- Fourth Circuit Overturns Decision That Struck Down Century-Old Law Banning Corporate Contributions to Candidates & Parties
- Legal Center Executive Director Represents Disenfranchised Voters in Texas Voter ID Trial
- Rep. Van Hollen Files Brief in Appeal to Successful Challenge to Political Ad Donor Disclosure Regs
- RNC Court Challenge to Aggregate Contribution Limits Opposed by Reformers
- DISCLOSE Act of 2012 Fails to Overcome Filibuster in the Senate
- IRS to Consider Changes to 501(c)(4) Eligibility Rules
- Government Watchdog Groups Press Mitt Romney to Reveal Bundler Information
Fourth Circuit Overturns Decision That Struck Down Century-Old Law Banning Corporate Contributions to Candidates & Parties
On June 28, in U.S. v Danielczyk, the U.S. Court of Appeals for the Fourth Circuit reversed a district court decision which had ignored U.S. Supreme Court precedent in order to strike down the century-old federal ban on corporate contributions to candidates and political parties. The Campaign Legal Center and Democracy 21 filed an amici brief in the Fourth Circuit urging the court to uphold the ban.
The corporate contribution restriction dates to the Tillman Act of 1907, signed into law by President Teddy Roosevelt in an era marked by political corruption and campaign finance scandals. The ban on corporate political contributions has been upheld repeatedly by the Supreme Court in the intervening decades, most recently in FEC v Beaumont in 2003. The May 2011 decision striking down the law, issued by Judge Cacheris of the U.S. District Court of the Eastern District of Virginia, had failed to consider or even cite Beaumont. When the omission led to widespread criticism, Judge Cacheris ordered a rebriefing of the case, but eventually reaffirmed his earlier decision, essentially disregarding the Beaumont precedent again.
“We are pleased the Fourth Circuit corrected the gross judicial overreach by the lower court,” said Campaign Legal Center Senior Counsel Tara Malloy. “In Citizens United and this week in the Montana decision, the Supreme Court may have turned a blind eye toward the potential for corruption, or its appearance, posed by ‘independent expenditures.’ But the Supreme Court and the lower courts have been very clear in affirming the constitutionality of the ban on direct corporate contributions.”
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.
To read the brief filed by the Campaign Legal Center and Democracy 21, click here.
To read the decision, click here.
Legal Center Executive Director Represents Disenfranchised Voters in Texas Voter ID Trial
From July 9-13, the trial concerning a controversial Texas Voter ID law was held before a three judge panel in the federal court in Washington, DC. Campaign Legal Center Executive Director J. Gerald Hebert was part of the legal team defending against the State of Texas’ effort to gain approval of a new photo ID bill in Texas v. Attorney General Eric Holder. Hebert represents a group of Texas voters who have intervened in the suit on the side of U.S. Department of Justice claiming they will be harmed by the new voter ID bill.
The U.S. Department of Justice (DOJ) determined the new law would harm minority voters and concluded that the state did not prove the absence of racial purpose and effect. Consequently, DOJ declined to grant the photo ID law preclearance under Section 5 of the Voting Rights Act. Under Section 5, Texas and a number of other jurisdictions with histories of voter discrimination are required to seek the approval of the Justice Department or a federal court in Washington DC in order to make changes to their voting procedures. Texas filed suit in the DC court seeking preclearance of the voter ID bill.
The State’s suit also challenges the constitutionality of Section 5 of the Voting Rights Act. Several jurisdictions have challenged Section 5 in recent years. Earlier this year the U.S. Court of Appeals for the District of Columbia Circuit upheld Section 5 in a challenge filed by Shelby County, Alabama.
A decision is expected in August.
Rep. Van Hollen Files Brief in Appeal to Successful Challenge to Political Ad Donor Disclosure Regs
On July 20, Representative Chris Van Hollen (D-MD) filed a brief in the U.S. Court of Appeals for the District of Columbia urging the court to uphold a lower court ruling in Van Hollen v. FEC that requires comprehensive disclosure of donors to groups making “electioneering communications.”
