Today, Representative Charles Rangel was found guilty of hubris.  Hubris in a powerful public official is especially damaging because it sends a message that a so-called public servant feels he is above the law.  Despite, or perhaps even because of, a long and distinguished career as a public servant, Representative Rangel did not take the rules House or even U.S. tax laws seriously enough to ensure that he was obeying them.  His disturbing pattern of violations showed he felt he was too busy and too important to be bothered with abiding by the rules.  He cared more about enjoying the privileges and perks of public office than apparently giving more than a passing thought to examining his own behavior and upholding the ethical standards of the institution he professes to love.  In the end he left his colleagues in the House little choice but to vote for his censure.

 Today’s vote does not show that the House ethics process is fixed.  The Committee, like the full House was left with virtually no alternative but to recommend censure in light of the facts.  But that recommendation and tonight’s vote should not be held up as an example of why the Office of Congressional Ethics is redundant.  It is not.  The OCE has served to wake the ethics committee from years of inaction by bringing transparency and by extension some semblance of accountability, to the ethics process.  If the OCE is done away with or weakened as many Members would prefer, the ethics process will be dragged back behind closed doors and inevitably the will be even more sad tales of hubris like Representative Rangel’s.

While it is potentially problematic any time the activist Roberts Court takes on a campaign finance case, the issues before the Court in the Arizona public financing case (McComish v Bennett) are narrow.

The Supreme Court’s decision to grant certiorari in the McComish case puts at issue the constitutionality of the payment of so-called “trigger” funds, which is a feature of some public financing schemes, such as the one used in Arizona.  Under trigger fund systems, candidates who decide to accept public financing receive public funds to pay for their campaigns and are subject to spending limits.  If such a candidate faces a candidate who declines public funds and who then spends more than the spending limit, the opt-in candidate receives additional public funds which are “triggered” by the opponent’s excess spending.  It is the constitutionality of that “trigger” funding which is at issue in McComish.  

To be certain, regardless of how the Court ultimately decides the relatively narrow issue before it in McComish, it will not mark the death of public financing.  As noted above, while some states like Arizona have public financing systems that use trigger funds, other states have successfully implemented public financing systems for decades without trigger funds. 

Further, the public financing system used in presidential elections does not contain a trigger funding provision.  Legislation to reform the presidential public financing system and legislation to extend public financing to congressional campaigns also do not contain trigger funding provisions. 

Under these types of public financing systems, opt-in candidates receive either grants or matching funds (or some combination of the two), and are permitted to raise an unlimited number of private contributions, all of which provide the resources necessary to respond effectively to a high-spending opt-out opponent.  Such public financing proposals would not be affected by a ruling in theMcComish case that declares trigger funding systems to be unconstitutional. 

Thus, while the McComish case is obviously important to the handful of states that have already enacted a “trigger” system, it is not relevant to the current public financing proposals being pursued nationally and in a number of states, including the proposals to fix the presidential public financing system and to create a public financing system for congressional races.

On the merits of the trigger provision at issue in McComish, the Court should uphold the Arizona law, because the challenged “trigger” provision merely provides opt-in candidates with additional public funds when they are opposed by high-spending privately-financed candidates and/or independent expenditures.  This increases their ability to speak without imposing any limits on the speech of their opponents. The challenged law places no restrictions on campaign fundraising or spending or speech, and we intend to make these points to the Supreme Court. 

Today’s verdict was an important victory for our democracy.   It proves that even highly placed government officials are accountable for their violations of law.  Our campaign finance laws are important to our system of self-government, and laundering money in an attempt to evade those laws undermines our democratic process.   In moving money around in order to use illegal corporate funds to elect candidates in Texas, Tom DeLay displayed a startling contempt for our laws and our democratic process. Initially, he even bragged about what he had done.  He should be punished accordingly. 

Today’s verdict however should be understood in the larger context.  Prosecutors in Travis County are to be commended for pressing on with their case over several years, even as the U.S. Department of Justice (DOJ) abruptly and inexplicably dropped its own investigation of DeLay (and a number of other Members of Congress implicated in a variety of public corruption scandals), despite a lengthy list of alleged federal violations.  Indeed, the decision by DOJ’s Public Integrity Section to drop its investigations of a number of Members of Congress appears to have been driven by the Department’s own scandal concerning prosecutorial misconduct in the case against former Sen. Ted Stevens.  If this is in fact the case, our democracy has been done a grave disservice.  

