Today, the Campaign Legal Center submitted comments to the Securities and Exchange Commission (SEC) rebutting a series of gross mischaracterizations of law made by two major trade associations seeking to avoid disclosure of their donors whose money is used for political activities. In their comments to the SEC concerning a rulemaking petition filed by the Committee on Disclosure of Corporate Political Spending urging the SEC to require public companies to disclose their political spending to shareholders, the United States Chamber of Commerce and the American Petroleum Institute (API) offered incorrect and misleading information to the SEC, which the Legal Center debunks in its comments to the agency.

“In a desperate effort to stave off disclosing the corporations funding their increasingly sophisticated multi-million dollar political operations, the Chamber and API resorted to completely mischaracterizing pertinent laws including the Administrative Procedures Act, existing federal and state campaign finance disclosure laws, and even the constitutionality of the disclosure rule requested by the petitioners,” said Paul S. Ryan, Campaign Legal Center Senior Counsel. “When it comes to their claims concerning disclosure, these two organizations do not have a legal leg to stand on, which makes for a fascinating read if you are a fan of legal fiction. Again and again the U.S. Supreme Court has come down decisively and overwhelmingly in support of disclosure laws, recognizing the vital public interest in having an informed citizenry.”

The Legal Center urged the SEC to move forward with a Notice of Proposed Rulemaking concerning publicly traded company disclosure to shareholders of the use of corporate resources for political activities, noting that the Supreme Court inCitizens United explicitly highlighted the importance of shareholder disclosure. Eight of the Court’s nine members wrote in Citizens United: “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 corporation’s 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.”

To read the comments filed with the SEC by the Campaign Legal Center, click here.

Late Friday, a three-judge court in Washington, DC, granted a Voting Rights Act bailout to the State of New Hampshire, marking the first time since the 1982 amendments to the Voting Rights Act took effect that a state has bailed out from preclearance requirements of the Act. The bailout had assumed a higher profile when it was opposed by a conservative group seeking to undermine the defense of the Voting Rights Act before the U.S. Supreme Court in Shelby County v. United States.  The court denied the attempt by the Center for Individual Rights to intervene in the case on the grounds that the voter that the Center represented lacked standing.

“New Hampshire’s successful bailout shows that the coverage formula self-tailors, and therefore Section 5 coverage adjusts to current needs,” said Campaign Legal Center Executive Director J. Gerald Hebert, who serves as legal counsel to the State of New Hampshire in his capacity as a solo practitioner.  “New Hampshire's successful bailout effectively defeats the 'theory' advanced by Shelby County, Alabama in its pending challenge to the constitutionality of the Voting Rights Act that the bailout provisions are illusory or unworkable."  Hebert credited state and local officials in New Hampshire for assembling the record that entitled the state and its ten covered towns to bail out.   

To read the consent judgment and decree, click here.

To read the joint motion to enter consent judgment and decree, click here.  To read the proposed consent judgment and decree, click here.

The Campaign Legal Center filed a friend of the Court brief in Shelby County v. United States.  To read the brief, click here.

Late Friday, a three-judge court in Washington, DC, granted a Voting Rights Act bailout to the State of New Hampshire, marking the first time since the 1982 amendments to the Voting Rights Act took effect that a state has bailed out from preclearance requirements of the Act. The bailout had assumed a higher profile when it was opposed by a conservative group seeking to undermine the defense of the Voting Rights Act before the U.S. Supreme Court in Shelby County v. United States.  The court denied the attempt by the Center for Individual Rights to intervene in the case on the grounds that the voter that the Center represented lacked standing.

“New Hampshire’s successful bailout shows that the coverage formula self-tailors, and therefore Section 5 coverage adjusts to current needs,” said Campaign Legal Center Executive Director J. Gerald Hebert, who serves as legal counsel to the State of New Hampshire in his capacity as a solo practitioner.  “New Hampshire's successful bailout effectively defeats the 'theory' advanced by Shelby County, Alabama in its pending challenge to the constitutionality of the Voting Rights Act that the bailout provisions are illusory or unworkable."  Hebert credited state and local officials in New Hampshire for assembling the record that entitled the state and its ten covered towns to bail out.   

To read the consent judgment and decree, click here.

To read the joint motion to enter consent judgment and decree, click here.  To read the proposed consent judgment and decree, click here.

The Campaign Legal Center filed a friend of the Court brief in Shelby County v. United States.  To read the brief, click here.

Today, the Campaign Legal Center, joined by Democracy 21, filed comments with the Federal Election Commission supporting a draft rule interpreting disclosure requirements for political committee expenditures and urging the Commission to require even more detailed disclosure of payments by a committee’s vendor to subvendors on behalf of that committee.

“When a vendor such as a campaign consultant spends money on behalf of a committee through payments to subvendors, such as a payment to an ad production company and a payment to a TV station, these payments to the production company and TV station should each be disclosed, but the FEC has not been requiring such disclosure,” said Paul S. Ryan, Campaign Legal Center Senior Counsel. “Instead, in such scenarios, the FEC has only been requiring committees to report the lump-sum payment to the consultant, which leaves voters in the dark about how committees are actually spending campaign dollars. The FEC can and should fix this disclosure problem.”

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

Today, the Campaign Legal Center, joined by Democracy 21 and Public Citizen, filed an amici brief in Wagner v. FEC opposing an effort to overturn the 70-year-old ban on campaign contributions by federal contractors. The case is currently on appeal to the U.S. Court of Appeals for the District of Columbia after a federal district court upheld the ban in November of 2012.

“Government contracting is particularly susceptible to the pay-to-play system that prevails anywhere government contracts are handed out. This federal ban is a crucial check against the widespread scandals that have sent government officials to jail in cities and states across the country,” said Tara Malloy, Campaign Legal Center Senior Counsel. “Only the naïve or disingenuous will pretend that money does not change hands in order to buy influence and favor with those who write government checks, from Sacramento to Tallahassee and everywhere in between. The courts have long recognized the inherent susceptibility of the government contracting process and have repeatedly upheld this law and similar laws passed in states and municipalities nationwide. The plaintiffs ask the court to ignore those rulings and the reality of government contracting.”

This restriction on campaign contributions from persons and entities contracting with the federal government was enacted in 1940 to address corruption in federal contracting in the wake of persistent scandals, most notably the “Democratic campaign book” scandal.

In November 2012, the district court granted summary judgment in favor of the FEC, finding that the law was enacted to “prevent corruption and the appearance thereof and, in so doing, to protect the integrity of the electoral system by ensuring that federal contracts were awarded based on merit.” The Campaign Legal Center and Democracy 21 filed a brief in the district court defending the constitutionality of the government contractor ban and in support of the FEC’s motion for summary judgment.

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

To read the District Court opinion granting summary judgment, click here.

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.