Today, the Supreme Court declined to hear a challenge to the century-old federal ban on corporate contributions to candidates and political parties in U.S. v Danielczyk.   Despite a clearly activist and deregulatory bent on campaign finance matters under Chief Justice John Roberts, the High Court let stand a circuit court decision upholding the ban.

“We are pleased the Court chose not to revisit the century-old corporate contribution ban, which is an important bulwark against use of the corporate form to circumvent the contribution limits and to funnel corporate money directly into campaign coffers. But the Court’s record on campaign finance matters remains abysmal and its fingerprints are all over the disastrous flood of money into our elections that has followed its Citizens United decision,” said Campaign Legal Center Senior Counsel Tara Malloy. “Today’s decision does nothing to mitigate the Court’s disturbing decision last week to revisit the aggregate contribution limits passed in the wake of the Watergate scandals, which if overturned would enable individual to make contributions of one-two- or even three-million dollars to buy influence in Washington. But at least today the Court has decided to stay its deregulatory hand.”  

The Tillman Act, which originally banned corporate political contributions, was signed into law by President Teddy Roosevelt in 1907 in the midst of an era marked by political corruption and campaign finance scandals.  Repeatedly since then, the ban has been upheld by the Supreme Court (most recently in 2003 in FEC v Beaumont). 

The case, U.S. v. Danielczyk, was a criminal matter involving numerous allegations of campaign finance violations, including that the defendants illegally directed corporate contributions to Hillary Clinton’s 2008 Presidential campaign.

In July 2012, the U.S. Court of Appeals for the Fourth Circuit upheld the longstanding ban on corporate political contributions.

To read the amicus brief filed by the Campaign Legal Center and Democracy 21 in the Fourth Circuit Court of Appeals, click here. 

To read the decision of the Fourth Circuit Court of Appeals, click here. 

Today, unfortunately, the U.S. Supreme Court agreed to hear a challenge brought to the aggregate federal contribution limits, noting probable jurisdiction in McCutcheon v. FEC.  The case, brought by plaintiffs Shaun McCutcheon and the Republican National Committee (RNC), challenges both the $70,800 aggregate limit on contributions to non-candidate committees and the $46,200 aggregate limit on contributions to candidate committees in a two-year election cycle.

In September of 2012, a three-judge panel in the U.S. District Court for the District of Columbia concluded that the aggregate limits are justified, and rejected the arguments of the plaintiff that the limits are unconstitutionally low and unconstitutionally overbroad.

“It is troubling that the Supreme Court has chosen to hear this challenge, but it has become readily apparent that there are a number of Justices who are willing to usurp Congress’s role as legislator when it comes to matter of campaign finance,” said Tara Malloy, Campaign Legal Center Senior Counsel.  “An aggregate contribution limit was passed in the wake of the Watergate money scandals and was upheld in the 1976 Supreme Court decision Buckley v. Valeo.  If the current aggregate limits were to be struck down, one-, two- and even three-million dollars in contributions could easily be funneled by a single donor to his or her party and candidates of choice. Corruption, or at the very least the appearance of corruption, would be the rule rather than the exception in Washington.”

To read the amici brief filed by the Campaign Legal Center and Democracy 21, in defense of the aggregate limits, click here.

To read the District Court's decision upholding the aggregate contribution limits, click here.

Reform groups sent a letter today to the Office of Congressional Ethics (OCE) urging the agency to avoid the procedural minefield of rules changes proposed recently by several private attorneys.

The reform groups include the Campaign Legal Center, Citizens for Responsibility and Ethics in Washington (CREW), Common Cause, Democracy 21, League of Women Voters, National Legal and Policy Center, Public Citizen, Sunlight Foundation and U.S. PIRG.

On February 4, 2013, several private attorneys who represent clients before the OCE objected to its implementation of rules without a public hearing and suggested a series of rules changes that would burden the OCE’s ability to carry out its mission.

According to the reform group’s letter sent today:

“The rules changes suggested by these attorneys in a February 4, 2013, letter to OCE are inappropriate for OCE as currently structured and would impede the agency’s ability to make the ethics process more accountable and transparent.”

The reform groups pointed out that the OCE is merely a fact-finding agency with no authority to compel testimony, determine guilt or innocence, or in any way judge a case. The agency screens out frivolous cases and compiles useful information for the House Ethics Committee, if it is decided that further investigation is warranted.

