Today, the Campaign Legal Center, urged Senators to support passage of a public corruption amendment to the “Stop Trading on Congressional Knowledge Act” (STOCK Act) which prohibits congressional insider trading. The bipartisan amendment (1483) has bicameral support and contains the key provisions of the “Public Corruption Prosecution Improvements Act,” sponsored by Senators Patrick Leahy (D-VT) and John Cornyn (R-TX).  These provisions to update the illegal gratuities and honest services statutes have already passed out of the Senate and House Judiciary Committees and have bipartisan support in the U.S. House of Representatives. The letter sent to every Senator also urges them to oppose any amendments to weaken the legislation.

The full text of the letter to Senators follows below.

January 31, 2012

Dear Senator:

The Campaign Legal Center—a nonpartisan, nonprofit organization that works in the areas of campaign finance and elections, political communication, and government ethics—strongly urges you to support passage of Amendment 1483 to S.2038, the Stop Trading on Congressional Knowledge Act.  This bipartisan amendment with bicameral support contains the key provisions in the “Public Corruption Prosecution Improvements Act,” sponsored by Senators Patrick Leahy (D-VT) and John Cornyn (R-TX).  These provisions to update the illegal gratuities and honest services statutes have been passed out of the Senate and House Judiciary Committees, and also have bipartisan support in the U.S. House of Representatives.

We also urge you to oppose any effort to strip the provisions for electronic filing of Senate campaign reports, a long-overdue move that seeks to bring the Senate filing practices in line with other federal candidates, and to pass the STOCK Act without any changes that weaken the legislation.

The Leahy-Cornyn amendment would restore important tools for federal prosecutors to fight public corruption that have gradually been pared away by adverse court decisions.  These provisions are vitally important if prosecutors are to stand any chance of holding public officials accountable for most public corruption.  Most public officials are not foolish enough to jot down a price list for earmarks on a cocktail napkin like former Rep. Randy 'Duke' Cunningham (R-CA), but a series of court rulings have stripped prosecutors of important anti-corruption tools other than the bribery statute, which requires a quid pro quo. 

The Leahy-Cornyn amendment responds to the Supreme Court’s 2010 decision in Skilling v. United States, which eliminated an entire category of deceptive, fraudulent, and corrupt conduct from the Honest Services fraud statute.  It would restore that statute in line with Court's direction for more clarity.  In addition, the bill would restore the illegal gratuities statute so that public officials may not accept gifts given because of their governmental position and makes clear that public officials who accept private compensation for using the powers their jobs afford them may now be subject to prosecution.  With this statute significantly compromised by the Court, prosecutors have had their hand weakened and have had to turn to other statutes not as well-suited to prosecute public corruption. 

Opposition to these much-needed changes is sometimes cloaked in the guise of concerns about over-criminalizing politics.  This red herring argument does not merit support and should be dismissed.  This legislation is too important to fall victim to Congress’ reticence to pass carefully considered measures to hold Members accountable for behavior that is corrupt and undermines public confidence in government.  With record low approval ratings, it is vital for Congress to show its willingness to get serious about combating public corruption.

The Campaign Legal Center urges you to support the Leahy-Cornyn amendment, to support electronic filing for Senate candidates and to pass the STOCK Act without changes that weaken the legislation.

Sincerely,

Meredith McGehee 
Policy Director

Today, the Campaign Legal Center, and a coalition of reform groups, urged the Senate to vote in favor of the “Stop Trading on Congressional Knowledge Act” (STOCK Act) when it is brought to the floor for a vote next week.  The letter sent to every Senator also urges them to oppose any amendments to weaken the legislation.

The STOCK Act received a groundswell of congressional support after a scathing CBS News “60 Minutes” piece on congressional insider trading was aired in November.  Spurred by public outrage, scores of Members signed on as cosponsors to Senate and House bills within days of the story running.

“Constituents were rightly outraged to learn that Members of Congress appeared to have used their congressional insider knowledge to enrich themselves during the stock market collapse. The public was equally angered to learn that the practice was not already illegal and as a result read the riot act to their elected representatives,” said Meredith McGehee, Campaign Legal Center Policy Director.  “Americans have every right to be appalled by this conduct and Congress should act quickly to pass this legislation and begin repairing public faith in Congress which has reached a low ebb.”

A Gallup poll released a month after the story aired found that Americans view of the honesty and ethical standards of Members of Congress had sunk below those of telemarketers, car salespeople and even lobbyists to tie an all-time low for any profession.  Sixty-four percent of Americans rated the honesty and ethical standards of Members of Congress as "low" or "very low," equaling the record "low"/"very low" rating for any profession since Gallup began this ranking in 1976.  The record low rating matched by Congress was previously held exclusively by lobbyists in a 2008 poll.  To view the Gallup poll, click here.

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

The full text of the letter to Senators follows below.

U.S. Senate                                                                                                     January 27, 2012

Washington, D.C. 20510

Pass the “Stop Trading on Congressional Knowledge Act”

Dear Senator:

Our organizations – Campaign Legal Center, Citizens for Responsibility and Ethics in Washington, Common Cause, Democracy 21, Public Citizen, Sunlight Foundation, U.S. PIRG – strongly support passage of the “Stop Trading on Congressional Knowledge Act” (STOCK Act) designed to prevent congressional insider trading.

