Today, the Campaign Legal Center, joined by Democracy 21, urged the Federal Election Commission (FEC) to investigate possible illegal in-kind contributions and coordination between Montana congressional candidate Ryan Zinke and the Super PAC he formed and that now supports his candidacy. The complaint, based on published reports, points to the Special Forces for America’s (SOFA) use of photographs that appear to have come from the Zinke campaign in television advertisements aired in support of Zinke’s candidacy. SOFA has spent more than $50,000 distributing the pro-Zinke ads since Zinke launched his campaign in October.
 
Photos of the candidate used extensively in SOFA’s advertisements appear to be from the same photo shoot as nearly identical photos posted on the Zinke campaign’s Facebook page. The photos appear onscreen for more than half of two different television advertisements aired by SOFA in support of Zinke. Federal law treats any funds spent by an outside group to republish candidate campaign materials as an in-kind contribution from the outside group to the candidate. Super PACs like SOFA are prohibited from making such in-kind contributions to candidates. And candidates are prohibited from coordinating with Super PACs in the republication of campaign materials.
 
“It appears that this Super PAC, set up by Mr. Zinke, is now using Zinke campaign photos in its so-called ‘independent’ ads. If so, this is a clear violation of a federal law that prohibits Super PACs from republishing candidate campaign materials,” said Paul S. Ryan, Campaign Legal Center Senior Counsel. “This is just another example of the myth of the independence between outside groups like SOFA and the candidates they support—a myth that the Supreme Court in Citizens United v. FEC bought into when it announced that so-called independent expenditures don’t pose a threat of corruption.”
 
To read the complaint filed today by the Campaign Legal Center and Democracy 21, click here.
 

Yesterday, the Campaign Legal Center filed a brief in the U.S. Court of Appeals for the Fifth Circuit in defense of the State of Mississippi’s campaign finance disclosure laws.  The brief urges the Court of Appeals to overturn a decision by the U.S. District Court for the Northern District of Mississippi, which ruled that the individuals who brought the case would not have to reveal their spending or their funders as they promote the passage or defeat of state constitutional amendment ballot measures.”     

“The U.S. Supreme Court has repeatedly upheld disclosure laws and been very clear in its recognition of the vital public interest in disclosing the identities of those funding efforts to influence elections - including in the ballot measure setting,” said Megan McAllen, Legal Center Associate Counsel.  “It must be emphasized that this law does not restrict in any manner how much these individuals may raise and spend in support of or opposition to state constitutional amendment initiatives, but only requires them to disclose that advocacy to the voting public.  The suit is one of many brought across the country in recent years that have asked courts to ignore legal precedent so that voters will be kept in the dark about those seeking to influence their vote.”

The facial and as-applied challenge to Mississippi’s disclosure requirements for state constitutional ballot measures was brought on behalf of five individuals seeking to pool their resources and raise additional funds from outside sources to impact such measures and to do so while hiding the identities of their backers.  The lower court in its ruling attempted to sidestep at least some of the established legal precedent by ruling on an as applied basis. 

In yesterday’s filing, the Legal Center urged the Fifth Circuit to apply the pertinent precedent and reverse the lower court’s decision, arguing that the district court “improperly discounted the state’s interests, disproportionately emphasized the Plaintiffs’ burdens, and failed to pay any deference” to Mississippi’s duly elected state legislators. 

To read the brief, click here.

Today, the Campaign Legal Center welcomes former Federal Election Commission (FEC) General Counsel Larry Noble to its staff, along with Legal Fellow Catherine Hinckley Kelley and Operations Manager Kazi Jones.

“It will be a pleasure to be back working side by side with Larry, and benefiting from his strategic advice and legal skills, as I was able to do when we were worked together at the FEC,” said Trevor Potter, Legal Center President and a former FEC Commissioner and Chairman.

