[EL] Fortune 500 election-related contributions (or "You Can't Go Home Again")
Rick Hasen
rhasen at law.uci.edu
Mon Jul 9 14:13:11 PDT 2012
On this point I completely agree---there is a path dependence here and
no return. But I would note that many of the wealthy do not want the
Sheldon Adelson spotlight, and are much happier hiding their
contributions through c4s and c6s.
On 7/9/2012 2:09 PM, Kelner, Robert wrote:
> Though I had promised to desist, and let the academics have at it,
> there is one point in Rick's post below that I can't resist
> highlighting. Rick correctly notes that even before CU, wealthy
> individuals could spend unlimited funds to air express advocacy ads
> for or against a candidate. What stopped them from doing so was not
> the campaign finance laws but either (a) ignorance that they could do
> so lawfully, or (b) the FCC's requirement that the ad say "Paid for By
> (insert name of the wealthy individual)."
>
> The one thing that I think CU did change fundamentally and forever,
> however, is the cultural norm around wealthy individuals publicly
> putting their money where their mouths are. I strongly suspect that if
> CU were overturned (on any grounds that left Buckley intact), we would
> still see Sheldon Adelson and others like him buying campaign ads
> supporting their favored candidates, regardless of the Paid for By tag
> line. The post-CU blossoming of political speech showed that
> individuals can publicly spend large sums on political speech and live
> to tell about it -- without the stigma or consequences some major
> donors once feared would ensue. That cultural shift in the campaign
> finance system is here to stay, with or without CU. You can't go home
> again.
>
> *From*: Rick Hasen [mailto:rhasen at law.uci.edu]
> *Sent*: Monday, July 09, 2012 03:07 PM
> *To*: Marty Lederman <lederman.marty at gmail.com>
> *Cc*: Kelner, Robert; law-election at uci.edu <law-election at uci.edu>
> *Subject*: Re: [EL] Fortune 500 election-related contributions
>
> 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
>
>
--
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
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