We strongly urge you to vote for this important reform legislation when it is brought to the Senate floor next week and to oppose any amendments to weaken the legislation.

The STOCK Act being submitted to the Senate next week clarifies for the first time that Members of Congress and their staff are subject to the same laws against insider trading that apply to the rest of America.

In addition to specifying that it is against the law for Congress to trade on non-public information gleaned through the course of official business, the STOCK Act also creates an important system of real-time transparency of stock trading activity by members and staff. These transparency provisions are an integral and very important part of the legislation.

President Barack Obama has said he will sign the legislation as soon as it gets to his desk.

We urge you to move expeditiously to enact the legislation without any undermining amendments.

Vote ‘YES’ on the STOCK Act.

Sincerely,

Campaign Legal Center

Citizens for Responsibility and Ethics in Washington

Common Cause

Democracy 21

Public Citizen

Sunlight Foundation

U.S. PIRG

Today, the Campaign Legal Center and a broad coalition of civic organizations launched a petition – following a process set up by the White House – to pressure President Obama to get off the sidelines by appointing new commissioners to the Federal Election Commission (FEC). The administration has promised to respond to petitions receiving at least 25,000 signatures.

The presidential primary season is in full swing, with millions of dollars pouring in to fund misleading ads.  The agency charged with holding back the deluge – the Federal Election Commission (FEC) – is a dysfunctional mess.  Three of the six commissioners staunchly refuse to enforce the law, and five of the six are serving despite expired terms.

The petition urges the President to act quickly to nominate replacements for all five commissioners serving expired terms.

To read the petition, click here.

Below is a statement by Legal Center Policy Director Meredith McGehee and a copy of the submission itself.

Statement of Meredith McGehee: 

“This petition is an effort to force President Obama’s hand to act.  The Federal Election Commission as currently composed is simply refusing to enforce the laws on the books.  The Commission has even crafted additional loopholes to water down existing campaign finance laws. 

“While the courts did plenty to create this mess with the ruling in the Citizens United case and another case involving a group called SpeechNow, the FEC bears much responsibility for making a bad situation disastrous.  With Super PACs running amok, the Republican presidential primary is exhibit A of a system out of control, and the FEC is complicit in this auctioning of the White House.

“We recognize that one of the reasons the President has been reluctant to talk much about campaign finance issues – much less do anything about them – is that he will be opening himself up to attacks of hypocrisy.  After all, he is raising money hand-over-first for his reelection, in anticipation of an onslaught of attacks from Super PACs and close associates have formed their own Super PAC to support his re-election.  In 2008 President Obama was the only major party candidate to refuse to participate in any part of the presidential public financing system.

“But he also made support of campaign finance reform a big part of his message in 2008. 

Unfortunately, once in office, it has been all talk and no action, even on the one matter he can move on unilaterally – nominating new FEC Commissioners.

“Having named the head of the new Consumer Protection Agency and new members of the National Labor Relations Board, action on the FEC is long overdue.  Whether you are a Tea Partier who shares Sarah Palin’s concern about crony capitalism, or you are an Occupy sympathizer who grasps that only .5% of Americans are in the game when it comes to making campaign contributions, and or you are moderate who believes government should work efficiently and without special-interest influence, you should care that the FEC is essentially AWOL – an agency that has abdicated its mission.  And the result is damaging our democracy at its most fundamental levels.” 

To sign or read the petition, click here.

The text of the petition follows below.

We petition the Obama administration to:

Nominate New Commissioners to the Federal Election Commission (FEC).

We expect candidates for federal office to follow our campaign finance laws, but the FEC – the agency charged with enforcing those laws -- is completely dysfunctional.

Three of the six commissioners staunchly refuse to enforce the law and five of the six are serving despite expired terms.

Prior to your election, you professed support for campaign finance reform. We agree with you that the Citizens United Supreme Court decision was disastrous and the failure of Congress to require disclosure of campaign-related spending was outrageous. 

Nevertheless, you have failed to appoint new commissioners who actually would enforce such laws.

To restore some faith into the democratic process, we urge you to nominate new commissioners to the FEC prior to the 2012 elections.  

Today, the U.S. Supreme Court summarily affirmed a ruling by a three-judge district court in Bluman v. Federal Election Commission which had upheld the federal ban on campaign contributions and independent expenditures by foreign nationals temporarily residing in the United States. 

“We are pleased by the decision from the Supreme Court to affirm the lower court ruling and its recognition that certain restrictions on even independent expenditures are constitutional in federal and state elections,” Tara Malloy, Legal Center Associate Counsel, stated. 

“But there seems to be a serious doctrinal inconsistency between Bluman and the Supreme Court’s earlier decision in Citizens United.   In Citizens United, the narrow, 5-4 majority expressed the extremely naïve view that independent expenditures were essentially harmless and could not corrupt or even lead to the appearance of corruption of our elections.  Yet today, the Court took a step back from that decision and upheld a much broader ban on both contributions and expenditures by foreign nationals.” 

