- Supreme Court Urged to Let Stand Lower Court Decision Upholding Montana’s Corporate Expenditure Restriction
- Legal Center President Joins with Other Elections Officials in Brief Supporting Montana’s Corporate Expenditure Restriction
- Funders of Electioneering Communications Must be Revealed: Appeals Court Denies Stay
- Challenge to Florida’s Political Disclosure Law Rejected by 11th Circuit
- Oral Argument in Corporate Contributions Case
- Legal Center Debunks U.S. Chamber of Commerce Criticisms of DISCLOSE Act in Senate Letter
- Legal Center and 37 Other Organizations Urge Senators to Vote for DISCLOSE Act of 2012
- Legal Center Challenges Latest Attempt by Outside Group to Skirt Disclosure Laws
- FEC Issues Advisory Opinion Upholding Aggregate Contribution Limits As Urged By CLC
- FCC Vows to Fight Broadcaster Suit to Keep Public Files Offline
- Legal Center Files FEC Complaint Against Rep. Towns for Personal Use of Campaign Funds
- New Crossroads GPS Information Submitted to IRS by Watchdogs Concerning Violations of Tax Status
- Legal Center Distributes Overview of Court Challenges to Campaign Finance & Disclosure Laws Nationwide
- Legal Center President Addresses the Campaign Finance Crisis in Speech to the American Law Institute Annual Meeting
- CLC Senior Counsel Speaks at National Institute on Money in State Politics Annual Meeting
- Trevor Potter Hosts Conference Board Event on Corporate Political Activity
- Legal Center President Addresses Stanford Policy Forum
Supreme Court Urged to Let Stand Lower Court Decision Upholding Montana’s Corporate Expenditure Restriction
On May 18, the Campaign Legal Center, joined by more than a dozen other organizations, urged the U.S. Supreme Court to let stand a lower court ruling upholding Montana’s restrictions on corporate expenditures in elections. The groups filed an amici brief in support of Montana urging the U.S. Supreme Court to deny certiorari, or if it grants certiorari, to reconsider its holding in Citizens United that independent expenditures do not result in corruption or the appearance of corruption.
“Montana has a long history of corporate exploitation of its political bodies, resulting in corruption so rampant as to help lead to the passage of the 17thAmendment to the U.S. Constitution. Unsurprisingly, its highest court recognized the danger inherent in lifting the corporate spending restrictions,” said Tara Malloy, Campaign Legal Center Senior Counsel. “If the Supreme Court chooses not to uphold the state Supreme Court ruling then it should grant certiorari and revisit the practical application of its own Citizens United ruling, which at the least, has led to the anonymous funding of shadow campaigns by special interests, and at worst, may result in outright corruption and political quid pro quos.”
The Legal Center website has briefs from both sides in the case, including a joint brief from Senator John McCain (R-AZ) and Senator Sheldon Whitehouse (D-RI). The brief filed by the Legal Center a focuses on three primary points that undermine the rationale behind the Citizens United decision to allow corporations and unions to make independent expenditures. First, amici argue that existing law accommodates relationships so close that “independent expenditures” are not in reality independent. Second, the brief illustrates that current tax and campaign finance laws enable corporations to deny citizens the information necessary to “hold corporations and elected officials accountable and make informed decisions on Election Day.” Last, even when there is disclosure of independent spending, campaign finance data is often neither accessible nor timely enough to allow voters to make informed decisions at the polls.
To read the Legal Center brief, click here.
To read other briefs in the case, click here.
Legal Center President Joins with Other Elections Officials in Brief Supporting Montana’s Corporate Expenditure Restriction
On May 18, Legal Center President Trevor Potter joined with a number of former federal, state and local election officials in filing an amicus brief with the U.S. Supreme Court in support of Montana’s ban on corporate expenditures in elections, which is being challenged in American Tradition Partnership v. Bullock.
The brief urges the Court to deny the petition for certiorari, or if it grants the petition, to reconsider its holding in Citizens United v. FEC that independent expenditures do not result in corruption or the appearance of corruption.