The letter notes:

“OCE is not an investigative subcommittee of Congress, it is not a prosecutorial agency, and it should not be treated as one. The attorneys propose that the agency’s fact-finding mission be bound by burdensome procedural rules allowing the attorneys to challenge OCE at each step of compiling information. Worse yet, the attorneys propose that OCE not be allowed to consider, or take note of, in its fact-finding record the refusal of potential witnesses to participate in an investigation – tying the hands of the agency and blinding it at the same time.”

The letter concludes:

“Given its limited authority, OCE has done a remarkable job in making the congressional ethics process more active, accountable and transparent. … We urge you to reject the recommendations submitted to you in the attorneys’ letter of February 4th, which would undermine OCE’s ability to carry out the responsibilities assigned to the agency by the House of Representatives.”

To read the full letter from the reform groups, click here.

To read the letter sent by the private attorneys, click here.

Today, the Campaign Legal Center, joined by Democracy 21, filed an amici brief with the U.S. Court of Appeals for the Tenth Circuit in the latest of a long line of challenges to federal disclosure laws.  Free Speech v. FEC is a challenge to the “subpart (b)” definition of “expressly advocating” (11 C.F.R. § 100.22(b)), as well as the Federal Election Commission’s (FEC) methodology for determining when a group has campaign activity as its “major purpose,” an important step in the larger determination of political committee status.

The subpart (b) definition of express advocacy is crucial because it captures sham issue ads that do not say “vote for” or “vote against” a candidate, but “could only be interpreted by a reasonable person as containing advocacy of the election or defeat of one or more clearly identified candidate(s).”

“This suit, like many others before it, ignores Supreme Court precedent upholding disclosure laws by overwhelming margins. Again and again the Court has recognized the compelling public interest in disclosing the groups or individuals seeking to buy influence with candidates and officeholders,” said Tara Malloy, Campaign Legal Center Senior Counsel.  “In particular the Free Speech brief ignores altogether the Supreme Court decision in Wisconsin Right to Life v. FEC in which the Court articulated its own test for the ‘functional equivalent of express advocacy’ which is virtually identical to the test being challenged in the Free Speech case.”

This case is part of a flood of litigation nationwide challenging state, local and federal disclosure laws in an attempt to undermine transparency in the political process. Most recently, the Fourth Circuit Court of Appeals rejected a similar challenge to the same regulations in Real Truth About Abortion v. FEC.

Free Speech began its challenge in March of 2012, by submitting an advisory opinion request to the FEC proposing to run a series of attack ads without registering as a political committee or complying with the disclosure requirements for political committees. Not getting the answer it wanted, the group filed suit against the regulations in the U.S. District Court for the District of Wyoming.  The Campaign Legal Center, joined by Democracy 21, filed comments with the FEC and an amici brief with the court in opposition. In October 2012 the District Court refused to grant the injunction citing a “wall of precedent” upholding disclosure laws.

The Legal Center and Democracy 21 were aided in this litigation by Larry B. Jones of Simpson, Kepler & Edwards, LLC, the Cody, Wyoming Division of Burg Simpson Eldredge Hersh & Jardine, P.C.

To read the brief filed today in the Court of Appeals by the Campaign Legal Center and Democracy 21, click here.

To read the order in the District Court, click here.

Today, the Campaign Legal Center filed an amici brief to defend the constitutionality of Section 5 of the Voting Rights Act in Shelby County v. Holder on behalf of several jurisdictions that have bailed out under the Act by demonstrating a record of non-discrimination.

Under the challenged provisions, certain “covered” states and localities, predominantly in the South, must obtain Justice Department approval, or “preclearance,” before changing any election practice or procedure, such as moving polling locations or altering voting districts. However, if those jurisdictions can demonstrate that they have had a clean record of voting practices over a ten-year period and have taken additional steps to ensure non-discriminatory elections, they are permitted to “bail out” of this preclearance requirement.

The amici brief refutes a string of inaccuracies put forth by the petitioner, Shelby County, Alabama, regarding the burdens of the bailout process. The amici curiae Washington County, VA, the General Registrar of Voters of Essex County, VA and the City of Kings Mountain, NC explain that the bailout process to terminate coverage is financially feasible, and neither cumbersome nor complicated.  The brief further highlights that Shelby County itself would apparently not qualify for a bailout due to a past violation of the Voting Rights Act by a city within the county.

“The covered jurisdictions from Virginia and North Carolina speak from experience in stating that the bailout provisions are neither onerous nor cost-prohibitive despite the claims of Shelby County,” said Tara Malloy, Campaign Legal Center Senior Counsel. “Beyond the exaggerated claims of the hardships of the bailout process, the violations of the Voting Rights Act committed by the City of Calera in Shelby County are exactly the type of actions these provisions within the Act are designed to prevent in order to protect minority voters.”