Rep. Van Hollen successfully challenged a Federal Election Commission (FEC) regulation that improperly narrowed the scope of the McCain-Feingold law’s donor disclosure requirements allowing nonprofit 501(c)(4) advocacy groups, 501(c)(6) business associations, and others to spend tens of millions of dollars on “electioneering communication” without disclosing the donors to the groups paying for the ads.
“The law passed by Congress clearly requires disclosure of the funders for groups making ‘electioneering communications,’ yet the FEC ignored both the letter and intent of the law and in effect made the disclosure provision optional,” stated Paul S. Ryan, Campaign Legal Center Senior Counsel. “The lower court rightly condemned this gutting of the law as it is not the job of a regulatory agency to rewrite the laws passed by Congress but instead to promulgate rules that implement the statutes as they were written.”
On March 30, 2012, the U.S. District Court for the District of Columbia ruled for Rep. Van Hollen and struck down the FEC regulation that allowed spenders to hide their donors, holding that it was arbitrary, capricious and contrary to the federal campaign finance statute it purports to implement. The FEC did not to appeal the decision, but an appeal was filed by two corporate funded non-profit groups that have intervened in the case.
To read the brief, click here.
RNC Court Challenge to Aggregate Contribution Limits Opposed by Reformers
On July 10, the Campaign Legal Center, together with Democracy 21, filed an amici brief in the U.S. District Court for the District of Columbia to defend the aggregate contribution limits against a challenge brought by the Republican National Committee (RNC) and Shaun McCutcheon. Despite clear Supreme Court precedent upholding aggregate contribution limits, plaintiffs in McCutcheon v. FEC challenged both the $70,800 aggregate limit on contributions to non-candidate committees and the $46,200 aggregate limit on contributions to candidate committees in a two-year election cycle.
“In the Supreme Court decision in Buckley v. Valeo, the Court explicitly held that an aggregate limit is constitutional, yet this suit asks the court to ignore settled precedent and allow individuals to give seven-figure sums to buy influence in Washington every election cycle,” said Tara Malloy, Campaign Legal Center Senior Counsel. “To argue that allowing millions of dollars of contributions to candidate and party committees – money that could be funneled back in to the campaigns of particular candidates – would not lead to corruption or the appearance of corruption is laughable.”
The Campaign Legal Center, along with Democracy 21, previously filed comments opposing an Advisory Opinion Request (AOR 2012-14) filed by plaintiff McCutcheon with the Federal Election Commission (FEC), in which he asked the agency to permit him to make contributions exceeding the aggregate contribution limits. McCutcheon filed his current lawsuit after the FEC issued an advisory opinion consistent with the comments filed by the Campaign Legal Center and Democracy 21, which argued that federal campaign finance law prohibited him from making contributions to federal candidates in excess of the aggregate limits in the 2011-2012 election cycle.
To read the brief filed today with the three-judge panel, click here.
To read the full text of the FEC Advisory Opinion, click here.
DISCLOSE Act of 2012 Fails to Overcome Filibuster in the Senate
In two votes on July 16 and 17, the DISCLOSE Act of 2012 (S. 3369), which would require disclosure of political spending, failed to collect the 60 votes in the Senate needed to invoke cloture and move to consideration. The vote was 53 – 45 in favor of cloture on July 17 and 51 – 44 in favor on July 16.
“The vote was disappointing, but not unexpected. No matter how many times Senate Minority Leader Mitch McConnell (R-KY) and his colleagues are willing to say it on the Senate floor, the First Amendment does not guarantee the right of anyone to anonymously spend millions of dollars picking winners and losers in federal elections,” said Meredith McGehee, Policy Director for the Campaign Legal Center. “This issue is not going away and neither is the effort to ensure transparency. Secrecy in campaign finance is a precursor to scandal. After the 2012 elections, there will be a renewed effort to foster the bipartisan support that transparency deserves.”
