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

Mon Jul 9 12:35:54 PDT 2012

Just for the record:  Almost certainly the first time Brad and I had the
same reaction to anything!  Even a stopped clock . . . .  ;-)

On Mon, Jul 9, 2012 at 3:32 PM, Smith, Brad <BSmith at law.capital.edu> wrote:

>  But that would also be to reverse Buckley. If CU had simply followed
> Austin, holding that corporations received different treatment, then
> SpeechNow would stand.
>
>  SpeechNow was going to win either way. There was no way that case lost
> at the DC Circuit, en banc. The reason we brought SpeechNow (filed before
> CU) was because it was an easy case based on Buckley.
>
>  *Bradley A. Smith*
>
> *Josiah H. Blackmore II/Shirley M. Nault*
>
> *   Professor of Law*
>
> *Capital University Law School*
>
> *303 E. Broad St.*
>
> *Columbus, OH 43215*
>
> *614.236.6317*
>
> *http://law.capital.edu/faculty/bios/bsmith.aspx*
>   ------------------------------
> *From:* law-election-bounces at department-lists.uci.edu [
> law-election-bounces at department-lists.uci.edu] on behalf of Rick Hasen [
> rhasen at law.uci.edu]
> *Sent:* Monday, July 09, 2012 3:26 PM
> *To:* Marty Lederman
> *Cc:* law-election at uci.edu
> *Subject:* Re: [EL] WRtL, CU, and Speech Now -- Which are the source(s)
> of the current corporate spending practices?
>
>  I think I counted 9 times (I'd have to go back and recheck) how many
> times the DC Circuit said that the Speechnow result flows from CU.  If CU
> were reversed, on the theory that independent spending could corrupt or
> create the appearance of corruption, there would be a strong argument to
> reverse the results in Speechnow as well.
>
>
> On 7/9/2012 12:21 PM, Marty Lederman wrote:
>
> 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
>>
>>
>>
>>
>
> --
> 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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