In the News
More Soft Money Hard Law: Complex Rules and the Choice of Enforcement Model
By Bob BauerLarry Lessig’s PAC has run into regulatory difficulties, apparently botching compliance with disclaimer requirements, and the Center for Competitive Politics decided to make an example of him by filing a complaint with the FEC. Example of what? That those advocating for regulated politics should sample the fare they are urging on others and experience the same indigestion. In the Wall Street Journal, Scott Blackburn of the CCP has suggested that the moral of the tale was the need for more “sensible” campaign finance laws.A law can be “sensible” in several ways— well structured for its intended purpose, or limited in volume and complexity. Mr. Blackburn has the second meaning in mind: fewer rules and a diminished chance of mishaps like the one Mayday has experienced.But it is fair to say that any significant regulatory project is hard to carry off without a measure of complexity. The charge of the campaign finance laws is to prevent corruption and its appearance, and if the rules to do this work are to have an effect, they will be written reasonably comprehensively. The result will be a fair degree of “complexity”. Often the intricacy arises from the requirements of constructing constitutional rules. The Commission solicitation rules are an example: they are convoluted because a ban on solicitations is a restriction on speech, and exceptions had to be incorporated into the rules to meet First Amendment requirements.
CCP
Independence Institute v. Gessler: Opening Brief (10th Circuit)
As a § 501(c)(3) organization, the Institute is barred from intervening in candidate campaigns for elective office. 26 U.S.C. § 501(c)(3) (prohibiting educational nonprofits from “participat[ion] in, or interven[tion] in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office”). As a result of its status, the Institute’s donors may not be publicly revealed. 26 U.S.C. § 6104(d)(3)(A). In fact, ordinarily, a state official who publicly revealed the Institute’s donors would face substantial criminal penalties. 26 U.S.C. § 7213(a)(2) (“felony punishable by a fine in any amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the cost of prosecution”).
Independent Groups
Wall Street Journal: A Supreme Speech Opportunity
EditorialIn a July 2014 ruling upholding Vermont’s campaign-finance law, the Second Circuit Court of Appeals did not apply the major purpose test. The appellate court also ruled that Vermont Right to Life’s Fund for Independent Political Expenditures could not be considered separate from its affiliated group the Vermont Right to Life Political Committee, which does make donations to political candidates. The judges then offered a legislative-like checklist of what nonprofit groups should avoid to dodge onerous regulation, including sharing staff, coordinating on projects or getting advice from common sources with affiliated political committees.If that test holds, an awful lot of nonprofit operations are in trouble. Groups that maintain both 501(c)(3) and 501(c)(4) arms have been around for decades and are a common arrangement. The kind of “coordination” going on between the two branches of Vermont Right to Life is no different than the ordinary operations of countless groups like the Sierra Club where, for example, environmental conservation and political advocacy are housed under the same roof.
Campaign Finance
Wall Street Journal (LTE): Raise Thresholds, Help Democracy
By Robert LenhardThere is a simple answer to the problem raised in your editorial of how rules limiting political donations trap the little guy (“Campaign-Finance Bondage,” Jan. 2). It is one that regulators at the federal level have been asking Congress to adopt for years: Raise the monetary threshold at which a group must register as a political committee to avoid capturing the little guys depicted in the editorial.
Lobbying and Ethics
Politico: K Street won’t get blank check on Hill
By Anna PalmerNow, the D.C. hired guns are warning their clients that they won’t get to cash a blank check with the new GOP leaders — telling them to be realistic about what House Speaker John Boehner and Senate Majority Leader Mitch McConnell can accomplish over the next two years with President Barack Obama still in office.“We’re trying to be practical with them and say, ‘Look, this is not going to be easy,’” said former Sen. John Breaux (D-La.), who now co-leads Squire Patton Boggs’ government affairs practice, about conversations with clients, whom Breaux advises on everything from the airline industry to telecom to financial services.
USA Today: House edits rules to help members facing ethics probes
By Paul SingerThe new language, added Monday night to the sections that establish the House Ethics Committee and the independent Office of Congressional Ethics, says the two bodies “may not take any action that would deny any person any right or protection provided under the Constitution of the United States.”The language also states that a person subject to a review by the Office of Congressional Ethics “shall be informed of the right to be represented by counsel and invoking that right should not be held negatively against them.”The OCE, created in 2008 by the then-new Democratic House majority, reviews ethics matters and refers cases to the Ethics Committee for adjudication, with a recommended course of action. It has proven wildly unpopular among lawmakers in both parties, in part because the OCE’s reviews and recommendations become public even if the Ethics Committee concludes that the lawmaker did nothing wrong.
State and Local
Kansas –– AP: Grand jury investigating loans to Kansas governor’s campaign
WICHITA, Kan. — A federal grand jury is looking into loans made to Kansas Gov. Sam Brownback’s re-election campaign and has ordered the state’s ethics chief to testify next week as part of its investigation, according to a subpoena obtained by The Associated Press.Carol Williams, the executive director of the Kansas Governmental Ethics Commission, was summoned to appear before the grand jury Wednesday in Topeka, according to documents the AP obtained through an open records request. She also was ordered to provide documents pertaining to loans Brownback’s campaign received in 2013 and 2014.
Texas –– Houston Chronicle: Panel wants light shined on donors
By David S. RaufLabeling so-called dark money spending a corrupting force in the democratic process, the House Committee on State Affairs issued a set of recommendations after Speaker Joe Straus, R-San Antonio, directed the panel a year ago to dive into the topic during the interim.Strauss and his lieutenants have been frequent targets of the state’s highest-spending politically active 501(c)(4), Empower Texas.Nonprofits established under Internal Revenue Code section 501(c)(4) currently are allowed to spend money to influence elections but do not have to reveal who is funding the efforts. The groups have argued their donor lists are constitutionally protected.