The Legal Center’s brief also chronicles the history of the “bailout” provisions, arguing that bailout serves to tailor the coverage of Section 5 and ensures that the preclearance requirement is a valid exercise of Congress’s authority under the Fourteenth and Fifteenth Amendments.

“The bailout mechanism updates the geographic scope of the special provisions on an ongoing basis, and provides further assurances that Section 5 is a congruent and proportional means to ensure our elections are free of discrimination.” said Ms. Malloy.

Oral argument before the Supreme Court is scheduled for February 27.

To read the brief, click here.

The Campaign Legal Center today joined with ten reform groups to urge newly installed House Administration Committee Chair Rep. Candice Miller (R-MI) to hold hearings early in the 113th Congress to examine potential legislative solutions to repair the a campaign finance system run amok in the wake of the Supreme Court’s Citizens United decision. The letter emphasized the broad public support for repairing the damage done to our democratic process by big donors and secret contributions.

Hearings were urged to discuss the myriad abuses of the current system in the 2012 elections that saw an explosion of outside money including hundreds of millions of dollars laundered through shell corporations and opaque tax-exempt organization leaving open the question of whether foreign funds might have been used to influence our elections. Further the letter urged hearings on proposed legislation to expand donor disclosure and bills designed enhance the role of small donors

The full text of the letter follows below. 

Public Campaign * Americans for Campaign Reform * Campaign Legal Center * Citizens for Responsibility and Ethics in Washington (CREW) * Common Cause * Democracy 21 * Democracy Matters * Demos * Public Citizen * Rootstrikers * U.S. Public Interest Research Group (PIRG)

The Honorable Candice Miller, Chairwoman
Committee on House Administration
1309 Longworth House Office Building
Washington, DC 20515

January 30, 2013

Dear Chairwoman Miller:

As the chair of the Committee on House Administration, we want to congratulate you on your new role and look forward to working with you and your staff.

In the first presidential election cycle since the Supreme Court’s Citizens United decision, an estimated $6 billion was spent, with more than $1 billion coming from non‐party outside groups. By some accounts, approximately 31 percent of outside spending was funded by “secret” undisclosed donors.

We are writing to request that you hold hearings early in the 113th Congress on the Citizens United decision to examine potential legislative solutions to a system out of control, including consideration of disclosure reforms. According to a Greenberg Quinlan Rosner poll, nearly two‐thirds of 2012 voters (including 71 percent of Democrats, 67 percent of Independents, and 54 percent of Republicans) said that big donors and secret money undermined democracy in this election.

There are a number of questions that your Committee should examine in light of the 2012 elections. These include: Was any of that undisclosed money spent by special interests trying to get favorable treatment for pending legislation before Congress? Did “shell” organizations form just to spend money in elections and then disband immediately afterward to try to hide information from voters? Did foreign corporations that are hostile to U.S. interests spend money trying to influence public policy?

The hearings should also address the proliferation of political spending by ultrawealthy individuals and special interest‐backed super PACs. Nearly 60 percent of super PAC funding came from just 159 donors contributing at least $1 million, according to a Demos‐US PIRG report. In House races, just 0.14 percent of Americans made itemized contributions to congressional candidates. Various proposals (the Grassroots Democracy Act, Fair Elections Now Act, and Empowering Citizens Act) that would enhance the role of small donors should be analyzed to ensure that we have “government of the many, not of the money.”

For our democracy to flourish, we must find new, meaningful ways for average citizens to have a stronger voice in the process, and citizens have a right – and a need – to know who is spending money to influence the outcome of our elections.

Thank you for your consideration. Please feel free to contact Aaron Scherb ([email protected] or 202‐736‐5726) with any questions, and we look forward to your response.

Sincerely,
 
Nick Nyhart
President and CEO
Public Campaign
 
Meredith McGehee
Policy Director
Campaign Legal Center
 
Lisa Gilbert
Director, Congress Watch
Public Citizen
 
Joan Mandle
Executive Director
Democracy Matters
 
Lawrence Noble
President and CEO
Americans for Campaign Reform
 
Adam Lioz
Counsel
Demos
 
Blair Bowie
Democracy Advocate
U.S. Public Interest Research Group
 
Fred Wertheimer
President
Democracy 21
 
Karen Hobert Flynn
Senior Vice President for Strategy and Programs
Common Cause
 
Lawrence Lessig
Founder
Rootstrikers
 
Melanie Sloan
Executive Director
Citizens for Responsibility and Ethics in Washington
 
cc: Ranking Member Congressman Robert Brady