“We have worked closely with Larry for many years in the courts, before the FEC and in the halls of Congress and we are excited to welcome a campaign finance expert of his stature to our team,” said Campaign Legal Center Executive Director J. Gerald Hebert.  “Larry brings with him the lessons learned and expertise gained over more than three decades of experience in the field of campaign finance and we look forward to bringing his skills to bear on the myriad challenges faced by the campaign finance reform movement.  We are also pleased to welcome Catie Kelley back to the Legal Center and to bring on board Kazi Jones to take over operations in our growing and dynamic organization.”

Mr. Noble will focus his work on the Legal Center’s campaign finance litigation and FEC regulatory program.  He was with the FEC for more than twenty years and served as General Counsel from 1987 until 2000.  During his career he has also headed up both the Center for Responsive Politics and Americans for Campaign Reform and spent a number of years in private practice at Skadden, Arps, Slate, Meagher & Flom, LLP, advising clients on matters relating to the regulation of political activity.

Ms. Kelley joins the Campaign Legal Center as a Legal Fellow directly from the FEC where she has worked as a staff attorney since 2010.  She previously worked at the Legal Center as a policy analyst from 2005 to 2007 before leaving to attend law school.  Ms. Kelley is a graduate of the Washington College of Law and Bates College.  She is admitted to practice law in the State of Maryland.

Ms. Jones comes to the Legal Center as the new Operations Manager after serving as the Administrative Director of Americans for Campaign Reform. She previously worked as the operations manager of The Bonner Group and The Center for Health and Gender Equity.  Ms. Jones is a graduate of Howard University. 

The Campaign Legal Center and Democracy 21 joined with Representative Chris Van Hollen (D-MD) today to submit joint comments in an IRS rulemakingthat called on the IRS to adopt a new definition of “campaign-related political activity” to replace the existing vague “facts and circumstances” test.   According to the comments, the new test should rely on clear and objective standards to define campaign activities by non-profit groups.

In July 2011, Democracy 21 and the Campaign Legal Center petitioned the IRS to initiate a rulemaking to revise the existing IRS regulations governing eligibility for section 501(c)(4) tax status, which the reform groups challenged as contrary to law.

In August 2013, Democracy 21 and the Campaign Legal Center joined with Representative Van Hollen and Public Citizen as plaintiffs in Van Hollen v. Internal Revenue Service, a lawsuit that challenged the IRS’s failure to commence the rulemaking requested in the July 2011 petition. The plaintiffs voluntarily dismissed the lawsuit when the IRS initiated the current rulemaking proceeding.

Donald Simon, Counsel to Democracy 21, took the lead role in preparing the comments submitted today.

The comments submitted today applaud the Treasury Department and the IRS for undertaking the rulemaking and for recognizing that problems exist with the current regulations, which were adopted more than a half century ago.

The comments support a proposal made by the IRS to use a test that treats as campaign-related activity any public communication that refers to a candidate in the period 30 days before a primary election or 60 days before a general election.  This test is based on an existing provision of the campaign finance laws which treat as an “electioneering communication,” any broadcast that refers to a candidate within that same time period. 

The comments disagree with another key part of the proposed IRS test.  Outside the 30/60 day time frame, the IRS proposes to treat as campaign activity only communications that include “express advocacy” or the functional equivalent of express advocacy — ads that are susceptible of no reasonable understanding other than advocating the election or defeat of candidates.

As the comments explain, this “express advocacy” test is too narrow, and allows sham issue ads to be used to attack candidates without being treated as campaign ads.  Such ads, which skirt words of express advocacy or their functional equivalent, are a common form of campaign attack ads.  Under the proposed IRS rule, social welfare organizations could spend an unlimited amount of their money to run such campaign attack ads without jeopardizing their status under section 501(c)(4).

The comments submitted by Representative Van Hollen and the reform groups urge the IRS to adopt another standard used in the campaign finance laws – and treat as “candidate-related political activity” any public communication that promotes, supports, attacks or opposes a candidate, commonly known as the “PASO” test.

 This standard was reviewed by the Supreme Court in the 2003McConnell case and upheld as satisfying constitutional standards of not being impermissibly vague.  The Supreme Court stated that the PASO words “provide explicit standards for those who apply them” and “give the person of ordinary intelligence a reasonable opportunity to know what is prohibited.”

