Today, the Campaign Legal Center urged Members to support The Empowering Citizens Act (ECA), introduced in the 112th Congress by Representatives David Price (D-NC) and Chris Van Hollen (D-MD) to overhaul the way federal campaigns are financed.  In a letter to the House of Representatives, Legal Center Executive Director J. Gerald Hebert and Policy Director Meredith McGehee, touted the bill as the best measure currently pending in Congress that uses federal matching money to encourage small contributions to presidential and Congressional candidates.   The legislation also contains comprehensive reforms to reign in Super PACs.
 
The full text of the letter follows below.
 
December 4, 2012
 
Dear Representative:
 
The millions of dollars that Super PACs and so-called “dark money” groups poured into the 2012 federal elections raise serious questions about the health of our election system and the vitality of our democracy.  The Campaign Legal Center strongly urges you to support efforts to significantly overhaul the current federal campaign finance system by enacting new, meaningful incentives for smaller individual contributions. 
 
The Empowering Citizens Act (ECA), introduced in the 112th Congress by Representatives David Price (D-NC) and Chris Van Hollen (D-MD), is a vital reform and is the best measure currently pending in Congress that uses federal matching money to encourage small contributions to presidential and congressional candidates.  Equally important, the ECA contains the first comprehensive reform proposals to deal with Super PACs. 
 
Regardless of how you feel about the sheer magnitude of the money spent to influence the outcomes of the elections, there is no doubt that a system in which just one quarter of one percent (0.26%) of all Americans make a campaign contribution of $200 or more falls woefully short of engaging its citizens in a critical component of the democratic process – helping support the campaigns of the candidates they support.
 
Instead, the current system relies on – and is dominated by – large donors.  Only five percent of one percent (0.05%) of Americans give the maximum contribution to congressional candidates and only 0.01% give $10,000 total.  The rise of Super PACs has exacerbated the problem.  Some 200 individuals were responsible for 80% of all Super PAC contributions.  Moreover, “dark money” groups -- the (c)(4) social welfare organizations and the (c)(6) trade associations that do not disclose the sources of the funds – reportedly spent more than $200 million in the elections. 
 
The American people understand what is going on.  A recent poll found that one in four Americans say they are less likely to vote because big donors to Super PACs have greater influence over elected officials.  Nearly 70 percent of Americans believe Super PAC spending will lead to corruption.  As TheWashington Post recently editorialized, “Both the remarkable size of the checks written by big contributors in 2012 and the fact that a sizable chunk of the contributions was not publicly reported nurture a climate ripe for corruption.”
 
Democracy is strongest when citizens are informed and can more easily become engaged voters; and when public policies strengthen the principle of “one person, one vote” rather than undermine it as the current system does.  Criticizing the current process does not necessarily imply a belief that money is evil, or that money buys elections or that candidates for President or Congress are inherently corrupt.  Rather, as the Courts have repeatedly found, it recognizes that campaign contributions have the potential to corrupt and to create the appearance of corruption, as the evidence submitted to the Supreme Court in the McConnell v. FEC case demonstrated.  
 
The best way to achieve a healthier balance in our campaign finance system is to change the incentives for both candidates and donors.  The vast majority of incentives in the current system guide candidates to pursue large donations. In the last few months of the presidential campaign, candidates Romney and Obama were doing as many as five fundraisers a day.  Compare that to 1984 when President Ronald Reagan, who participated in the presidential public financing system, did zero fundraisers for his own reelection. There are few incentives for an individual who cannot afford to give thousands (or now millions) to contribute and feel, as the poll showed, that their contribution will make a difference in a system dominated by large money. 
 
The ECA addresses these issues head on. It is the most comprehensive campaign finance bill pending in Congress. The ECA provides new incentives focused on smaller donations. It is a system modeled on the successful matching system used to finance New York City elections.  Matching systems have a proven track record of success, and are notable for creating a system to leverage individual donations while allowing the political marketplace to continue to operate throughout the election period.
 
