Statement of Trevor Potter, President of Campaign Legal Center and former FEC Chairman and Fred Wertheimer, President of Democracy 21

Recent press reports have revealed the formation of a new "Republican Super PAC" whose planned operations would appear to violate multiple federal campaign finance laws because of the involvement of members of the RNC in establishing and controlling the PAC and because of the planned use of federal officeholders and candidates to solicit unlimited contributions for the PAC.  Such solicitations by federal officeholders and candidates are explicitly prohibited by provisions of the Bipartisan Campaign Reform Act that have been upheld by the Supreme Court.

According to recent press reports, three members of the Republican National Committee - Indiana RNC Committeeman James Bopp Jr, Oregon RNC Committeeman Solomon Yue and Louisiana State party Chairman Roger Villere - have established a new political committee called “Republican Super PAC.”

They have indicated that the purpose of this PAC is to make independent expenditures in federal elections and that it will use funds solicited in unlimited amounts by, among others, federal candidates who will benefit from those expenditures.  

In our view, the proposed efforts of this RNC “shadow group” would violate multiple provisions of the federal campaign finance laws.  

First, this constitutes an illegal scheme to violate the ban on the raising or spending of soft money by national party committees. Second, the proposed activities would violate the ban on federal officeholders soliciting unlimited soft money donations in connection with a federal election.  Each of these bans has been upheld by the Supreme Court, and neither of them was affected by the Court’s decision in Citizens United.

Indeed, in RNC v. FEC, Mr. Bopp failed in his attempt to overturn the decision inMcConnell v. FEC, which upheld the constitutionality of  both the ban on political party soft money and the ban on federal officeholders and candidates soliciting unlimited contributions.  

Mr. Bopp urged a three-judge lower court to declare provisions of the soft money ban unconstitutional but the lower court unanimously rejected the argument and the Supreme Court last year summarily affirmed the lower court decision. The party soft money ban remains the law.

Mr. Bopp is now apparently attempting to ignore the statutory ban on political party soft money and to overturn by fiat the Supreme Court decision.

The soft money ban prohibits the RNC “or any officer or agent acting on behalf of ” the RNC or “any entity that is directly or indirectly established, financed, maintained or controlled” by the RNC from soliciting, receiving, spending or directing to another person any contributions that are not subject to the limitations, prohibitions and reporting requirements of the law.

The “Republican Super PAC” has been set up by three members of the RNC, including Mr. Bopp, who is, according to press reports, unveiling the scheme in a presentation to all RNC members tomorrow. 

Press reports also indicate that party officials and agents will raise funds for the “Republican Super PAC,” in unlimited amounts.  According to an article inPOLITICO:

“We are not going to do any fundraising,” Bopp told POLITICO. “We are harnessing the fundraising operations of those entities, the RNC and all the state parties and federal candidates, who will be raising money first for themselves and then they would tell their donors, if they have extra money, to send it to the Republican Super PAC.”

Given these circumstances, this PAC is exactly the type of group that is described by the law as an entity “that is directly or indirectly established, financed, maintained or controlled” by a national party committee and that is a group controlled by “agents” of the RNC who are acting on behalf of the RNC.

As such, the soft money ban applies directly to “Republican Super PAC” and the PAC is subject to the contribution limits that apply to national party committees. It would be illegal for the PAC to accept, or for any agent of the national party to solicit, a contribution in excess of the limits that apply to contributions that can be accepted by the national parties.

RNC Chairman Reince Priebus should be on notice that it would be a violation of law for the RNC and “Republican Super PAC” to solicit or receive any corporate or labor union contributions, and a violation of the law for the RNC and "Republican SuperPac" to solicit or receive contributions from an individual that in the aggregate exceed $30,800 per year.

Mr. Bopp has also said that he intends to have federal candidates solicit unlimited funds for “Republican Super PAC.”

Every member of Congress and every federal candidate should be on notice that it would be a violation of the law for them to solicit unlimited contributions for “Republican Super PAC” or for any other Super PAC.

According to press reports, “Republican Super PAC” is taking the position that it is intending to make only “independent” expenditures, and therefore can accept contributions that are not subject to any limitations. (The DC Circuit Court of Appeals held in SpeechNow v. FEC that contributions to an independent expenditure-only PAC are not subject to contribution limits).  