The comments urge the IRS to adopt this standard in order to include in the definition of “candidate-related political activity” campaign attack ads that are widely used by section 501(c)(4) groups to sharply attack candidates, while posing as issue ads.

According to Democracy 21 President Fred Wertheimer, “The current vague IRS “facts and circumstances” test for determining political activity is being used by 501(c)(4) groups to run multi-million dollar candidate attack ad campaigns, while disingenuously claiming they are “issue ads.” The vague IRS standard for political activity has been difficult for the IRS to enforce and has been widely abused by outside groups to inject “dark money” contributions into federal elections.  Any effective definition of “candidate-related political activity” must include the tens of millions of dollars of candidate attack ads being run by section 501(c)(4) groups.”

According to Campaign Legal Center Executive Director J. Gerald Hebert, “The IRS must not be bullied from this rulemaking or from enforcing the law by those in Congress who want to keep secret the identities of billionaires seeking to buy election results and corrupt our democracy.  This rulemaking is critically important to stem the growth of what is already widespread abuse of this privileged tax status.  Any group that wants to engage in substantial campaign-related spending is free to do so, it would only need to register as a 527 organization and reveal its donors.”

The comments also call on the IRS to revise its proposal to treat all voter registration and get-out-the-vote activity as campaign related activity.  The comments urge the IRS to exclude non-partisan voter drive activities that do not favor any candidate or party in an election. Such non-partisan activities should not be treated as “candidate-related campaign activity” according to the comments.

The comment urge the IRS to adopt a uniform definition of “candidate-related political activity” applicable to all 501(c) groups.

Representative Van Hollen, Democracy 21 and the Campaign Legal Center also joined today with Public Citizen to submit separate comments on the amount of political activity a 501(c)(4) organization is allowed to undertake under the Internal Revenue Code and court decisions interpreting the code.

According to the comments:

The discussion in the NPRM emphasizes that a principal reason for a new rule is that “more definitive” guidance than “the existing, fact-intensive analysis” would be “helpful” by providing “greater certainty and reduc[ing] the need for detailed factual analysis” in determining whether an organization qualifies for section 501(c)(4) status.  Id. at 71536-37.  We strongly agree that greater precision and clarity is needed in the definition of what constitutes political intervention for purposes of non-profit tax status.  Indeed, much of the abuse of the law in the last two election cycles by groups like Crossroads GPS, which operate under a claim of section 501(c)(4) status, has resulted from the indeterminacy of the existing law—indeterminacy that has given room for campaign operatives to wrongly argue that their activities are issue-related and not campaign related.  Thus, the promulgation of clearer and more definitive standards is an important step to countering this abuse.

The IRS proposed as part of the definition of “candidate-related political activity” to include any public communication that refers to a candidate in the period 30 days before a primary election or 60 days before a general election.  In approving of this part of the proposed definition, the comments state:

We agree that the proposed time-frame test, which is based on the existing definition of “electioneering communications,” is a valuable component of an IRS definition of “candidate-related political activity.”  This kind of time-frame standard is a test that has been determined by Congress to encompass public communications that are substantially likely to be campaign-related.  Importantly, this test has been upheld by the Supreme Court for purposes of the federal disclosure laws.  In Citizens United, the Court, by an 8-1 vote, rejected a number of challenges, including an overbreadth challenge, to disclosure requirements imposed on groups making electioneering communications.  In particular, the Court rejected the “contention that the disclosure requirements must be limited to speech that is the functional equivalent of express advocacy.”  558 U.S. at 369.  The Court said that “[e]ven if the ads only pertain to a commercial transaction, the public has an interest in knowing who is speaking about a candidate shortly before an election.”  Id. (emphasis added).

This same informational interest supports the proposed time-frame definition of “candidate-related political activity” for section 501(c)(4) organizations.  The time-frame definition is also supported by the agency’s interest (and the public’s interest) in clarity and precision in the standards used for determining tax exempt status under section 501(c)(4).