“The political reality that has emerged since the Citizens United decision leaves no doubt that independent expenditures can and do lead to corruption or at the very least the appearance of corruption,” said Trevor Potter, President of the Campaign Legal Center. “One need look no further than the rise of candidate-specific Super PACs to see that the Court’s decision has seriously weakened candidate contribution limits. These entities, run by close allies of candidates and endorsed by the candidates themselves, are running shadow campaigns funded by multi-million dollar contributions thousands of times the $2,500 legal limit for campaign contributions.”
In the filing, Potter is joined by fellow former Federal Election Commission (FEC) Chairman Frank Reiche, two former FEC General Counsels, Larry Noble and Charles Steele, former Director and General Counsel of the Connecticut Elections Enforcement Commission, Jeffrey Garfield, former Executive Director of the New York City Campaign Finance Board, Nicole Gordon, and former General Counsel of the California Fair Political Practices Commission, Robert Stern.
To read the brief filed by Trevor Potter and other elections officials, click here.
Funders of Electioneering Communications Must be Revealed: Appeals Court Denies Stay
On May 14, a three-judge panel of the D.C. Circuit Court of Appeals denied a motion to stay a lower court ruling in Van Hollen v. FEC that requires comprehensive disclosure of funders for groups making “electioneering communications.” Millions of dollars have already been spent this cycle on electioneering communications and those funding them will now have to be revealed.
“This is a huge victory for voters, for disclosure, and for democracy because Americans deserve to know who is trying to buy results in our elections,” said Trevor Potter, Campaign Legal Center President. “This decision is an important step towards fulfilling the Supreme Court's promise in Citizens United that all spending in our elections will be fully disclosed -- disclosure that has been frustrated until now by the FEC.”
The case was brought by Representative Chris Van Hollen (D-MD) to challenge a 2007 FEC regulation that narrowed the scope of federal disclosure requirements connected to electioneering communications. The Legal Center and Democracy 21 are part of Rep. Van Hollen’s pro bono legal team, led by Roger Witten of the law firm WilmerHale.
“Electioneering communications” are broadcast advertisements that name a candidate and air within 30 days of a primary election or 60 days of a general election. Groups making electioneering communications are now required to disclose all their donors of more than $1,000 or establish and use a segregated fund for electioneering communications.
On April 26, 2012, the FEC announced that it would not appeal the district court decision. However, the two 501(c)(4) groups that have intervened in the case appealed the decision to the D.C. Circuit Court of Appeals and moved both the district court and the Court of Appeals to stay the district court decision pending their appeal. On April 27, 2012, the district court denied the motion for a stay.
To read the Circuit Court’s order, click here.
To read the District Court filings and decision, click here.
Challenge to Florida’s Political Disclosure Law Rejected by 11th Circuit
On May 17, the Eleventh Circuit Court of Appeals upheld Florida’s “electioneering communications” disclosure law in National Organization for Marriage (NOM) v. Sec. State of Florida in a per curiam decision.
The Florida statute under challenge requires groups to register and report as an “electioneering communications organization” if they make over $5,000 of electioneering communications in a calendar year. In August 8, 2011, a Florida district court upheld the law, finding that the disclosure requirements were neither vague nor overbroad, and the Eleventh Circuit affirmed this decision.
“Although the Supreme Court strongly endorsed the value of political transparency in Citizens United, disclosure laws at both the federal and state levels remain under fire,” said Tara Malloy, Campaign Legal Center Senior Counsel. “We are pleased to see the Eleventh Circuit joining the First and Ninth Circuits in supporting the comprehensive disclosure of independent campaign spending in the post-Citizens United era.”
The case is the latest in a series of constitutional challenges to disclosure laws across the country. Currently, the laws of over a dozen states, as well as the federal disclosure requirements applicable to independent spending, are being litigated.
On December 15, 2011, the Campaign Legal Center filed an amicus brief with the Eleventh Circuit in support of Florida’s electioneering communications disclosure law.
To read the decision, click here.
To read the Campaign Legal Center brief, click here.
