[EL] Fwd: BREAKING: A Landmark Victory - Court rules for free speech in Carey v FEC

Wed Jun 15 14:04:03 PDT 2011

Joe asks:

I wonder: if the *Carey *court had considered the limits on contributions to
candidates (which the plaintiff[s] did not challenge), what level of
scrutiny would it have applied?

There is every reason to believe that, if confronted with the question
directly, Judge Collyer would have fallen back on the level of scrutiny
discussed first in *Buckley* and later in *Shrink PAC* for contributions to
candidates.  She then would have applied that level of scrutiny to
contributions to organizations that, in turn, convert the funds to
contributions to candidates (or to political party committees controlled by
or comprised of candidates).

Steve Hoersting

On Wed, Jun 15, 2011 at 4:46 PM, Joe La Rue <joseph.e.larue at gmail.com>wrote:

> The *Carey *court applied strict scrutiny to the limit on contributions to
> independent expenditure committees. *Long Beach* and *Thalheimer *(9th
> Cir), as well as *SpeechNow* (D.C. Cir.) all failed to reach the question
> of the proper level of scrutiny for such contributions. Applying strict
> scrutiny isn't really surprising, though, since limits on contributions to
> IE committees serve functionally as limits on the expenditures themselves.
> Because limits on independent expenditures are subject to strict scrutiny,
> it makes sense that limits on contributions to committees making IEs would
> be subject to strict scrutiny also.
>
> What is more interesting to me, though, is the court's dicta that can be
> read to mean that strict scrutiny is the proper level for evaluating *all
> *limits on contributions, including those made to candidates. On page 8
> the court explained that *Citizens United* ruled that burdens on speech
> are subject to strict scrutiny, then on page 9 noted the Supreme Court has
> ruled that contributions are speech. I wonder: if the *Carey *court had
> considered the limits on contributions to candidates (which the plaintiff
> did not challenge), what level of scrutiny would it have applied? Its dicta
> can be read to indicate that it may well have applied strict.
>
> Joe
> ___________________
> Joseph E. La Rue, Esq.
> 812-232-2434, ext. 25 (Office)
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> On Wed, Jun 15, 2011 at 2:38 PM, Rick Hasen <rhasen at law.uci.edu> wrote:
>
>>
>>
>> -------- Original Message --------  Subject: BREAKING: A Landmark Victory
>> - Court rules for free speech in Carey v FEC  Date: Wed, 15 Jun 2011
>> 10:54:14 -0700  From: DB Capitol Strategies
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>> The S T R A T E G I S T
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>> *June 2011 - BREAKING NEWS*
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>> *
>>
>> BREAKING: DC Judge issues landmark ruling that a PAC may accept BOTH
>> unlimited contributions for IEs & (limited) contributions for direct
>> candidate support.
>>
>>
>> *
>>
>> In a decisive victory for Free Speech that will empower grassroots
>> activists nationwide, the U.S. District Court for the District of Columbia
>> late yesterday issued a Preliminary Injunction in Carey v FEC.  *The door
>> is now open  for non-connected PACs to accept BOTH amount & source-limited
>> contributions to be used to directly support candidates and also accept
>> UNLIMITED CONTRIBUTIONS for use in Independent Expenditures (and PAC
>> operating costs).*
>>
>>
>>
>> The Court issued a Preliminary Injunction, order & memo HERE<http://r20.rs6.net/tn.jsp?llr=pazqtmdab&et=1106008427914&s=4227&e=0012kw4okRRl9O8W5LaarKCnQ111cTehbveyfEmU5_R1_M_Yz0sQOykds3zOBsp5Hr_h8tlv1pWmX92LFgDWwJv-o26PjC-f1mTupLTN3hJuxazcygvNbPZaFB4Zoyei6gJMRX7v_nMD3ezlZkCqYoSjwQ7PflNHihwnWLb7MLegN09JfSpqqrPm55J9ychmdc_ZDI8C9JiWfY=>,
>> sought by DB Capitol Strategies for its clients, Rear Admiral [Ret.]
>> James J. Carey, One Nation PAC Executive Director Kelly Eustis, and the National
