[EL] ³Petition for Disclosure on Political Spending Gains Support²

[Smith, Brad]

These were all efforts to regulate properly functioning bond and securities markets. The current petition goes far beyond that, and is, of course, intended to. It can not be seriously denied that it is prompted not by concern for capital and securities markets, but as an effort to "respond" to Citizens United in the wake of the Congress's not passing DISCLOSE and the FEC refusing to enact DISCLOSE-type regulations. 

This is very similar to the 2000 law getting the IRS into regulating 527s, something that has not worked out too well. There, too, the issue was something placed on the agency in fulfillment of its general mission. It was not about raising appropriate taxes of tax enforcement, but using the Internal Revenue Service to attempt to regulate political activity that could not (due to Buckley and other court decisions) or would not be regulated by the FEC.

We should not degrade ourselves by pretending this is about securities regulation. This is about "any port in a storm man we really want to regulate this stuff but Congress won't, and the FEC won't, and we even tried the FCC but that didn't work, and the IRS is in scandal land and where the heck else can we maybe force something through with a reasonable straight face and - hey, maybe the SEC can claim some jurisdiction, enough that we can spin it to the patsies in the press with a reasonably straight face" regulation. There's an acronym for that, but it takes some time to figure out.

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: Kurt Walters [kwalters at campaignmoney.org]
Sent: Wednesday, November 13, 2013 12:19 PM
To: Smith, Brad; law-election at uci.edu
Subject: Re: [EL] ³Petition for Disclosure on Political Spending Gains Support²

Perhaps she could speak more knowledgeably about the subject than I can,
but Ciara Torres-Spelliscy has an excellent law journal article entitled
"Safeguarding Markets from Pernicious Pay to Play: A Model Explaining Why
the SEC Regulates Money in Politics"
(http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2184554) on SSRN that
responds to this idea, citing previous examples of the SEC regulating
money in politics and curbing pay-to-play.

The first paragraph of the abstract:
"At first blush, the SEC¹s regulation of money in politics may seem to
fall outside of its jurisdiction, but this is a mistake.  This view
ignores three previous times when the SEC stepped in to curb pay to play:
(1) in the municipal bond market in 1994; (2) in the public pension fund
market in 2010; and (3) in investigating questionable payments
post-Watergate from 1974 to 1977.  The result of the first two
interventions led to new Commission rules and the third intervention
resulted in the Foreign Corrupt Practices Act (a federal statute)."

----
Kurt Walters

Research & Policy Analyst
Public Campaign Action Fund
(202) 640-5598
kwalters at campaignmoney.org



On 11/13/13 11:15 AM, "Smith, Brad" <BSmith at law.capital.edu> wrote:

>Allen Dickerson and I address the issue from an administrative law
>perspective in the Harvard Business Law Review:
>http://www.hblr.org/wp-content/uploads/2013/10/HLB208_crop.pdf. It's part
>of a very good symposium on corporate political spending.
>
>As Craig's post indicates, this is part of an effort to get the SEC
>further involved in regulating campaign finance, something beyond both
>its mission and its expertise. That's what our article, "The Non-Expert
>Agency," addresses.
>
>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 Craig Holman
>[holman at aol.com]
>Sent: Wednesday, November 13, 2013 10:22 AM
>To: joseph.e.larue at gmail.com; law-election at uci.edu; rhasen at law.uci.edu
>Subject: Re: [EL] ³Petition for Disclosure on Political Spending Gains
>Support²
>
>Through deregulation and lack of enforcement, very little is left of what
>by all rights should be a very robust transparency law established by
>BCRA.
>
>The law itself is quite clear that the sources of funds behind campaign
>ads are subject to disclosure. Section 201 of BCRA, for example, lays out
>the disclosure requirements for groups funding electioneering
>communications. BCRA clearly states that all major donors to the person
>making the electioneering communication must be disclosed, not just those
>who contributed for a campaign ad. The provision reads in part: ³Every
>person who makes a disbursement for the direct costs of producing and
>airing electioneering communications in an aggregate amount in excess of
>$10,000 during any calendar year shall, within 24 hours of each
>disclosure date, file with the Commission a statement containing . . .
>the names and addresses of all contributors who contributed an aggregate
>amount of $1,000 or more to the person making the disbursement during the
>period beginning on the first day of the preceding calendar year and
>ending on the disclosure date.
>
>The FEC altered its disclosure regulation interpreting the law at the end
>of 2007 requiring an entity that makes electioneering communications to
>disclose ³the 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.² BCRA
>makes no such exception.
>
>As a result, this language has recently been interpreted by a growing
>number of outside groups to mean that only those donors who specifically
>³earmark² funds for a campaign ad need be disclosed -- which has meant a
>dramatic fall in donor disclosure from nearly 100% donor disclosure in
>2004 and 2006 to about half that today. This requirement that only donors
>who earmark their funds for campaign ads has been extended by the FEC to
>independent expenditures as well as electioneering communications. The
>public (and shareholders, unless a corporation has its own internal
>voluntary disclosure rules) is now left in the dark as to who is funding
>the groups that sponsor electioneering communications and independent
>expenditures.
>
>It is largely suspected -- though it cannot be documented because of the
>lack of disclosure -- that most of this "dark money" comes from corporate
>treasury accounts.
>
>The petition before the SEC requests rulemaking to establish transparency
>for shareholders as to how a corporation's CEO is spending their money on
>electioneering communications and independent expenditures funneled
>through outside groups as well as contributions to lobbying campaigns.
>
>
>
>Craig Holman, Ph.D.
>Government Affairs Lobbyist
>Public Citizen
>215 Pennsylvania Avenue SE
>Washington, D.C. 20003
>T-(202) 454-5182
>C-(202) 905-7413
>F-(202) 547-7392
>Holman at aol.com
>
>
>-----Original Message-----
>From: Joe La Rue <joseph.e.larue at gmail.com>
>To: law-election <law-election at uci.edu>; Rick Hasen <rhasen at law.uci.edu>
>Sent: Wed, Nov 13, 2013 7:06 am
>Subject: [EL] ³Petition for Disclosure on Political Spending Gains
>Support²
>
>Regarding this:
>
>³Petition for Disclosure on Political Spending Gains
>Support²<http://electionlawblog.org/?p=56699>
>Posted on November 12, 2013 8:34 pm<http://electionlawblog.org/?p=56699>
>by Rick Hasen<http://electionlawblog.org/?author=3>
>WSJ
>reports.<http://blogs.wsj.com/cfo/2013/11/12/petition-for-disclosure-on-po
>litical-spending-gains-support/>
>
>I'm confused.  Don't corporations already have to disclose their
>independent expenditures, the same as everyone else?  I'm not sure that
>it's always "voluntarily," as the author says.  But it is done, isn't it?
> And, if so, what's the point of this proposal, other than more
>regulation and more hoops for those who want to engage in political
>speech to jump through?  Am I missing something?
>
>Joe
>___________________
>Joseph E. La Rue
>cell: 480.272.2715
>email: joseph.e.larue at gmail.com<mailto:joseph.e.larue at gmail.com>
>
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