[EL] WRtL, CU, and Speech Now -- Which are the source(s) of the current corporate spending practices?

Mon Jul 9 12:21:03 PDT 2012

Making even further sense, now, thanks!

If I understand you, then, post-WRtL but pre-CU, corporations could use
treasury $$ to pay for non-express advocacy in their own name -- but they
were reluctant to do that, because of disclosure requirements.  The better
option was to contribute treasury funds to 527s or to (c)(4)s -- but that
option was fraught with peril, not because of the Austin rule, but because
of the uncertainty occasioned by CalMed and those footnotes in McConnell
that appeared to bless the limits on contributions to expenditure-only
PACs.  That uncertainty, however, cast a shadow not only on such
contributions of treasury funds, but also on contributions from a corporate
PAC, right?

On this theory, if I'm not mistaken, it was not so much CU that led to the
flood of corporate treasury spending as much as it was the one-two punch of
WRtL followed by SpeechNow, et al.

Now, one could argue that without the rhetorical flourishes and broad
pronouncements in CU, the courts of appeals would have been reluctant to
rule as they did in SpeechNow, et al.  But that's a more complex, more
speculative account, isn't it?

Let me ask the question this way:

If the Court were to overrule CU tomorrow, but did nothing to affect WRtL
and SpeechNow, then, absent further legislative action, wouldn't the
current floodgates for expenditure of corporate and union treasury funds
remain just as wide as they are now, given that virtually all advocacy is
nonexpress advocacy?

On Mon, Jul 9, 2012 at 3:07 PM, Rick Hasen <rhasen at law.uci.edu> wrote:

>  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 quite critical<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> 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> 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> 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 92697-8000949.824.3072 - office949.824.0495 - faxrhasen at law.uci.eduhttp://law.uci.edu/faculty/page1_r_hasen.htmlhttp://electionlawblog.org
>> Pre-order The Voting Wars: http://amzn.to/y22ZTvwww.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 92697-8000949.824.3072 - office949.824.0495 - faxrhasen at law.uci.eduhttp://law.uci.edu/faculty/page1_r_hasen.htmlhttp://electionlawblog.org
> Pre-order The Voting Wars: http://amzn.to/y22ZTvwww.thevotingwars.com
>
>
>
>
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