Oral Argument in Corporate Contributions Case
On May 18, the Fourth Circuit Court of Appeals heard oral argument in U.S. v. Danielczyk, an appeal of a controversial district court decision overturning the century-old federal restriction on corporate contributions to candidates and political parties.
Danielczyk is a criminal matter concerning a number of alleged campaign finance violations, including charges that the defendants illegally directed corporate contributions to Hillary Clinton’s 2008 Presidential campaign. In May 2011, the district court dismissed the corporate contribution charge on grounds that the “logic” of Supreme Court decision in Citizens United v. FEC rendered the federal corporate contribution restriction unconstitutional. The district court, however, failed to consider or even cite an earlier Supreme Court decision, FEC v. Beaumont, which had upheld the same federal restriction. Although criticism of the May decision led to a rebriefing of the case, the court in June 2011 reaffirmed its earlier decision. That decision is currently being appealed.
To read the Legal Center brief in the case, click here.
Legal Center Debunks U.S. Chamber of Commerce Criticisms of DISCLOSE Act in Senate Letter
On May 24, the Campaign Legal Center sent a letter to Senators addressing the “erroneous and misleading” legal criticisms of the DISCLOSE 2012 Act (S.2219) made by the U.S. Chamber of Commerce. The letter from Executive Director J. Gerald Hebert and Policy Director Meredith McGehee was written in response to a letter sent to the Senate by the Chamber earlier this month which mistakenly describes the bill as unconstitutional and favoring unions.
The letter lays out the case for why the nation’s campaign finance disclosure system must be updated in the wake of Citizens United and explains why such efforts are directly in line with Supreme Court precedent. The correspondence goes on to emphasize that the Chamber’s criticisms that the bill favors unions over business corporations are baseless, designed only to stoke partisan fears and should be rejected.
To read the full letter, click here.
Legal Center and 37 Other Organizations Urge Senators to Vote for DISCLOSE Act of 2012
In a letter sent on May 16, thirty-eight organizations — including the Campaign Legal Center — urged all Senators to vote for S. 2219, the DISCLOSE Act of 2012, sponsored by Senator Sheldon Whitehouse (D-RI) and co-sponsored by 43 Senators.
The letter emphasized that the legislation would provide basic information to the public about campaign expenditures made by outside groups that are influencing federal elections and their financial backers. Further, the letter stressed that the bill only contains disclosure requirements and does not contain special exceptions for any groups like those that critics attacked in the 2010 DISCLOSE Act which passed the House but fell one vote shy of the 60 required to break a threatened Republican filibuster in the Senate.
To read the full text of the letter, click here.
Legal Center Challenges Latest Attempt by Outside Group to Skirt Disclosure Laws
On May 11, the Campaign Legal Center, together with Democracy 21, filed comments urging the Federal Election Commission (FEC) to reject an attempt by America Future Fund (AFF) to avoid filing electioneering communications reports and disclosing donors for a series of proposed ads. In Advisory Opinion Request 2012-19, AFF asks the agency whether eight submitted television advertisements would trigger the reporting requirements for electioneering communications.
“Electioneering communication” is a broadcast ad within a defined pre-election time frame that “refers to a clearly identified candidate for Federal office.” An FEC regulation defines the phrase “refers to a clearly identified candidate” to mean: “[T]he candidate’s name, nickname, photograph, or drawing appears, or the identity of the candidate is otherwise apparent through an unambiguous reference. . . .”
Seven of AFF’s eight proposed ads identify President Obama without actually using the phrase “President Obama” — instead making repeated references to “the White House,” “the Administration,” or “Obamacare,” displaying images of the White House and in one instance even using a recording of President Obama’s voice.
“Although the proposed ads don’t include the words ‘President Obama,’ they nevertheless clearly identify President Obama using unambiguous references such as ‘the White House’ and ‘the Administration,’” said Paul S. Ryan, Campaign Legal Center Senior Counsel. “AFF is certainly free to air these ads, but the ads are ‘electioneering communications’ and must be reported to the FEC with disclosure of the sources of funds used to pay for the ads.”