The American public feels our elected officials act above the law and are not held being held accountable.  Today’s verdict means justice is alive and well in Austin, Texas.  Now we just need to restore it here in Washington.

At a press conference this morning in front of the U.S. Capitol, six reform groups called on Congress to pass a ‘disclosure only’ version of the DISCLOSE Act during the ‘lame duck’ session of the 111th Congress. Such a stripped-down bill would take away the issues that drew criticism from opponents of the legislation. At the event Public Citizen also unveiled a new study of the significant drop in donor disclosure by outside groups during the 2010 election cycle.

The statement of Meredith McGehee from the event follows below:

The Campaign Legal Center joins in calling on the Senate to pass legislation in the lame duck session to require disclosure of independent political expenditures by corporations and unions made to influence the outcome of federal elections.  Such disclosure legislation is not only constitutional, but is the expected and indeed necessary counter-balance to the new and, in my view, unfortunate, corporate right to expend unlimited funds in U.S. elections.

Unrestricted corporate speech in elections without disclosure of those funding the speech is contrary to the Court’s theory in Citizens United v. FEC, which paired corporate First Amendment speech rights with the virtues of disclosure of the sources of such speech—disclosure to shareholders and to the general public.  Justice Kennedy’s 8-1 majority opinion, spanning the philosophical wings of the Court, said on this point:

The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way.  This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.

            Unfortunately nobody informed the voters who was footing the bill for the tens of millions of dollars in television advertising foisted on them by groups with patriotic sounding names.

Justice Kennedy’s majority opinion also made clear that it is generally constitutional to require disclosure of the sources of funding for spending in federal elections, whether or not that spending “expressly advocates” the election or defeat of a federal candidate.  He stated that the Court rejected the notion that disclosure requirements should be limited to “express advocacy,” and noted that the Supreme Court had, in a variety of contexts, upheld disclosure requirements that covered constitutionally protected acts, such as lobbying. “For these reasons,” Justice Kennedy stated, “we reject Citizens United’s contention that the disclosure requirements must be limited to speech that is the functional equivalent of express advocacy.”

            In addition, Justice Kennedy and seven other Justices were clear that they thought such disclosure was entirely appropriate and useful in a democracy.  He stated that disclosure of the sources of funding of political advertising “provide[s] the electorate with information” and “insure[s] that the voters are fully informed about the person or group who is speaking.”  He also cited the holding in Bellottithat “[i]dentification of the source of the advertising may be required as a means of disclosure, so that the people will be able to evaluate the arguments to which they are being subjected.”

            As to the value of disclosure of political speech, Justice Kennedy was equally clear.  He wrote:

With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.  Shareholders can determine whether their corporations political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.

Thus, Justice Kennedy binds together the two elements of his Opinion – independent corporate speech in elections is now protected by the First Amendment, and the funding sources of such speech must be fully disclosed in order to make this constitutional right function in our political system.  This section of Justice Kennedy’s Opinion was the only one joined by the four Citizens Uniteddissenters, meaning that the fundamental importance of disclosure was recognized by eight of the nine Justices. 

            Opponents of disclosure raise concerns about threats and intimidation. They cite NAACP v. State of Alabama, which found in the late 1950s that NAACP members were being exposed to “economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility,” and that, as a result, the organization should not be compelled to make its membership rolls public. They also refer to a case from the 1980s involving the Socialist Workers Party, which exempted the Party from campaign finance disclosure requirements because they had shown a reasonably probability of threats, harassment, etc. of their members if they were to be disclosed.  But the Socialist Workers case demonstrated that the Supreme Court already recognizes an exemption from disclosure when there is a very strong likelihood of violence or recrimination.  Neither of these cases stands against the proposition that disclosure should indeed be the general rule.  Therefore, opponents are raising an objection that has already been dealt with by the Court. 

While there is indeed little I may agree upon with Justice Scalia when it comes to the area of campaign finance, he has made clear that disclosure, in his view, is essential.  In the oral argument of Citizens United, he told the plaintiff’s lawyer, "You know, you can't run a democracy this way, with everybody being afraid of having his political positions known.”