But the comments do not support another part of the proposed definition, which is to use an “express advocacy” test outside the 30/60 day time frame.  The comments state:

Both the “magic words” test and the “functional equivalent” test are narrow, and exclude many ads that attack or promote candidates and influence elections, while avoiding magic words of advocacy.  More importantly, such ads typically are framed around discussion of an issue so that, while sharply attacking a candidate, they are also “susceptible” of an interpretation that the ads are discussing an issue, not calling for the election or defeat of a candidate.  As such, they would not fall within the strict confines of the “functional equivalent” test, even though the ads would unmistakably be understood as attacking a candidate and discouraging voter support for that candidate.

Further, the comments state:

The proposed rule is thus likely to make matters worse, not better, by giving a green light to exactly the kinds of campaign ads masquerading as “issue” ads that have been the stock-in-trade for organizations like Crossroads GPS.  These ads run outside the narrow pre-election time frame, skirt the use of “magic words” and are consistent with a claim that they are “susceptible” to an interpretation as discussing an issue, even though the ads primarily constitute sharp attacks on a candidate and would certainly be understood by the public as urging a vote against that candidate.  In other words, not only would the proposed IRS rule not end the existing abuse by sham “social welfare” organizations, it would license the continuation and growth of that abuse.

Instead, the comments urge the IRS to treat as “candidate-related political activity” any communications that “promote, support, attack or oppose” a candidate, commonly known as the PASO test.  The comments state:

The Supreme Court, in McConnell v. FEC, 540 U.S. 93 (2003), upheld the statutory PASO standard in the context of BCRA’s provisions limiting the funding of Federal election activities by party committees to Federal funds, noting that “any public communication that promotes or attacks a clearly identified Federal candidate directly affects the election in which he is participating.”  McConnell, 540 U.S. at 170. 

The Court further found that the PASO test was not unconstitutionally vague because, according to the Court, the “words ‘promote,’ ‘oppose,’ ‘attack,’ and ‘support’ clearly set forth the confines within which potential party speakers must act in order to avoid triggering the provision.”  Id. at 170 n.64.  The Court stated that the PASO words “‘provide explicit standards for those who apply them’ and ‘give the person of ordinary intelligence a reasonable opportunity to know what is prohibited.’”  Id. (quoting Grayned v. City of Rockford, 408 U.S. 104, 108-09 (1972)) (emphasis added).

McConnell thus makes clear that the PASO test is, on its own terms, sufficiently definite to satisfy constitutional requisites regarding vagueness.  The Court’s conclusion applies not only to party committees, but also to any “person of ordinary intelligence.”  McConnell, 540 U.S. at 170 n.64.  In other words, the terms comprising PASO are clear on their face—regardless of the regulatory context in which they are employed, and will provide an additional, necessary bright-line test for the rules defining “candidate-related political activity.”

In the rulemaking notice, the IRS proposed to treat all voter registration and get-out-the-vote drive activity as “candidate-related political activity.”  With regard to this proposal, the comments state:

In this regard, the proposed rule sweeps too broadly.  As drafted, it would cover purely non-partisan voter drive activities as well as partisan activity.  Such non-partisan drives are not covered by existing IRS rules, which exempt non-partisan voter drives (and indeed, permit section 501(c)(3) charitable organizations—which are otherwise prohibited entirely from intervening or participating in political campaigns—to nonetheless conduct non-partisan voter drives).  Such non-partisan activities have also traditionally been exempt from the campaign finance laws, including from restrictions such as the ban on corporate expenditures to influence elections that was in place prior to Citizens United..  11 C.F.R. § 114.4(c)(3).

The overall point is that truly non-partisan voter drive activity has important benefits to the public interest, and does not threaten to cause the same problems caused by partisan candidate-related political activity, including the use of undisclosed money to fund such activity.  The non-partisan character of the activity is itself the best protection against the problems of corruption, undue influence and appearance of corruption that are threatened by partisan activities.

