[EL] question about disclosure rules as interpreted by the FEC

[JBoppjr at aol.com]

There is actually another reason that disclosure of  donors has gone down.  
The statute allows a group to set up a segregated  fund, pay EC's out of 
the fund, and only report donors out of this fund of more  that $1,000. Many 
groups are now doing this -- directing contributions of less  that $1,000 to 
a segregated fund from which ECs are paid.  It takes time to  set this up 
so, over time, it has been used more. So if one wants to complain  about 
reduced donor disclosure, to the extent that segregated funds are being  used, 
they have the drafters of the law to blame.  Jim Bopp
 
 
In a message dated 3/23/2012 2:25:14 P.M. Eastern Daylight Time,  
holman at aol.com writes:

 
 
Hi Rick: 


I believe you already know much of this, but since you asked, below is a  
segment of a report entitled "Fading Disclosure," that discusses the 
evolution  away from near 100% donor disclosure in 2004 and 2006 to about 50% donor  
disclosure in 2010, largely attributable to the revised FEC disclosure rule 
of  2008, compounded by the 3-member Republican caucus on the FEC 
stretching the  wording of the revised rule to an incredulous nth degree in the 
Freedom's  Watch decision.


Specifically as to your question, #2 is now the standard for donor  
disclosure for outside groups making electioneering communications or  independent 
expenditures. Since super PACS are registered committees rather  than 
outside groups, the rationale to gut the disclosure requirement expressed  by the 
Republican caucus does not necessarily apply to super PACs -- but that  is 
not to say the caucus will not also gut the disclosure requirement for  
registered committees if asked. All the caucus has to do is choose not to  
enforce the law for registered committees as well.


----------------------------------------------------------------------------
-----------------------------------
Taylor Lincoln and Craig Holman, Fading Disclosure (Sept. 15,  2010): 


After Wisconsin Right to Life created a broad exemption to BCRA’s ban on  
independent electioneering
communications close to elections – the case permitted corporations and  
unions
to fund any ad that could be interpreted as something other than an  appeal 
to support or
oppose a candidate – the FEC modified its regulations implementing the  
disclosure requirements.
The agency essentially preserved its provision that required a  
non-corporate
entity engaging in electioneering communications to disclose all donors  of 
at least $1,000
dating back through the last calendar year. [See 11 C.F.R. § 104.20(c)(8) 
(requiring disclosure of  “the name and address of each donor who donated an 
amount aggregating $1,000 or more to the person making  the disbursement, 
aggregating since the first day of the preceding calendar year”].


But the FEC reasoned that since corporations and labor unions could make  
electioneering
communications, they should not be required to disclose the names of  
everyone who provides
them with $1,000 or more for purposes unrelated to electioneering. The  
agency
added a separate section to that effect, requiring a corporation or labor  
organization that
makes electioneering communications to disclose “the name and address of  
each person
who made a donation aggregating $1,000 or more to the corporation or  labor 
organization,
aggregating since the first day of the preceding calendar year, which  was 
made for the purpose
of furthering electioneering communications.” BCRA makes no such  
exception. [11 C.F.R. § 104.20(c)(9) (emphasis added)].


Nearly all “third party” groups that spend corporate money on TV ads  
attacking candidates,
such as Americans for Job Security or the U.S. Chamber of Commerce, are  
themselves incorporated
and thus evade disclosing their major donors under the rule. As a result,  
this
language has recently been interpreted by a growing number of outside  
groups to mean
that only those donors who specifically “earmark” funds for a campaign ad  
need be disclosed.
FEC staff has periodically requested full donor disclosure from outside  
groups financing
independent ads, but the Commission itself has deadlocked on taking any  
actions 
 
against those declining compliance. As documented in this study, more and  
more of these
groups are now refusing to disclose the major donors funding their  
campaign ads, claiming
that none of their funders earmarked the money for electioneering  
activity. This refusal to
disclose donors is also expanding among groups funding other independent  
expenditures,
not just electioneering communications.


On August 18, 2010, the Republican bloc of FEC commissioners further  
emasculated the
disclosure requirements when it blocked a case alleging that an  
organization called Freedom’s
Watch failed to comply with the disclosure rule. [Statement of Reasons for 
Chairman Matthew S. Petersen  and Commissioners Caroline C. Hunter and 
Donald F. McGahn, Freedom’s Watch, Inc., MUR 6002 (Aug. 13,  2010), available at:
http://eqs.sdrdc.com/eqsdocsMUR/10044274536.pdf]


Freedom’s Watch, a conservative nonprofit corporation, sponsored  
television ads in the
2008 elections that reportedly were funded by roughly $30 million from a  
single donor. A
New York Times article quoted an unnamed Republican operative saying that  
the group’s
$30 million for ad spending “came almost entirely from casino mogul  
Sheldon G. Adelson,”
who has “insisted on parceling out his money project by project, as  
opposed to setting an
overall budget, limiting the group’s ability to plan and be nimble . . .  .”
 [Michael Luo, “Great Expectations for a  Conservative Group Seem All But 
Dashed,” The New York Times , April  12, 2008.]


Substantial evidence showed that Mr. Adelson earmarked contributions for  
Freedom’s
Watch’s electioneering communications budget. But in a written “statement  
of reasons,”
the three Republican commissioners announced a new, even higher bar for  
requiring disclosure:
Not only must funds be earmarked for electioneering communications; they  
must
be earmarked for a specific campaign ad.


Through deregulation and lack of enforcement, very little is left of what  
by all rights should
be a very robust transparency law.




Craig Holman, Ph.D.
Government Affairs  Lobbyist
Public Citizen
215 Pennsylvania Avenue NE
Washington, D.C.  20003
TEL: (202) 454-5182
CEL: (202) 905-7413
FAX: (202)  547-7392
Holman at aol.com


-----Original  Message-----
From: Rick Hasen <rhasen at law.uci.edu>
To:  law-election <law-election at UCI.edu>
Sent: Fri, Mar 23, 2012 1:54  pm
Subject: [EL] question about disclosure rules as interpreted by the  FEC

Some time back, the three Republican FEC  commissioners took the position 
that only a limited set of contributions  funding electioneering 
communications need to be disclosed.
>From the _Washington Post:_ 
(http://www.washingtonpost.com/wp-dyn/content/article/2010/09/15/AR2010091507844.html) 


The Republican commissioners said they interpreted the  regulations to mean 
that a donation only needed to be reported if it was for  the specific 
advertisement included on the disclosure form. That means that  even if Adelson 
had given money to run advertisements generally, his name  wouldn't be 
required to be disclosed unless he directed his money toward  specific ads. 


So I'm trying to get a handle on how this  split on the FEC affects what is 
ultimately disclosed to the FEC.  My  question is this: how would the 
extent and/or timing of disclosure be  different between these two hypothetical 
cases:

Case  1: Contributor gives money to group, asking it to be used for 
electioneering  communications attacking Senator x, who is running for  reelection.

Case 2: Exactly the same as Case 1,  except Contributor names a specific ad 
attacking Senator x, to be broadcast at  a specific time on a specific 
television station.

I'm  particularly interested in whether if a contributor gives money to a 
Super PAC  (registered with the FEC) as opposed to to a 501c4, whether the 
contribution  to the super PAC in Case 1 gets disclosed---when and  how.

Thanks.

Rick

-- 
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_ (mailto:rhasen at law.uci.edu) 
_http://law.uci.edu/faculty/page1_r_hasen.html_ 
(http://law.uci.edu/faculty/page1_r_hasen.html) 
_http://electionlawblog.org_ (http://electionlawblog.org/) 



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