lawyers to file frivolous coordination complaints against independent groups or a ham-handed attempt to even the footing between parties and upstart groups. Instead, Congress should simply remove the McCain-Feingold restrictions on party coordination to allow parties to effectively coordinate with candidates (especially considering parties must raise regulated, limited funds, there’s virtually no legitimate argument that this could corrupt either parties or candidates).

Expanded definitions would radically redefine longstanding terms and burdensome disclosure and disclaimer provisions would deter political speech [Title II]

§ 201: Independent expenditures
DISCLOSE would define independent expenditures subject to reporting as including any speech that is “the functional equivalent of express advocacy,” ignoring Supreme Court precedents such as Buckley v. Valeo (1976) and FEC v. Wisconsin Right to Life (2007), known as WRTL II. In that case, the C
ourt held that to constitutionally regulate political speech, the communications must  meet both the definition of an electioneering communication (i.e., not be overly vague) and be “susceptible of no reasonable interpretation other than a call to vote for or against a particular candidate” (i.e., it could not be overly broad). The criteria that DISCLOSE would use to regulate independent expenditures is remarkably similar to the FEC’s regulation at 11 C.F.R. 100.22(b), which has repeatedly been held to be unconstitutionally vague by federal courts, and is no longer enforced. The Supreme Court has allowed the regulation not only of “express advocacy,” but also its functional equivalent.  However, the Court has insisted that any standard not be overly vague-it has used the term “functional equivalent” to describe non-vague standards that pass a constitutional test.  It has never suggested that the phrase “functional equivalent” itself somehow survived the vagueness concerns of Buckley

§ 202: Electioneering communications
DISCLOSE would dramatically expand the amount of regulated political speech by expanding the time frame for “electioneering communications.” BCRA, which relied on extensive congressional fact-findings, defined “electioneering communications” as limited to broadcast ads run 30 days before a primary or 60 days before a general election. DISCLOSE would significantly expand this limited window to cover ads mentioning a candidate from any time starting 120 days before the general election. Congress has established no record for the proposition that ads run 120 days-four months!-before the general election are not “true issue ads.” Indeed, the record of DISCLOSE includes puffy platitudes rather than any sort of factual or academic analysis.

§ 211-213: Expanded disclosure requirements
DISCLOSE would impose duplicative and vague disclosure burdens. Campaign finance law already requires the reporting of independent expenditures above $250 and contributions for the purpose of funding independent expenditures above $200. Similarly, expenditures of and contributions for electioneering communications over $1,000 must be disclosed. Furthermore, 527 organizations, regulated by the IRS, must disclose all contributions and expenditures of over $1,000.

Low disclosure thresholds threaten donors to controversial causes and grassroots groups
DISCLOSE would infringe on the rights of private association recognized by the Supreme Court in NAACP v. Alabama by threatening to disclose all donors to a group regardless of whether the donor intended to have their donation used for independent expenditures or electioneering communications. “Contributions of any size to political communications that are wholly independent of any candidate for office have not been shown to contribute to official corruption. Accordingly, disclosure of such donations serves no legitimate public purpose,” the American Civil Liberties Union recently explained in a letter opposing the DISCLOSE Act. “Unfortunately, the DISCLOSE Act would wipe away such donor anonymity—most notably, that of small donors to smaller and more controversial organizations, even when those donors have nothing to do with that organization’s political speech.”

Disclosure of transfers exempts unions
DISCLOSE would impose draconian disclosure burdens on donations made from one organization to another, including those not made with the intent of supporting independent expenditures. However, DISCLOSE would exempt many transfers among affiliate organizations, principally benefiting labor unions.

Unequal treatment of speakers: the ‘Shotgun Sellout’
DISCLOSE includes a “NRA exemption” that removes only a handful of large, well-established 501(c)(4) organizations from certain disclosure requirements. Exempting these favored groups from the burdensome disclosure requirements creates a two-tiered system of favored and disfavored speakers, and will only serve to hinder genuine grassroots and local political movements that lack access to expensive campaign finance attorneys. This provision is likely unconstitutional.

Separate fund option unworkable
The Citizens United decision reaffirmed the right of corporations and unions to engage in independent expenditures using general treasury funds. The intent of this legislation is to circumvent that ruling.  Lacking the ability to do so directly, it tries to stifle it as much as possible with a completely unworkable “separate fund” option. The legislative language allows for corporations and unions to set up separate accounts from which to make political expenditures and heavily regulates what must be disclosed from the money transferred to that fund. If a corporation chooses to accept this alternative, it must make expenditures from only that fund-forever. The result of this provision is to force corporations, including many tax-exempt organizations, to choose between two options that have each been found unconstitutional by the Supreme Court. These groups can either disclose all members and donors, a requirement that the Court ruled was unconstitutional in NAACP v. Alabama, or restrict political spending to a “Campaign-Related Activity Account,” a type of PAC and thus an impediment the Supreme Court held in Citizens United could not be constitutionally imposed on a group making independent expenditures.

§ 214: Disclaimer requirements
The DISCLOSE Act would impose disclaimer requirements on broadcast ads that would be comical were it not for the extreme burden on free speech imposed. The requirements could effectively cut in half the amount a group could say in a 30-second ad, demonstrating an extreme hostility to independent speech. [Again, large, nationally prominent 501(c)(4) groups such as the Sierra Club would be exempt].

Forced disclaimers by top donors amount to compelled speech
DISCLOSE would force a group’s leader to make a “Stand By Your Ad” (SBYA) statement. Current law already requires a verbal disclaimer for independent ads. No valid informational purpose would be served by replacing this simple disclaimer with two bulky disclaimers. The disclaimers would be “so burdensome they would either drown out the intended message or discourage groups from speaking out at all,” the ACLU noted. Citizens and organizations would be forced to engage in government-required speech, and a very real possibility exists that donors to organizations would be forced to state publically that they “approve” of a particular commercial when in fact they may have little interest or may even oppose the particular expenditure. This is because the bill does not limit identification of “major funders” to those who give or were solicited to support independent expenditures, but also includes persons or groups that give to an organization’s general treasury.

Harsh treatment of independent groups as compared to candidates
Unlike the voluntary SBYA disclaimers for candidates (which came with the incentive of lower ad rates) created by McCain-Feingold, the SBYA disclaimers in the DISCLOSE Act would be mandatory and would likely face constitutional challenge as government dictation of a speaker’s message.

DISCLOSE would hamper effective and prompt judicial review [Title IV]

§ 401: Judicial review
The judicial review rules proposed in the DISCLOSE Act fail to follow the precedent set in McCain-Feingold, which allowed for expedited review and shortened the time between the filing of a suit alleging that enforcement of the act was in violation of constitutional rights and a final judgment on the issue by the courts. Even with the expedited schedule for challenges to BCRA, many groups
were forced to wait years before having their right to speak vindicated by the courts. Citizens United, of course, wished to speak during the early part of 2008, but did not get a final ruling until January of 2010, well after the opportunity to speak had expired. The lack of expedited appeal, combined with jurisdictional requirements that make it difficult for smaller groups to challenge the Act, seem tailor-made for those seeking partisan advantage and facing potentially difficult election cycles in 2012 and beyond.

The Center for Competitive Politics is a nonpartisan, nonprofit group dedicated to protecting First Amendment political rights. CCP seeks to promote the political marketplace of ideas through research, litigation and advocacy.