The federal campaign finance law prohibits federal officeholders and candidates from soliciting or directing any funds in connection with a federal election “unless the funds are subject to the limitations, prohibitions and reporting requirements” of the law.  

If “Republican Super PAC” raises unlimited contributions under SpeechNow, it will be raising funds that are not “subject to the limitations” of the federal law.  

Even if it is permissible for “Republican Super PAC” to accept such unlimited funds, it is not permissible for federal candidates and officeholders to solicit such funds as they are not “subject to the limitations” of the federal law.

Any contrary view would lead to the absurd and obviously corrupting result that an incumbent federal officeholder can solicit a $1 million or $5 million donation to “Republican Super PAC” with the understanding that the PAC will then spend the money on “independent” expenditures to benefit that officeholder.

The D.C. Circuit in the SpeechNow case found that a PAC which makes only independent expenditures can accept unlimited contributions on the grounds that such contributions do not pose any threat of corruption. SpeechNow, however, said it operated wholly independently of candidates and parties, and the court did not consider a situation where the contributions raised by the PAC are to be solicited by federal candidates. There is nothing in the court’s opinion to suggest that it would permit solicitations of unlimited amounts by federal candidates.

Federal law prohibits federal candidates and officeholders from soliciting funds that are not subject to any contribution limit.  That provision was upheld by the Supreme Court in the McConnell case and even Justice Kennedy - who otherwise dissented in that case, and who subsequently authored the Citizens Uniteddecision-  said this solicitation ban was the one provision that “satisfies Buckley’santicorruption rationale and the First Amendment guarantee.”  

As Justice Kennedy wrote, “The making of a solicited gift is a quid both to the recipient of the money and to the one who solicits the payment (by granting his request).  Rules governing candidates’ or officeholders’ solicitation of contributions are, therefore, regulations governing their receipt of quids. This regulation fits under Buckley’s anticorruption rationale.”

Any federal candidate or officeholder who solicits unlimited contributions to the “Republican Super PAC” or any other super PAC will be violating federal law.

Today, in a 2-1 opinion, the Eighth Circuit Court of Appeals affirmed that Minnesota Citizens Concerned for Life (MCCL) was unlikely to prevail in its challenge to Minnesota’s comprehensive disclosure requirements for independent expenditures and the state restriction on direct corporate contributions to state candidates and political parties.

“This is good news for Minnesota and for the health of campaign finance law in the post-Citizens United era,” Legal Center Associate Legal Counsel Tara Malloy stated.  “The Minnesota case is but one of the dozens of legal challenges to campaign finance laws that were filed in a wave of litigation from coast to coast following the High Court’s Citizens United decision.  In light of the many pending challenges, we are pleased that the Eighth Circuit has joined the Ninth Circuit and many lower courts in the last year to hold that strong disclosure laws for independent expenditures are constitutional.”

In September 2010, the district court in MCCL v. Swanson denied the plaintiffs’ motion for a preliminary injunction, and plaintiffs appealed this decision in to the Eighth Circuit.  In their challenge, the plaintiffs rely on the Supreme Court’s decision in Citizens United to attack Minnesota’s restriction on corporate contributions and its state disclosure requirements.

The Eighth Circuit, however, rejected plaintiffs’ argument that Citizens United cast doubt on the constitutionality of restrictions on corporate contributions and the continuing validity of the Supreme Court’s 2003 Beaumont v. FEC decision.  Further, the Court of Appeals also rejected the contention that Minnesota’s disclosure law was a “functional ban on corporate independent expenditures,” noting that the law in no way prevented corporations from using their treasury funds for independent expenditures, but rather simply required some measure of transparency in connection to such spending.

On December 22, 2010, the Campaign Legal Center, along with Democracy 21, filed an amici brief with the Eighth Circuit.  To read the brief filed by the Campaign Legal Center and Democracy 21, click here.

To read today’s opinion, click here.

On Wednesday, May 4, 2011 groups representing more than 30 organizations held a press conference on Capitol Hill in support of a draft White House executive order to require disclosure of secret political spending by government contractors.  The organizations urged President Obama to promptly sign the executive order and unveiled a citizens’ petition and letter to be delivered to the White House.