>> Defense PAC.  The Court ordered that so long as contributions for each
>> activity - IE's and direct contributions - are segregated into separate bank
>> accounts, and the latter account is subject to amount and source limits, the
>> FEC may not enforce amount and source limits on funds contributed for IE's.
>> The Court harshly assailed the efforts of the FEC to curtail free speech and
>> made it clear that the approach argued for by DB Capitol Strategies would
>> likely prevail.
>>
>>
>>
>> Joining DB Capitol Strategies' Dan Backer as Co-Counsel are distinguished
>> election lawyers and first amendment scholars Benjamin T. Barr and Stephen
>> M. Hoersting. On April 26, 2011, The Center for Competitive Politics (CCP)
>> joined as co-counsel as well.  For more information on each, CLICK HERE<http://r20.rs6.net/tn.jsp?llr=pazqtmdab&et=1106008427914&s=4227&e=0012kw4okRRl9MGgsKR223iMmPZN7d62LcECHn5SpdL0gw5_Eif1DQbCRExEruIYK4ihAhjoqMmRsEp-1qb67-7wIYCaXG68Kreojf6mcqtSyYMFzZEf061qMxQdmSG2sUagb4OP6FAY7Ic41EyP5hPrg==>
>>
>>
>>
>> CCP's press release (HERE<http://r20.rs6.net/tn.jsp?llr=pazqtmdab&et=1106008427914&s=4227&e=0012kw4okRRl9NnjR73jDTCXrbLBwkpOQMUmvEG4Qx6oKhtUa92dry0xWR58WKiL7aUFPM5eKvwIQwCrmWHV2gUrUUet4Gy8wLs-TXy9nCiUjXlnrMpsXcPuOHW-EYyHbwhh9yu60NID2iI5cPTujggdZaitn7wzhmbogvxX7vR4-ZXw-yRo_SuzvKmVFp5tpuZ8Fhlz88Hbl4=>) on
>> the ruling includes this quote by Dan Backer of DB Capitol Strategies: "*I
>> applaud this Court's strong rebuke of the FEC's rough-shod suppression of
>> the free speech rights of grassroots activists, organizers, and everyday
>> Americans.  **Political speech is a fundamental right, not some privilege
>> accorded at the whim & mercy of the FEC, and this ruling ensures that
>> citizens enjoy the same political speech capabilities as well-funded
>> corporate & union interests.*"
>>
>> * *
>> *An immediate note of caution.  *While a significant ruling, the scope of
>> this ruling is still limited to the case at hand.  PACs & their
>> contributors should wait until a more definitive ruling - in the form of a
>> forthcoming & very likely successful motion for summary judgment - before
>> actually engaging in these activities.  While the Court expressly stated
>> that NDPAC was likely to succeed on its merits - and the tone of the ruling
>> left little doubt that it would - it is better to be safe than sorry.  PACs
>> can begin laying the foundation now to take full advantage of this ruling,
>> and be ready to move quickly once a broader, definitive judgment is had.
>> *What follows is a prospective analysis looking ahead to the impact of a
>> successful Motion for Summary Judgment.*
>>
>> *Beyond IE's*
>>
>>
>>
>> The language of this ruling lays the foundation for another outcome - that
>> contributions for other PAC activities beyond direct candidate contributions
>> will also be exempt from amount and source limitations.  For example, Get
>> Out The Vote (GOTV) activities, voter registration drives, and more.  Look
>> for more action in this arena soon.
>>
>>
>>
>> *DB Capitol Strategies **and Dan Backer, Esq.*
>>
>>
>>
>> DB Capitol Strategies PLLC offers legal, strategic & operational guidance
>> to political activists with a focus on PAC treasury and FEC reporting and
>> compliance.  Its principal attorney is Dan Backer, a graduate of the
>> University of Massachusetts Amherst and George Mason University School of
>> Law.  In 2009, Mr. Backer earned the Professional Lobbying Certification
>> (PLC) from the American League of Lobbyists.
>>
>>
>>
>> Mr. Backer is admitted to practice law in Virginia & Washington DC, and
>> before the U.S. District Courts for the Eastern & Western Districts of
>> Virginia and DC.  Mr. Backer has broad experience with public policy,
>> advocacy, and grassroots programs, and is Treasurer or Asst. Treasurer of
>> several PACs.
>>
>>
>>
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>>