Justice Scalia’s closing words in his concurrence in Doe v. Reed – decided afterCitizens United – concerning the disclosure of names on a ballot-referendum petition, reinforce the need for Congress to act to complete the process begun byCitizens United. 

In that case, he stated:

There are laws against threats and intimidation; and harsh criticism, short of unlawful action, is a price our people have traditionally been willing to pay for self-governance. Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed. For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously(McIntyre) and even exercises the direct democracy of initiative and referendum hidden from public scrutiny and protected from the accountability of criticism. This does not resemble the Home of the Brave.

Today the Campaign Legal Center and other reform groups urged Members of Congress to co-sponsor and push for passage of the “Stop Trading on Congressional Knowledge Act” (STOCK Act) designed to prevent congressional insider trading.  In separate letters to the full House and Senate the groups encouraged Members you to join as co-sponsors and help pass the STOCK Act expeditiously.  In the House the STOCK Act (H.R. 1148) was introduced by Reps. Timothy Walz (D-MN) and Louise Slaughter (D-NY).  A companion bill (S. 1871) has been introduced the Senate side Sens. Scott Brown (R-MA) and Marco Rubio (R-FL) and another is expected shortly from Sen. Sen. Kirsten Gillibrand (D-NY). 

"The STOCK Act deserves strong bipartisan support.  By design Congress is intended to be filled with citizen-legislators with outside interests, but that design shouldn’t be used by elected officials and their staffs as an excuse to cash in on the public trust,” said Meredith McGehee, Campaign Legal Center Policy Director.  “Members of Congress using insider information to enrich their private portfolios has drawn considerable public attention and disgust, and it will be politically difficult for Members to oppose this bill  -- at least publicly.  With approval levels hovering around 10%, Congress should act to make clear that they as legislators are not exempt from the insider trading laws that apply to the rest of us.”

The STOCK Act, the letter stresses, provides a balanced application of the laws against insider trading to both the private and public sectors and offers the important tool of disclosure for ensuring compliance with the law.

The organizations signing the letter include the Campaign Legal Center, Citizens for Responsibility and Ethics in Washington (CREW), Common Cause, Democracy 21, Public Citizen, Sunlight Foundation and U.S. PIRG.

The full text of the letter to the House follows below.

November 18, 2011

U.S. House of Representatives                                                          

Washington, D.C. 20515

RE:     Support the “Stop Trading on Congressional Knowledge Act” (H.R. 1148)

Dear Representative:

Our organizations – Campaign Legal Center, Citizens for Responsibility and Ethics in Washington, Common Cause, Democracy 21, Public Citizen, Sunlight Foundation and US PIRG  – strongly support passage of the “Stop Trading on Congressional Knowledge Act” (STOCK Act) designed to prevent congressional insider trading, and encourage you to join as a co-sponsor and help achieve its passage through Congress.  H.R. 1148 is principally sponsored by Reps. Timothy Walz (D-Minn.) and Louise Slaughter (D-N.Y.).

The legislation is gaining a great deal of momentum in just the last few days, following a “60 Minutes” program on the issue and a release of a new book by Peter Schweizer that documents congressional insider trading in detail. The number of co-sponsors on the House bill has increased more than five-fold this week, and a hearing has already been scheduled on the bill before the House Financial Services Committee. For the first time, companion bills are being introduced in the Senate by Sens. Scott Brown (R-Mass.), Kirsten Gillibrand (D-NY) and others.

Under current law, “insider trading” is defined as the buying or selling of securities or commodities based on non-public information in violation of confidentiality – either to the issuing company or the source of information. Congressional officials and employees in the course of official business, it is often believed, do not owe a duty of confidentiality to these companies and thus are not liable for insider trading.

H.R. 1148 provides a clear and balanced application of the laws against insider trading to both the private and public sectors and offers the important tool of disclosure for ensuring compliance with the law.

We encourage all members of the House to join in this bipartisan effort to apply the insider trading laws uniformly across Congress before any new scandals may arise. We urge you to join as co-sponsors.

Sincerely,

Campaign Legal Center

Citizens for Responsibility and Ethics in Washington

Common Cause

Democracy 21

Public Citizen

Sunlight Foundation

US PIRG