The press conference addressed the vast amount of disinformation leveled at the draft executive order since it was leaked last month to opponents of the executive order. 

Associate Legal Counsel Tara Malloy provided remarks on behalf of the Campaign Legal Center at this event.  She highlighted the history of secret money spent to influence the election of candidates in our democracy and noted that, "Unsurprisingly, the U.S. Supreme Court has shown very little tolerance for the argument that the First Amendment requires that campaign contributions and expenditures remain anonymous.  Nevertheless, opponents of President Obama’s April 13th draft executive order, apparently lacking any objections to the order on its merits, have resorted to attacking its constitutionality.  But they conveniently disregard the Supreme Court’s longstanding and consistent support for campaign finance disclosure both as a means to combat political corruption and to ensure a well-informed electorate."

Click here to view her full remarks.

Today, the Campaign Legal Center joined a number of organizations in urging the Federal Communications Commission (FCC) to hold broadcasters accountable for using publicly-owned spectrum effectively and to gauge any adverse public impacts from broadcast service losses resulting from spectrum repurposing.   

The groups filed reply comments in the FCC’s notice of proposed rulemaking in Innovation in the Broadcast Television Bands: Allocations, Channel Sharing and Improvements to VHF.  The comments emphasize the need for the Commission to collect data to assess the impact of broadcast service loss and not relax the ownership rules to support its channel sharing proposal.

The groups signing the reply comments included the Office of Communication of the United Church of Christ, Inc., Media Alliance, National Organization for Women, the Benton Foundation, and The Campaign Legal Center and the Institute for Public Representation of Georgetown University Law Center

To read the full letter, click here.

Senator John Ensign is right to resign.  His conduct was reprehensible. The problem, of course, is that these shenanigans were not simply Senator Ensign’s private affairs, but were entangled in his official position and the operations of his Senate office and included apparent violations of revolving door rules.  Certainly, the standards of behavior he set did not reflect creditably on the institution, and his resignation is welcome and overdue.

With the Justice Department and Federal Election Commission having punted, it is critically important that the Ethics Committee follow through on their statement to complete this investigation so that the accurate, complete story can be made public.  Otherwise, the mud will have been swept under the rug.

This case should be used as a reminder that, when the Office of Congressional Ethics was established by the U.S. House of Representatives, the Senate refused to follow suit.  That is much to the “upper” body’s discredit.  The OCE has provided a means to investigate matters expeditiously and, at least so far, with credibility.  The Senate should reconsider its rejection of such an investigative body.

For too long, the Senate ethics process has operated under the guidance of “Let he who is without sin cast the first stone.”  The process remains opaque and an outside investigative office is needed to bring credibility and integrity to the process.

Today, Representative Chris Van Hollen (D-MD) filed a lawsuit against the Federal Election Commission in federal district court in Washington, DC, challenging an FEC regulation that has improperly narrowed the scope of McCain-Feingold law disclosure requirements and allowed nonprofit 501(c)(4) advocacy groups, 501(c)(6) business associations, and others to spend millions on “electioneering communication” while keeping secret the donors whose funds are used to pay for the ads.

Representative Van Hollen also filed a petition at the FEC today requesting that the Commission conduct an expedited rulemaking to revise and amend an existing FEC “independent expenditure” disclosure regulation that has similarly allowed groups to millions of dollars in “independent expenditures” while keeping secret the donors whose funds are used to pay for the ads.

The Campaign Legal Center is part of Representative Van Hollen’s pro bonolegal team, led by Roger Witten of the law firm WilmerHale and Fred Wertheimer of Democracy 21.

“In 2007, the FEC gutted McCain-Feingold disclosure requirements in a little-noticed rulemaking,” according to J. Gerry Hebert, Executive Director of the Campaign Legal Center.  “The flood of corporate political spending unleashed by the Supreme Court’s 2010 ruling in Citizens United made clear the impact of 2007 FEC regulation changes as untold millions of corporate dollars were funneled through the Chamber of Commerce and other groups to avoid disclosure of the source of the funds,” Hebert stated.

“Without effective action to close the disclosure loophole opened by the FEC, the American people will continue to remain in the dark about tens of millions of dollars being provided by corporations and others to buy influence over government decisions,” Hebert said.

To read the complaint, click here.  To read the rulemaking petition, click here.