[EL] The origins of [undisclosed spending that affects elections in some way, shape or form]?

Wed Nov 4 06:45:30 PST 2015

Craig,

Thank you for your detailed response. I think your assessment of
electioneering communications (ECs) is fair, and goes back to the statute's
reporting requirements:

"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."

52 U.S.C. 30104(f)(2)(F) (emphasis added). I will look at the rule /
interpretation changes you cite in detail.

But since no one can even make an electioneering communication right now,
nor could have through the entire election cycle thus far (by definition,
as Iowa is still more than 30 days away, 52 U.S.C. 30104(f)(3)(A)(i)(II)),
we're only dealing with independent expenditures (IEs) and issue advocacy,
correct?

We have event-driven reporting for IEs and PAC status in play right now,
the latter of which includes comprehensive donor disclosure and, going back
to *Buckley*, is not something to cast upon groups lightly. That's changing
quite a bit at the state level, with approval from many federal courts of
appeal (some hopeful exceptions), but let's stick with the federal laws and
precedent.

Which old regs required event-driven IE reports to list specific donors
either to the group taking them out other than those actually supporting
the ad? Given that PACs have regular reporting that includes receipts and
disbursements (11 CFR 104.4), I don't think it's a stretch to not require
the report of any and all contributors from groups in their event-driven
reports:

(e) Content of verified reports and statements and verification of reports
> and statements.

(1) Contents of verified reports and statement. If a signed report or
> statement is submitted, the report or statement shall include:
> * * *
> (vi) The identification of each person who made a contribution in excess
> of $200 to the person filing such report, *which contribution was made
> for the purpose of furthering the reported independent expenditure*.

11 CFR 109.10 (emphasis added).

To be sure, I've been on the losing end of a disclosure case against the
FEC, upholding the "express advocacy" definition and "major purpose" test
as neither vague nor overbroad. That said, those tests still exist for the
purpose of limiting disclosure and PAC status. It's far too simplistic a
narrative to claim there's been a massive change in campaign finance that's
allowed for lots of speech (even expensive speech) that criticizes
candidates without falling into the federal disclosure framework.

-- 
Steve Klein
Attorney*
Pillar of Law Institute
www.pillaroflaw.org

**Licensed to practice law in Illinois and Michigan*

On Nov 4, 2015, at 5:52 AM, Craig Holman <holman at aol.com> wrote:

Stephen:

With BCRA's disclosure requirements, all groups -- including nonprofits --
disclosed their donors behind electioneering communications as well as
independent expenditures. We had nearly 100% donor disclosure in 2004 and
2006.

The sensible state of affairs created by BCRA and affirmed by the Court
lasted for only about three-and-a-half years. In June 2007, the Supreme
Court reversed the McConnell decision in part in the Wisconsin Right to
Life decision by allowing corporate and union money to finance
electioneering communications if the ads were “issue oriented.” The Federal
Election Commission (FEC), the agency charged with implementing and
enforcing the campaign finance law, responded later that year by exempting
groups making electioneering communications from disclosing contributors’
identities except in special cases in which donors specifically earmarked
money for that purpose. [11 C.F.R. § 104.20(c)(9).]

Thus, corporations, trade associations and corporate-funded front groups
could spend money from their treasuries without disclosing the sources of
those funds as long as the donors did not specifically give money to
finance electioneering advertisements. [Public Citizen 12 Months After
(January 2011)] Since then, a similar "earmarking" requirement has been
applied by outside groups to avoid disclosure of donors behind independent
expenditures, which had not previously been the case.

Just before the 2010 elections, the three Republicans on the FEC issued a
statement endorsing an even narrower interpretation of the disclosure rule.
They opined that electioneering groups should only have to disclose those
donors who specified that their money would be used for a specific ad,
aired in a specific race. [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]

When Ellen Weintraub, a Democratic commissioner on the agency who voted for
the disclosure rule in 2007, read the Republican statement, she commented:
“This is an unprecedented narrow reading of the regulation. It’s certainly
not what I intended when I voted for that regulation.” [Robert Wechsler,
“Ethical Officials and Disclosure Rules,” CityEthics.org
<http://cityethics.org> (Sep. 16, 2010)]. Because few donors are apt to
attach such specific instructions to their contributions, the effect of the
subsequent FEC interpretations of the Wisconsin Right to Life decision has
been to gut the donor disclosure requirement enshrined in BCRA, as well as
the donor disclosure requirement that had long before existed for
independent expenditures, and to serve as the principal cause of the
creation of what we call today "dark money."

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: Steve Klein <stephen.klein.esq at gmail.com>
To: Paul Blumenthal <paulblumenthal at huffingtonpost.com>
Cc: law-election at UCI.edu <law-election at uci.edu> <law-election at uci.edu>
Sent: Tue, Nov 3, 2015 10:32 pm
Subject: Re: [EL] The origins of [undisclosed spending that affects
elections in some way, shape or form]?

Indeed, but "The FEC responded by gutting a disclosure provision from the
McCain-Feingold law that required groups to disclose their donors when
reporting independent spending" doesn't  narrow it down for me, considering
electioneering communications never--even in BCRA sans any regulatory
interpretation--translated to PAC status.

Sent from my iPad

On Nov 3, 2015, at 8:21 PM, Paul Blumenthal <
paulblumenthal at huffingtonpost.com> wrote:

The article goes further than that sentence.

On Tue, Nov 3, 2015 at 10:17 PM, Stephen Klein <stephen.klein.esq at gmail.com>
wrote:

> Paul Blumenthal writes:
>
> "Further, corporations and unions can spend undisclosed 'dark money' on
> elections through nonprofit corporations, which are not subject to campaign
> finance disclosure laws due to a prior Supreme Court ruling and a Federal
> Election Commission rule change in 2007 that eliminated a key reporting
> requirement."
>
> I assume, despite the evolving definitions of disclosure and undisclosed
> money that in some way, shape or form affects an election ("dark money"),
> he's referring to *Buckley v.  Valeo* as said "prior Supreme Court
> ruling" (I suppose listing the name or the more ominous "1976" that
> accompanies the ruling's citation might be too much for dear readers), but
> what 2007 rulemaking is at issue and how, exactly, did it affect *Buckley*'s
> precedent?
>
> Sent from my iPhone
>
> On Nov 3, 2015, at 5:46 PM, Rick Hasen <rhasen at law.uci.edu> wrote:
>
> “Anthony Kennedy’s Citizens United Disclosure Salve ‘Not Working'”
> <http://electionlawblog.org/?p=77234>
> Posted on November 3, 2015 8:08 am <http://electionlawblog.org/?p=77234>
> by Rick Hasen <http://electionlawblog.org/?author=3>
> Paul Blumenthal
> <http://www.huffingtonpost.com/entry/citizens-united-anthony-kennedy_5637c481e4b0631799134b92>
>  for HuffPo.
>
>
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>

-- 
Paul Blumenthal
Huffington Post
Twitter: PaulBlu | o: (202) 624-9384 | c: (202) 714-8545

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