[EL] Fortune 500 election-related contributions
Rick Hasen
rhasen at law.uci.edu
Mon Jul 9 12:07:39 PDT 2012
If a corporation gave money to a c4, and that c4 (or 527) had the major
purpose of influencing federal elections (and therefore should have
registered as a political committee), then the contribution to the c4
(or 527) would be an illegal corporate contribution to a PAC. So it was
fraught with legal uncertainty.
As I point out here
<http://www.slate.com/articles/news_and_politics/politics/2012/03/the_supreme_court_s_citizens_united_decision_has_led_to_an_explosion_of_campaign_spending_.html>,
the same was true of individual contributions above $5,000 to 527s
before the CU blessing:
It is true that before /Citizens United/ people could spend
unlimited sums on independent advertising directly supporting or
opposing candidates. But that money had to be spent by the
individual directly. It could not be given to a political action
committee, which had an individual contribution cap of $5,000 and
could not take corporate or union funding. In many cases, wealthy
individuals did not want to spend their own money on advertising,
which would say "Paid for by Sheldon Adelson" or "Paid for by George
Soros," so fewer of these ads were made. The only way to avoid
having your name plastered across every ad was to give to the 527s,
which claimed they could take unlimited money from individuals
(including, sometimes, corporate and labor union money) on grounds
that they were not PACs under the FEC's definition of PACs. These
organizations were somewhat successful, but a legal cloud always
hung over them. During the 2008 Democratic primary season, Bob
Bauer, candidate Obama's lawyer, barged in on a pro-Hillary Clinton
conference call <http://electionlawblog.org/archives/010292.html> to
say that people giving to 527s to support Clinton could face
criminal liability.
After /Citizens United/, the courts (most importantly in
/Speechnow.org v. FEC
<http://scholar.google.com/scholar_case?case=7706190082269594272&hl=en&as_sdt=2&as_vis=1&oi=scholarr>/)
and the FEC provided a green light for super PACs to collect
unlimited sums from individuals, labor unions, and corporations for
unlimited independent spending. The theory was that, per /Citizens
United/, if independent spending cannot corrupt, then contributions
to fund independent spending cannot corrupt either. (I
am quitecritical
<http://www.cnn.com/2012/01/09/opinion/hasen-super-pacs/index.html?eref=rss_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20rss%2Fcnn_topstories%20%28RSS%3A%20Top%20Stories%29>
of this theory about corruption
<http://www.slate.com/articles/news_and_politics/politics/2012/02/justice_ruth_bader_ginsburg_is_ready_to_speak_out_on_the_danger_of_super_pacs_.html>,
but that's besides the point here.) So what was once of questionable
legality before the court's decision was fully blessed after
/Citizens United/.
On 7/9/2012 12:01 PM, Marty Lederman wrote:
> I see. I think. Is this right?: Because WRtL was nominally only a
> statutory construction decision, then in the period between WRtL and
> CU, if a corporation wanted to spend treasury funds for /non-/express
> advocacy -- the only kind of advocacy anyone actually wants to use
> these days -- it could freely do so in its own name, or by funding a
> (c)(4) not registered with the FEC. But it could not, pre-CU, achieve
> the same thing by funding an FEC-registered committee (which it might
> prefer to do . . . why? less disclosure than w/r/t committees that
> are not FEC-registered?).
>
> If this is correct -- and please forgive me if I still have it wrong
> -- then the "floodgate" CU opened, over and above what was permitted
> by WRTL, was to allow treasury funds to be used to fund
> /FEC-registered/ PACs. And this, in turn, dramatically increased the
> amount of such funds that were expended -- presumably because
> corporations were reluctant to fund ads when only the first two
> options were available post-WRtL. If that's the case, why was the
> addition of this third option such a sea-change?
>
>
> On Mon, Jul 9, 2012 at 2:49 PM, Rick Hasen <rhasen at law.uci.edu
> <mailto:rhasen at law.uci.edu>> wrote:
>
> If I understand correctly, everything done by a Super PAC (and
> other political committees registered with the FEC) counts as an
> IE. When done by a c4 and other outside groups not registered
> with the FEC, it is not an IE without express advocacy.
>
>
> On 7/9/2012 11:46 AM, Marty Lederman wrote:
>> Whoa! If I'm reading those charts correctly (and I might not
>> be), the vast majority of such spending has been on independent
>> expenditures, not electioneering communications! And yet in all
>> this time, I don't think I've seen a /single /ad that uses the
>> magic words, i.e., that could not have been characterized as an
>> electioneering communication subject to WRtL. Is this simply a
>> matter of self-chosen nomenclature, i.e., calling ECs
>> "independent expenditures" (perhaps for disclosure reasons)? Or
>> have I simply missed a huge outpouring of "magic words" ads that
>> corporations and unions were just chomping at the bit to
>> subsidize with treasury funds, even post-WRtL, that have now been
>> unleashed by virtue of CU?
