In the News
The Hill: Dark money still a bit player
By Luke WachobWhat would you call an election in which over 95 percent of campaign spending is funded by groups that publicly disclose the names and addresses of their donors to the Federal Election Commission, along with information on donors’ employers and occupations?The Huffington Post’s Paul Blumenthal calls it “the dark money election.” The Center for Responsive Politics, which tracks political contributions and spending,writes in The Daily Beast that “the 2014 election cycle is on track to be the darkest election in recent history.”Hyperbolic coverage of so-called “dark money” is nothing new, but the latest claims are beyond absurd. In fact, there is more disclosure today than ever in our nation’s history. The reason “dark money” is on the rise is because all political spending is on the rise. Campaigns are still dominated by entities that fully disclose donors such as candidates, political parties, political action committees (PACs), and independent expenditure-only committees (Super PACs).These entities have spent over $1.7 billion on federal races so far this cycle, according to data from the Center for Responsive Politics ($799 million by candidates, $588 million by parties, and roughly $357 million by independent spenders, such as 527s and Super PACs). So-called “dark money” – which stands at around $75 million – comprises just 4.3 percent of all campaign spending.
Law & Politics Update: In Independence Institute, a Pro-Disclosure Decision—But With No Disclosure to Follow
By Brian SvobodaIn Independence Institute, the district court was emphatic that neither Wisconsin Right to Life nor Citizens Unitedprovided any basis to curtail disclosure. The district court said that Wisconsin Right to Life involved only “the regulation of expenditures,” not “the disclosure requirements,” and that Citizens United“squarely foreclosed” any effort to narrow disclosure. The unavoidable implication of the district court’s opinion is that the FEC’s current rules are contrary to law, insofar as the agency adopted them in response to Wisconsin Right to Life. But this logic puts the district court at loggerheads with the D.C. Circuit’s opinion two years ago in Center for Individual Freedom v. Van Hollen—which the district court neither discussed nor even cited. In Van Hollen, the D.C. Circuit rejected a challenge to the FEC’s rollback of the disclosure rules, saying: “The statute is anything but clear, especially when viewed in the light of the Supreme Court’s decisions in Citizens United … and Wis. Right to Life, Inc. …” The D.C. Circuit remanded Van Hollen to the FEC, but rebuffed the challenge to the narrower disclosure rules, because they were “an attempt by the agency to provide regulatory guidance under the BCRA following the partial invalidation of the speech prohibition imposed on corporations and labor unions in the context of ‘electioneering communications.’”Thus, Independence Institute may prove to be a glass half-empty for disclosure proponents, much like the D.C. Circuit’s recent opinion in Stop This Insanity Inc. Employee Leadership Fund v. FEC was. The district court upheld the agency with a full-throated defense of the constitutionality of disclosure requirements. But it teed the issue up for decision by a D.C. Circuit that may prove more skeptical, even while Congress and the FEC each remains at an impasse over disclosure policy. And the district court’s opinion may be vulnerable to review, while securing no additional disclosure in the meantime.
Bloomberg: New Super-PAC Takes Midterm Lead for Kochs
By Annie LinskeyBy shifting ad spending to a super-PAC, the Kochs won’t need to worry about whether the IRS decides to amend disclosure rules, impose new limits on campaign-related activities or if any of the ongoing legal battles trigger changes. “All these groups have to consider what that IRS might construe as political,” said David Keating, the president of the Center for Competitive Politics, a conservative organization that is challenging campaign finance regulations.
CCP
Constitutional Issues with Rule Proposed by Texas Ethics Commission August 21, 2014
By Anna MackinThe definition of “principal purpose” has significant implications under Texas law. State law defines “political committee” as “a group of persons that has as a principal purpose accepting political contributions or making political expenditures.”[2] Thus, a principal purpose finding triggers political committee status—and the attendant requirements to appoint a treasurer,[3] keep detailed records,[4] and submit comprehensive reports to the State.[5] It also subjects persons who inadvertently misreport this information to misdemeanor[6] and civil liability up to three times the amount not reported.[7] These are non-trivial burdens upon expressive and associative activity that the First Amendment protects, and are all triggered by a “principal purpose” finding.The Proposed Rules are problematic because they adopt a reading of this operative phrase— “principal purpose”—that is both novel and unconstitutional. The phrase appears not only in Texas campaign finance law, but also in federal law and the laws of other states. As such, “principal purpose” is a term of art in the campaign finance context. It is a trigger designed to limit burdensome political committee regulation to entities that dedicate a sufficient quantity of their activity to making contributions or expenditures. The Supreme Court and federal appellate courts have held that any regime not so limited unconstitutionally burdens First Amendment activity.Nevertheless, the Proposed Rules read the word “a” in the phrase “a principal purpose” to suggest an impermissibly low threshold of activity for triggering political committee status. In addition to bucking controlling authority, this reading violates the principal of statutory construction that statutes are to be interpreted on their face, in accordance with their plain meaning. According to Ballantine’s Law Dictionary, “principal” means “[o]f first importance. In the first rank.” The Law Dictionary defines “principal” similarly—“the leading, or most important; the original.” But with a 25% threshold,[8]the Proposed Rules do not require that political contributions or expenditures in fact be “the leading” purpose of an entity before it is subject to regulation as a political committee.