The comments conclude:

This is an extraordinarily important rulemaking.  The IRS has a responsibility to see that the tax laws are properly interpreted, implemented and enforced.  The tax laws provide that social welfare organizations operating under section 501(c)(4) of the tax code will be devoted “exclusively” to their exempt purposes, which do not include campaign-related activity.  The tax laws further provide that any group that wishes to engage in substantial campaign-related spending is free to do so, but must organize under § 527 of the code.

The difference is not merely form over substance.  Section 527 provides for public disclosure of spending, and of the sources of funding, for expenditures by “political organizations.”  This requirement of the tax code is being frustrated by groups that are engaging in substantial amounts of campaign-related spending and claiming tax-exempt status as social welfare organizations, in violation of the requirements of section 501(c)(4), and without complying with the disclosure obligations imposed by the tax code on section 527 groups. 

There have been two election cycles since the Citizens Unitedopinion was issued, and we are well into a third.  The amount of money spent by 501(c)4 organizations on candidate-related political activity from undisclosed sources grew dramatically between 2010 and 2012, and there is every reason to believe further growth will occur in the future.  This is a problem that is directly within the purview of the IRS, since the principal vehicle for such spending has been groups claiming tax-exempt status as section 501(c)(4) social welfare organizations, which are taking advantage of lax, ill-defined and poorly enforced rules to exceed restrictions on campaign activities by such groups.

It is the responsibility of the IRS to fix this problem.  Although the agency has been remiss in failing to start this rulemaking earlier, it is now underway and the agency should move forward with determination to take the steps necessary to restore effective disclosure of campaign money to elections in this country, by closing the loopholes that have allowed undisclosed money to flow into campaigns since Citizens United.

To read the full IRS comments, click here.

Today, the Campaign Legal Center, joined by Democracy 21, strongly urged the Federal Election Commission (FEC) to uphold federal disclaimer requirements for political advertisements on mobile phones and further pressed the agency to conduct a related rulemaking originally proposed by the FEC in 2011. The watchdog groups filed comments in response to the FEC’s draft Advisory Opinions 2013-18, produced in response to a request from Revolution Messaging LLCseeking an exemption from the disclaimer requirements.

The Commission will consider multiple draft opinions at its Thursday meeting and the comments of the Campaign Legal Center and Democracy 21 promote the adoption of Revised Draft A, which concludes that the advertisements in question do not qualify for exemptions but that certain alternative means of delivering the disclaimers is acceptable (e.g., linking to a website that contains the complete disclaimer). The comments strongly condemned Draft B, which concludes that the ads are exempt from the disclaimer requirements, warning that its adoption would eviscerate disclaimer requirements for political ads delivered via mobile phones—a rapidly growing type of advertising.

“These disclaimer requirements have been consistently upheld by the Supreme Court, which has repeatedly recognized the vital importance of informing voters what person or group is bankrolling the political speech in advertisements,” said Paul S. Ryan, Campaign Legal Center Senior Counsel. “It is long past time for the Commission to return to and complete the rulemaking it proposed in 2011 on disclaimer requirements for Internet advertisements and to also address advertising utilizing Internet-connected emerging technologies such as smartphones. These technologies should not be exempted and the Commission needs to make the applicable disclaimer specifications clear, instead of wasting considerable time and resources repeatedly answering advisory opinion requests on this topic.”

To read the comments filed today by the Campaign Legal Center and Democracy 21, click here.

The Campaign Legal Center’s latest Voting Rights Institute training takes place today in Columbus, Ohio to train the next generation of voting rights lawyers.  At the session, co-hosted by American Constitution Society, practitioners and law students will learn the ins and outs of the enforcement of voting rights law.  Cases brought to enforce Section 2 of the Voting Rights Act, and the Fourteenth and Fifteenth Amendments to the Constitution will be a particular focus of the training.  

The half-day training program, taught by some of the most respected voting rights practitioners in the country, will count toward Continuing Legal Education (CLE).  This will be the second Institute training held outside of Washington, DC.  The first was held in January in New York and another is scheduled next month in Atlanta.