Prior to the vote, the Legal Center sent a letter to all 100 Senators, explaining the bill in detail and urging them to support it. This letter was quoted extensively on the floor by Senators in favor of the bill. The Legal Center also contributed to a letter sent to members of the Senate by 11 reform groups and another sent by 156 organizations. Additionally, the Legal Center hosted a breakfast briefing for reporters and Senate staffers to discuss what the bill would do and clarify misinformation about the DISCLOSE Act.
The DISCLOSE Act of 2012 would require any “covered organization” — a corporation, labor union, 501(c) organization (other than a (c)(3)), Super PAC and section 527 organization — that spends $10,000 or more on a “campaign-related disbursement” to file a disclosure report with the Federal Election Commission (FEC) within 24 hours of the spending, and to file a new report each time an additional $10,000 or more is spent. The FEC would have then been required to post the report on its website within 24 hours of receipt.
In an effort to encourage Republican support for the legislation, Sen. Sheldon Whitehouse (D-RI) modified a similar 2012 bill to remove the disclaimer provisions and shift the effective date of the proposed legislation until after the 2012 election. No Republicans, however, broke ranks to support the bill.
To read the letter sent by the Legal Center to Senators, click here.
On July 23, the Campaign Legal Center joined Democracy 21 in responding to an Internal Revenue Service (IRS) letter stating that the agency will consider changes to regulations governing 501(c)(4) tax status eligibility. The organizations previously filed a rulemaking petition on the matter with the IRS, calling on the agency to adopt new regulations making clear that 501(c)(4) organizations may engage in no more than an insubstantial amount of candidate election activity—far less than the amount currently conducted by many high-profile organizations claiming 501(c)(4) tax-exempt status.
On July 17, Lois Lerner, IRS Director of the Exempt Organizations Division, replied in a letter that the IRS “will consider proposed changes” in eligibility regulations for section 501(c)(4) tax-exempt groups. The tax status has been widely misused by organizations that have spent tens of millions of dollars on political advertising in battleground states largely attacking candidates for federal office.
“We are encouraged that the IRS has recognized the threat posed by these shadow party committees that are using a privileged tax status to keep secret the names of donors who are pumping tens of millions of dollars into our federal elections in an attempt to pick the winners and losers on Election Day,” said J. Gerald Hebert, Executive Director of the Campaign Legal Center. “We hope that the IRS will proceed quickly and effectively in curbing this wholesale abuse of the tax code for partisan political ends.”
In the July 23 letter, the Campaign Legal Center and Democracy 21 again strongly urged the IRS to promptly institute a rulemaking proceeding to address the widespread abuse of the 501(c)(4) tax status and to take measures “in the interim to stop the blatant abuses of the tax laws that are resulting in massive amounts of secret money being laundered into our national elections by groups claiming to be ‘social welfare’ organizations.”
Since initially filing a rulemaking petition in July 2011, the Campaign Legal Center and Democracy 21 have on multiple occasions written to the IRS to challenge the eligibility for 501(c)(4) tax status of a number of Republican and Democratic affiliated groups, including Crossroads GPS, Priorities USA, American Action Network and Americans Elect.
To read the letter sent by the Campaign Legal Center and Democracy 21, click here.
To read the IRS letter responding to both organizations, click here.
Government Watchdog Groups Press Mitt Romney to Reveal Bundler Information
On July 16, the Campaign Legal Center joined with the Center for Responsive Politics and six other transparency advocates and good government groups to launch a petition drive requesting that GOP presidential nominee Mitt Romney disclose the names of the “bundlers” who help raise millions of dollars for his campaign. Every Democratic and Republican presidential nominee since 2000 has publicly released and updated lists of their bundlers. So far, Romney has disclosed the legal minimum, just the 25 bundlers who are also federally registered lobbyists.
The groups joining with the Legal Center and the Center for Responsive Politics in the petition drive include Common Cause, Democracy21, League of Women Voters of the United States, Public Citizen, Sunlight Foundation and U.S. PIRG.
President Obama’s campaign has been releasing the names of all of his bundlers, with updates. As of July 15, he had disclosed 532 bundlers, none of whom are federal lobbyists.
Click here to view the petition.