[EL] Fortune 500 election-related contributions (or "You Can't Go Home Again")

Mon Jul 9 18:52:28 PDT 2012

the First Amendment  is a pesky thing

From: ellen.aprill at lls.edu
Date: Mon, 9 Jul 2012 16:29:37 -0700
To: mbeckel at publicintegrity.org
CC: law-election at uci.edu
Subject: Re: [EL] Fortune 500 election-related contributions (or "You Can't Go Home Again")

For what it is worth, the U.S. Chamber of Commerce, which is on a calendar year, reported spending $39,537,433
 on political campaign intervention for its 2010 on Schedule C of its Form 990 and $23,175,622 for 2008.  My academic
premium Guidestar subscription has expired (and it will take a couple of days to process my new application), so I 
cannot give you the 2006 numbers right now.

  Ellen  

-------
Ellen P. Aprill
John E. Anderson Professor of Tax Law
Loyola Law School
919 Albany Street
Los Angeles, CA 90015
213-736-1157

On Mon, Jul 9, 2012 at 2:25 PM, Beckel, Michael <mbeckel at publicintegrity.org> wrote:

Agreed. It would be interesting to see what focus groups said about the paid for by line!

I know I’m a little late to this discussion, but I also wanted to throw out a couple pieces of data.

Trevor asked how much 501c6s had reported spending to the FEC. In a joint analysis that the Center for Public Integrity and the Center for Responsive Politics published last month, we showed that 501c6s had reported spending about $46 million during the 2010 election cycle – and as of mid-June, 501c6s had reported spending about $3.5 million. 

Of course, if issue ads that mention candidates run outside of the “electioneering communication” window of 30 days prior to a primary and 60 days prior to the general election, they are not reported to the FEC (and are not accounted for in the analysis).

As we reported, Crossroads GPS spent about $44 million on ads between the start of 2011 and mid-June, but has only reported just over $200,000 to the FEC this cycle, because the bulk of the ads did not air within the EC windows.

Also, for what it’s worth, I think Rick’s screenshots from the CRP’s website showed “cycle-to-date” spending, not spending for the full cycle. 

As you can see below (and online here), there was more than $119 million spent on electioneering communications in 2008, with 501c nonprofits accounting for the vast majority of that — and in the wake of WRTL, the U.S. Chamber of Commerce in particular accounting for about $16.5 million of that sum, according to the Center for Responsive Politics.

Sincerely,
Michael Beckel
Center for Public Integrity

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Rick Hasen
Sent: Monday, July 09, 2012 5:14 PM
To: Kelner, Robert
Cc: 'law-election at uci.edu'
Subject: Re: [EL] Fortune 500 election-related contributions (or "You Can't Go Home Again")

Still, I wonder how voters would react to ads that say "Paid for by Sheldon Adelson" rather than "Paid for by Restore Our Future."
It would be an interesting question for focus groups.

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, 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 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) 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 of this theory about corruption, 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 HasenChancellor's Professor of Law and Political ScienceUC Irvine School of Law401 E. Peltason Dr., Suite 1000Irvine, CA 92697-8000949.824.3072 - office949.824.0495 - faxrhasen at law.uci.eduhttp://law.uci.edu/faculty/page1_r_hasen.htmlhttp://electionlawblog.orgPre-order The Voting Wars: http://amzn.to/y22ZTvwww.thevotingwars.com

-- Rick HasenChancellor's Professor of Law and Political ScienceUC Irvine School of Law401 E. Peltason Dr., Suite 1000Irvine, CA 92697-8000949.824.3072 - office
949.824.0495 - faxrhasen at law.uci.eduhttp://law.uci.edu/faculty/page1_r_hasen.htmlhttp://electionlawblog.orgPre-order The Voting Wars: http://amzn.to/y22ZTvwww.thevotingwars.com

-- Rick HasenChancellor's Professor of Law and Political ScienceUC Irvine School of Law401 E. Peltason Dr., Suite 1000Irvine, CA 92697-8000949.824.3072 - office949.824.0495 - faxrhasen at law.uci.eduhttp://law.uci.edu/faculty/page1_r_hasen.htmlhttp://electionlawblog.orgPre-order The Voting Wars: http://amzn.to/y22ZTvwww.thevotingwars.com

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