“The staggering sums being raised and spent ‘independently’ by close family, friends and associates of the candidates in Iowa and other early primary and caucus states make a mockery of the Court’s assumption in Citizens Untied ruling that independent expenditures have no influence over candidates and officeholders.  Perhaps today’s order from the Court is some indication that the Court is aware its Citizens United ruling has unleashed unprecedented flood of undisclosed money into our body politic and perverted our elections.”

Today the Campaign Legal Center, together with Democracy 21, will file a complaint urging the Federal Election Commission (FEC) to investigate possible violations of campaign finance law by presidential candidate Rick Perry’s campaign committee, RickPerry.org, and the Perry-supporting Super PAC Make Us Great Again.

Based on published media reports, the Campaign Legal Center believes that Make Us Great Again produced video footage of Rick Perry and gave that video footage to Perry’s campaign without charge.  Such a gift of video footage would be an in-kind “contribution” from Make Us Great Again to RickPerry.org likely exceeding the $2,500 candidate contribution limit and violating the outright ban on Super PAC contributions to candidates.

“For decades, federal law has recognized that giving something of value to a candidate—like video footage—is the same thing as giving money to the candidate,” said Campaign Legal Center attorney Paul S. Ryan.  “The Perry campaign is prohibited from accepting such in-kind contributions with a value exceeding the $2,500 contribution limit and, further, Super PACs are prohibited altogether from making contributions to candidates.  It appears the Perry campaign and Make Us Great Again likely violated these laws and the FEC needs to investigate.”

“Presidential candidate Super PACs are simply vehicles for presidential candidates and big donors to circumvent the candidate contribution limits enacted to prevent corruption,” said Democracy 21 President Fred Wertheimer.  “The candidate-specific Super PAC is the most dangerous vehicle for corruption in American politics today.”

On November 26, Politico reported: “In its Thanksgiving video, the [Perry] campaign uses two clips from an [sic] slickly produced advertisement aired on Perry’s behalf by Make Us Great Again, a Super PAC run by a longtime Perry associate, Mike Toomey.”  The article was later updated to note a third clip that first appeared in the Make Us Great Again ad and then later appeared in the RickPerry.org ad.  Politico’s website included both the Make Us Great Again ad and the RickPerry.org ad.  The fact that three identical video clips were used in the two ads is obvious.

“Super PACs are out there raising unlimited contributions from individuals, corporations and labor unions based on the already-suspect legal theory that they can’t corrupt candidates because they don’t make contributions to them,” said Ryan.  “This type of video sharing makes a mockery of the contribution limits and the notion that Super PACs are independent of candidates.  The FEC must investigate and crack down on Perry and Make Us Great Again if the Super PAC gave this video footage to the campaign.”

“The use by the Perry presidential campaign of the same video footage contained in an ad run by the Super PAC supporting Governor Perry raises serious concerns about whether the Super PAC is really independent from the Perry campaign, as required by law,” added Wertheimer.  “This matter requires an FEC investigation to determine if the campaign finance laws have been violated.”

The Campaign Legal Center took the lead in preparing this complaint. To read the complaint, click here.

Today, the Campaign Legal Center filed an amicus brief to support Florida’s “electioneering communications” disclosure law with the Eleventh Circuit Court of Appeals in National Organization for Marriage (NOM) v. Browning.  The case is the latest in a string of challenges to disclosure laws across the country.

Although the Supreme Court has repeatedly and unequivocally endorsed the constitutionality of political transparency – as recently as its 2010 decision inCitizens United – disclosure laws at the federal and state level are under unprecedented attack, “said Tara Malloy Campaign Legal Center Associate Legal Counsel.  “In fact, NOM itself has challenged the disclosure laws of Maine, New York and Rhode Island in addition to this Florida-based suit.” 

The Florida statute under challenge requires groups to register and report if they make over $5,000 of electioneering communications in a calendar year.  In August 8, 2011, a Florida district court upheld the law, and NOM appealed the decision to the Eleventh Circuit.

“Interestingly this organization, and others like it, faces no restrictions as to how it raises and spends money for ‘electioneering communications’ to influence Florida election outcomes, but the group also wants to do it anonymously.  The group and its lawyers are mistakenly trying to equate freedom of speech with what amounts to freedom to run anonymous attack ads against candidates,” added Malloy.  “Fortunately this challenge is built largely on smoke and mirrors and asks the Court of Appeals in essence to overrule a number of recent 8-1 Supreme Court decisions affirming the constitutionality of disclosure.”

In the NOM v. Browning case, NOM argues that the state definition of “electioneering communication” is vague because it includes the “appeal to vote” test devised by the Supreme Court in its 2007 decision in Wisconsin Right to Life v. FEC.  NOM also claims that Florida’s disclosure requirements are so onerous as to warrant strict scrutiny review, although Citizens United held that the federal electioneering communications disclosure law was constitutional under “exacting scrutiny.” 

To read the brief, click here.