The ECA contains the first comprehensive proposals to deal with Super PACs, especially the candidate-specific Super PACs such as the ones that supported presidential candidates Mitt Romney and Barack Obama.  By defining such PACs to be coordinated parts of the campaign of specific candidates, they would be subject to candidate contribution limits.  The ECA also strengthens the law governing other outside groups’ coordination with candidates, prohibits federal candidates and campaigns from raising money for Super PACs while strengthening the ability of national parties to make coordinated expenditures with their candidates to respond to spending by Super PACs and other outside groups.
 
The Supreme Court’s Citizens United decision – which created a constitutional right for corporations to spend unlimited amounts independently of federal candidates or party committees – has been rightly criticized for its legal incoherence, judicial activism, naiveté of disclosure requirements for campaign spending, and equating of corporations with individuals.  It is therefore understandable that there is some support for efforts to overrule the decision through a constitutional amendment. Yet, the process for an amendment is arduous and long, and such an amendment is extremely difficult to write so that it indeed achieves its goals. 
 
In contrast, the ECA can be enacted quickly to address some of the most egregious problems in the system – both those created by the Court decision and those that have existed for years.
 
The Empowering Citizens Act deserves your support and provides an important starting point for the conversation – and action – that is so clearly called for after the 2012 elections.  Addressing a campaign finance system out of control must be a priority for both parties in the 113th Congress.
 
Sincerely,
                                                                        
J. Gerald Hebert                                             Meredith McGehee
Executive Director                                          Policy Director
 

The Campaign Legal Center today joined Democracy 21 in sending a letter to the IRS questioning why the agency’s lengthy list of priorities for the coming year does not include any reference to addressing the widespread abuse of privileged 501(c)(4) tax status by organizations that spent hundreds of millions of dollars on attack ads during the 2012 campaign.

“The see no evil ‘enforcement’ stance assumed by the IRS during the 2012 election with regard to 501(c)(4)s was shameful enough but now that the dust has settled the agency’s continued inaction would amount to a gross dereliction of its duties,” said J. Gerald Hebert, Legal Center Executive Director. “The agency must act to clarify its regulations and bring them into line with the laws passed by Congress which they are charged with enforcing. If the agency does not act, and act quickly, the outrageous abuses of the tax laws perpetrated by these shadow party committees masquerading as ‘social welfare’ groups will only grow and spread and further undermine public faith in our democratic process.”  

The Legal Center and Democracy 21 have jointly sent more than a dozen letters to the IRS outlining abuses of 501(c)(4) tax status by organizations like Crossroads GPS, and urging the agency to take action against them and also to initiate a rulemaking proceeding to clarify and bring into compliance with the law the IRS regulations governing campaign activities by groups claiming status as “social welfare” organizations. Today’s letter echoes those calls and requests a meeting with the Acting Commissioner and the Director of the Exempt Organization Division.

In a July 17, 2012 letter to the Legal Center and Democracy 21, the agency announced that it would consider proposed regulatory changes in the area of political activity by 501(c)(4) organizations.

To read the full letter sent today to the IRS, click here.

Today, the Campaign Legal Center filed an amicus curiae brief in the U.S. Court of Appeals for the Seventh Circuit, defending several provisions of the State of Wisconsin’s campaign finance disclosure law. The Legal Center submitted the brief in Wisconsin Right to Life (WRTL) v. Deininger with the assistance of Paul Smith of Jenner & Block.

“WRTL is asking the court to eviscerate virtually every type of meaningful disclosure for groups making independent expenditures in Wisconsin elections, and it is asking the court to do so by ignoring Supreme Court precedent, including the case the group brought in Wisconsin Right to Life v. Federal Election Commission,” said Tara Malloy, Legal Center Senior Counsel.  “This case is part of a nationwide litigation effort by groups seeking to undermine and eliminate disclosure laws at the local, state and federal level. Much of this litigation has been bankrolled by individuals looking to buy political influence while keeping their identities secret from the public. The courts however have long recognized the vital public interests of disclosure laws in ensuring voters can make informed decisions at the polls and in preventing corruption of elected officials.”  

Wisconsin Right to Life v. Deininger challenges several definitions in state law that implement Wisconsin’s political disclosure system as well as Wisconsin’s 24-hour reporting requirement for expenditures made close to an election and its requirement that a committee file an oath attesting that its independent disbursements are independent.

To read the Campaign Legal Center’s brief, click here.