“The Supreme Court in its Shelby County decision drastically altered voting rights in America, significantly disadvantaging voters in the courts, but cases must be brought to protect the rights of all Americans to vote and a new generation of litigators must be trained to bring these cases,” said J. Gerald Hebert, Executive Director of the Campaign Legal Center.  “To understand this pressing need for new litigators, one need look no further than the wake of the Shelby County decision which has seen laws passed by states and municipalities across the country to curb the voting rights of Americans.  The Legal Center’s Voting Rights Institute is working to replenish the ranks of voting rights litigators for the inevitable battles ahead.”

Experts in the field will provide background on the Voting Rights Act and relevant federal court cases to participants and will then focus on the mechanics of litigating voting rights cases.  The Voting Rights Act will be covered in detail and participants will learn how it impacts voting rights laws on a state-by-state basis.  Participants will learn the skills needed to litigate voting rights cases from seasoned litigators who have brought these cases, in many instances for decades.  Legal Center’s Executive Director J. Gerald Hebert, serves as lead instructor and is joined by veteran voting rights litigators, appellate advocates, and scholars in the field.

In addition to Mr. Hebert, the Institute’s expert faculty will include: Daniel Tokaji, (Robert M. Duncan/Jones Day Designated Professor of Law, The Ohio State University Moritz College of Law); Don McTigue (Managing Attorney, McTigue & McGinnis LLC & Adjunct Professor at Capital University Law School); Thomas Saenz (President and General Counsel, Mexican American Legal Defense and Educational Fund); and Marcia Blanco-Johnson (Co-Director, Voting Rights Project, Lawyers’ Committee for Civil Rights Under Law).

Financial support from the Rockefeller Brothers Fund (rbf.org) and the Wallace Global Fund for the Voting Rights Institute is gratefully acknowledged.  

To read the full agenda for the Columbus training, click here.

The Campaign Legal Center is one of seven nonprofit organizations around the world to receive the 2014 MacArthur Award for Creative and Effective Institutions. The Award, which was announced today, recognizes exceptional nonprofit organizations who have demonstrated creativity and impact, and invests in their long-term sustainability with sizable one-time grants. 

The Campaign Legal Center is recognized for its work in reducing the influence of money in the political system, strengthening voting rights, and regulating lobbying. By doing so, the Legal Center works to strengthen the institutions and practice of American democracy through its work in the courts and with legislative, administrative and regulatory bodies across the country as well as through its work educating the public and helping to encourage and train a new generation of voting rights attorneys.

"At the Campaign Legal Center, we work hard to better the working of our democracy, and while we know that we do have an impact, we are truly humbled by this prestigious recognition of our work and by the generosity of the MacArthur Foundation," said Campaign Legal Center President Trevor Potter.  “We are incredibly grateful to the MacArthur Foundation for this strong vote of confidence in our work and for funding which will allow us to invest in the future work of the Campaign Legal Center.”

“From exposing human rights abuses in cyberspace to reducing the influence of money in American politics, the missions of these organizations are diverse,” said MacArthur President Robert Gallucci. “They share in common their demonstrated impact in improving the lives of people and communities. MacArthur hopes these investments will sustain and expand the reach of that impact.”

According to MacArthur, the Award is not only recognition for past leadership and success but also an investment in the future. The Campaign Legal Center will use its $750,000 MacArthur Award for Creative and Effective Institutions to build up its reserve fund and redesign its website.

For these Awards, the Foundation does not seek or accept nominations. To qualify, organizations must demonstrate exceptional creativity and effectiveness; have reached a critical or strategic point in their development; show strong leadership and stable financial management; have previously received MacArthur support; and engage in work central to one of MacArthur’s core programs.

Additional information about why MacArthur selected the Campaign Legal Center for the Award and to watch an overview video, click here.

Additional information about the other winning organizations, as well as overview videos about their work, is available at www.macfound.org/maceis.