Independent Groups
New Yorker: Embrace the Irony
By Evan Osnos
Last spring, Lawrence Lessig, a fifty-three-year-old Harvard legal theorist who opposes the influence of money in politics, launched a counterintuitive experiment: the Mayday PAC, a political-action committee that would spend millions of dollars in an attempt to elect congressional candidates who are intent on passing campaign-finance reform—and to defeat those who are not. It was a super PAC designed to drive its own species into extinction. Lessig adopted the motto “Embrace the irony.”
Argus Leader: GOP demands Super PAC stop ad
By Jonathan Ellis“We call upon them to stop airing their TV spots,” Lawrence said. “Let this campaign return to truth and the issues.”Lawrence also made a thundering attack against Every Voice, which he accused of concocting the ad during a Washington, D.C. martini party to fool South Dakotans.“This is about as vicious as you’re going to see it get,” he said. “I say to Every Voice Action, you are cowards.”
Washington Post (LTE): No relationship between money and a healthy political system
By Ann ScoffierBoth parties raise and spend obscene amounts of money on elections — more than should be necessary to carry out effective, well-targeted campaigns. Both parties have billionaire funders. I don’t approve of very few people or groups funding anyone’s party or cause. There’s no causal relationship between money and a healthy political system. Despite the deluge of money, voter turnout remains low. The party bases do not engage with each other, inhabiting instead strident echo chambers of their own opinions and biases. Perhaps saddest of all, candidates and officials avoid taking a clear stand on critical issues until after elections.Conflating adversarial fundraising with elective politics will turn out to be counterproductive. Winning periodic fundraising battles has contributed little or nothing to political debate or voter participation.
SCOTUS/Judiciary
Courthouse News: 10th Circuit Fuzzy on Colorado Election Law
By Megan Gallegos
Citizens’ attorney Theodore Olson also said it is not clear what the statute says.“These statutorial regulations are vague,” Olson said. “What counsel says today may be different from what counsel says tomorrow.”With the questions hanging in the air, Judge Philips said the panel will have a decision soon.
Disclosure
Roll Call: How to Approve That Political Message
By Abby LivingstonTypically, campaigns tack the disclaimer to the beginning or end of an ad. That gets it out of the way, but the problem is viewers don’t often understand why the candidate is approving his or her own message.“I’ve been in enough focus groups that when you play an ad, … they laugh” at the disclaimer, Adelstein said.He said focus group participants react with comments like, “Duh. Why do you have to tell me that, idiot politician?”“Voters don’t get it,” he said. “They think it’s stupid.”
Candidates, Politicians, Campaigns, and Parties
The Hill: House Dems: We’ve been abandoned
By Jessica Taylor and Alexandra JaffeThe Service Employees International Union (SEIU) spent $8.3 million in 2012 to help House Democrats, but has only spent $181,500 in independent expenditures on House races this year.The American Federation of State, County and Municipal Employees (Afscme) also pitched in $6.3 million two years ago, but has only spent $612,000 to help House candidates so far in this cycle.
AP: Obama raising money for Dems in private, but keeping his distance from the campaign trail
By Josh LedermanNEW YORK — President Barack Obama opened a weeklong fundraising spree for his party Tuesday, telling high-dollar donors in New York and Connecticut that Democrats have facts and history on their side. Yet there still were no signs that Obama planned to take that message directly to voters by appearing on the campaign trail with his party’s candidates.Even while he raises money in private homes from coast to coast, Obama’s public campaign schedule is getting off to a late start. Although the White House says Obama will start appearing with candidates as early as next week, no events have been announced.
NY Times: Secretly Buying Access to a Governor
EditorialAddicted to each other’s power and money, the political parties and their corporate donors are constantly trying to enlarge their relationship out of sight of the American public. An accidental Internet disclosure last month showed that the stealthy form of political corruption known as “dark money” now fully permeates governor’s offices around the country, allowing corporations to push past legal barriers and gather enormous influence.This has been going on nationally for several years, of course, after wealthy interests claimed that a series of legal decisions allowed them to give unlimited and undisclosed amounts to “social welfare” groups that pretended not to engage in politics. (The tax code prohibits these groups from having politics as a primary purpose.) Now it turns out that both the Republican and Democratic governors’ associations have also set up social welfare groups — known in the tax code as 501(c)(4) associations — with the purpose of raising secret political money.
FEC
More Soft Money Hard Law: Movement at the Federal Election Commission
By Bob BauerIn a letter sent to the Federal Election Commission yesterday, individuals who have experience with the FEC applauded the move toward a rulemaking to conform the rules to recent Supreme Court decisions, and urged more of the same, in a similar spirit of putting the regulatory house in order. (I am one of the signatories).The FEC is followed closely only when it is contending with the most difficult, most divisive issues. It is blamed for much of what makes critics unhappy with the law when there are major contributing factors—like changes in constitutional jurisprudence—that the agency can do little about. But in the meantime, the agency is charged with implementing the core requirements—limits, prohibitions and disclosure requirements—which courts have upheld. How it does this job matters, and it should matter to both proponents and opponents of more extensive regulation.
State and Local
California –– Reuters: Trailing in polls, California candidate offers scholarships, gift cards
By Sharon Bernstein“Candidates spend money to reach the voters and get support and that’s what he’s doing,” said Jessica Levinson, a professor at Loyola Law School in Los Angeles. “It’s just more in your face than what we typically see.”On Tuesday, Kashkari awarded scholarships in the amounts of $25,000, $10,000 and $5,0000 to students who competed to make campaign videos for him.Last month, he gave gas station gift cards at a campaign rally against Brown’s proposal to build high-speed rail in California. The first 100 people to come and smash a toy train in symbolic opposition to the project received cards worth $25.