>>
>> On Mon, Jul 9, 2012 at 2:14 PM, Rick Hasen <rhasen at law.uci.edu
>> <mailto:rhasen at law.uci.edu>> wrote:
>>
>> There was an uptick even before the change in the disclosure
>> rules from van Hollen. Here's a chart from CRP data of
>> outside spending on IEs over time:
>>
>>
>>
>>
>> Now here's the same chart, adding ECs on top of the IEs in
>> the translucent color---very little additional:
>>
>>
>>
>> On 7/9/2012 11:09 AM, Marty Lederman wrote:
>>> Thanks, Rick. My assumption, however, is that all or
>>> virtually all of the spending in question has /not/ been
>>> used for advertising in the form of "magic words."
>>> Accordingly, that spending could have been used after WRtL,
>>> even if CU had come out the other way, right? And if I
>>> understand your post correctly, to the extent there has been
>>> an uptick in "magic words" independent expenditures, it
>>> might well be because they are subject to lesser disclosure
>>> rules than ECs, and not to CU.
>>>
>>> Is this correct?
>>>
>>> On Mon, Jul 9, 2012 at 1:59 PM, Rick Hasen
>>> <rhasen at law.uci.edu <mailto:rhasen at law.uci.edu>> wrote:
>>>
>>> I think the answer to this is complicated by the fact
>>> that there is now a fuller disclosure regime for
>>> electioneering communications than for independent
>>> expenditures (an ironic result of the van Hollen
>>> decision). But given the close timing of the two cases
>>> I don't think there's any way to tease out what kind of
>>> spending WRTL II would have unleashed without CU. You
>>> can see from the chart I sent around earlier that ECs
>>> were way up in 2008 compared to 2004 (that is, in the
>>> period between WRTL and CU) but that ECs/IEs are way up
>>> over 2008 as well.
>>>
>>>
>>> On 7/9/2012 10:55 AM, Marty Lederman wrote:
>>>> If I may repeat a question I've asked before (to which
>>>> I have yet to see any answer -- perhaps I'm the only
>>>> one who's interested!):
>>>>
>>>> To the extent spending has materially increased or
>>>> changed in nature in these past two or so election
>>>> cycles, how much of the change can be chalked up to
>>>> Wisconsin Right to Life rather than to CU?
>>>>
>>>> That is to say: Is an appreciable amount of the
>>>> spending about which you're all debating being expended
>>>> for "magic words" advertising, or could all or almost
>>>> all of it have been spent after WRtL, even if CU had
>>>> come out the other way?
>>>>
>>>> Thanks in advance.
>>>>
>>>>
>>
>
> --
> Rick Hasen
> Chancellor's Professor of Law and Political Science
> UC Irvine School of Law
> 401 E. Peltason Dr., Suite 1000
> Irvine, CA 92697-8000
> 949.824.3072 <tel:949.824.3072> - office
> 949.824.0495 <tel:949.824.0495> - fax
> rhasen at law.uci.edu <mailto:rhasen at law.uci.edu>
> http://law.uci.edu/faculty/page1_r_hasen.html
> http://electionlawblog.org
> Pre-order The Voting Wars:http://amzn.to/y22ZTv
> www.thevotingwars.com <http://www.thevotingwars.com>
>
>
>
>
--
Rick Hasen
Chancellor's Professor of Law and Political Science
UC Irvine School of Law
401 E. Peltason Dr., Suite 1000
Irvine, CA 92697-8000
949.824.3072 - office
949.824.0495 - fax
rhasen at law.uci.edu
http://law.uci.edu/faculty/page1_r_hasen.html
http://electionlawblog.org
Pre-order The Voting Wars: http://amzn.to/y22ZTv
www.thevotingwars.com
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://webshare.law.ucla.edu/Listservs/law-election/attachments/20120709/2d0091c7/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: image/png
Size: 10556 bytes
Desc: not available
URL: <http://webshare.law.ucla.edu/Listservs/law-election/attachments/20120709/2d0091c7/attachment.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: image/png
Size: 10364 bytes
Desc: not available
URL: <http://webshare.law.ucla.edu/Listservs/law-election/attachments/20120709/2d0091c7/attachment-0001.png>
View list directory