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>>
>> *202-478-0750 fax*
>>
>>      *Effect on non-connected Grassroots PACs*
>>
>>
>>
>> The greatest beneficiaries of this outcome will be grassroots,
>> issue-oriented, non-connected PACs - "Citizens PACs" - that will now have
>> the same political capabilities as corporations and trade associations to
>> impact the national political debate.  Citizens PACs have been limited to
>> raising only $5000 per year from contributors, from which they have had to
>> pay all their operating costs - until now a major disadvantage.  By
>> contrast, the "Connected PACs" of corporations and associations are able to
>> use their own treasury dollars to fully support PAC operating costs - often
>> spending more to run the PAC and raise funds to contribute to candidates
>> than they actually raise.Citizens PACs will now be able to use unlimited
>> individual & business contributions (from small business owners &
>> entrepreneurs among others) to support Independent Expenditures and,
>> critically, use these funds to offset a reasonable portion of their
>> administrative costs.
>>
>> * *
>> *
>> Effect on Independent Expenditure only PACs
>>
>>
>> *
>>
>> Functionally, there is no longer any rationale for the existence of an
>> IE-only PAC (so called "super-PACs"), whose FEC Statements of Organization
>> include specific language that they will not make contributions to
>> candidates.  While likely unenforceable, wise counsel would be to remove the
>> restriction.  As a result, look for a wave of existing Super-PACs amending
>> their FEC Statements of Organization to become "regular" non-connected PACs.
>>
>>
>>
>> While some pundits have dubbed the possible outcome of success in Carey v
>> FEC as creating "super-duper PACs", the actual outcome is to enhance the
>> capabilities of all non-connected PACs without distinction.  The "Super-PAC"
>> moniker may soon disappear.
>>      *Effect on connected PACs*
>>
>>
>>
>> In the wake of Citizens United, corporations, unions, and membership or
>> trade associations were already empowered to spend unlimited treasury funds
>> on IE's apart from their ability to pay all the operating costs of their
>> "Connected PAC".  On its face, a victory in Carey v FEC has little
>> impact, though it's conceivable that some entities may prefer to contribute
>> funds to their PAC and have the PAC conduct IE's rather than the
>> organization itself, or that some large individual contributors from the
>> restricted class may increase their contributions for IEs and related
>> activities.
>>
>>
>>
>> A more interesting question is whether to have a Connected PAC at all, and
>> whether to "disconnect" the PAC so it could solicit contributions beyond the
>> restricted class.  Corporations, for exanmple, could solicit all
>> employees (including union employees), vendors, customers, and the public at
>> large.  Unions and membership/trade associations would similarly be able
>> to solicit beyond their own membership.  A formerly connected
>> organization could still contribute treasury funds towards the IE's of the
>> disconnected PAC, which could support a significant portion of the operating
>> costs.  On the flip side, the operating costs of connected PACs
>> (principally staff salaries) are generally treated as business expenses by
>> the connected organization - a tax benefit that would be lost if
>> contributing directly.
>>
>>
>>
>> The impact of Carey v FEC raises a number of questions for Connected
>> PACs.  Would a larger fundraising audience compensate for lost operating
>> cost support and changed tax treatment?  Would payroll deduction still be
>> permissible?  How would other use of connected organization resources be
>> treated?  *Now is the time to seek guidance to these questions in advance
>> of a Summary Judgment in Carey v FEC.*
>>
>>
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