To read the comments filed by the Legal Center, click here.
FEC Issues Advisory Opinion Upholding Aggregate Contribution Limits As Urged By CLC
In March, the Campaign Legal Center, together with Democracy 21, filed comments with the Federal Election Commission (FEC), reminding the Commission that it has no authority to strike down statutory aggregate contribution limits, or any other laws passed by Congress, as requested by Advisory Opinion Request (AOR) 2012-14. The AOR filed on behalf of Shaun McCutcheon asked the FEC to declare unconstitutional the $46,200 biennial limit on aggregate contributions from individuals to candidates and their authorized committees.
On April 27, the FEC issued an advisory opinion consistent with the comments filed by the Campaign Legal Center, stating: “The Commission concludes that the Act prohibits Mr. McCutcheon from making aggregated contributions to Federal Candidates in excess of $46,200 during the 2011-2012 election cycle.”
To read the full text of the FEC comments, click here.
FCC Vows to Fight Broadcaster Suit to Keep Public Files Offline
On May 21, the National Association of Broadcasters filed suit in the U.S. District Court of Appeals for the District of Columbia asking the Court to block the FCC's new rules requiring television broadcasters to place their political file online. Currently, the political file, which contains information required by statute about political ad purchases, is kept on paper and placed in a file. Currently, one must travel physically to each station in order to access any of these records.
The broadcasters claim in their suit that the new rule is "arbitrary and capricious" and infringes on their free-speech rights. The agency has announced its intention to defend the order in court. The Campaign Legal Center, as part of the Public Interest Public Airwaves Coalition, strongly supported the FCC move designed to bring the broadcast industry into the 21st Century and to ensure this information, which broadcasters have been keeping for decades, is made more accessible to the public.
Legal Center Files FEC Complaint Against Rep. Towns for Personal Use of Campaign Funds
On May 24, the Campaign Legal Center filed a complaint with the Federal Election Commission (FEC) seeking an investigation of Rep. Edolphus Towns concerning allegations that he illegally converted campaign funds for personal use. Media reports have indicated that the Congressman’s wife, Gwen Towns, regularly uses a vehicle financed by the campaign for a variety of noncampaign-related personal uses, including her daily commute to and from her place of employment.
“The regular personal use of a campaign-financed car by the Congressman’s wife alleged in media reports would constitute a clear violation of campaign finance laws related to personal use of campaign funds unless the Towns’ campaign was fully reimbursed,” said Paul S. Ryan, Campaign Legal Center Senior Counsel. “There is no evidence in FEC disclosure reports filed by the Towns’ campaign that it was ever reimbursed for any personal use of the vehicle by the candidate’s wife.”
Under federal law, campaign contributions are deemed “converted to personal use” if such funds are “used to fulfill any commitment, obligation or expense of a person that would exist irrespective of the candidate’s election campaign or individual’s duties as a holder of Federal office.” The law also expressly defines any “noncampaign-related automobile expense” as a personal use of campaign funds.
To read the complaint, click here.
New Crossroads GPS Information Submitted to IRS by Watchdogs Concerning Violations of Tax Status
In a letter sent to the IRS on May 24, the Campaign Legal Center and Democracy 21, submitted new information to the agency showing that Crossroads GPS is not entitled to tax-exempt status as a section 501(c)(4) “social welfare” organization.
The latest letter focuses on a $25 million dollar ad campaign attacking President Obama in ten battleground states. In a series of letters, the Legal Center and Democracy 21 have provided information to the IRS concerning the activities of Crossroads GPS and other groups seeking 501(c)(4) tax status that should render them ineligible for the special tax-exempt status which would also allow them keep their donors secret from the public.
“It is becoming increasingly clear that the abuses of 501(c)(4) tax status by these political committees in sheep’s clothing will only get worse until the IRS holds them accountable’ said Executive Director J. Gerald Hebert, Executive Director. “The ad recently released by Crossroads GPS is just the latest example of these so-called social welfare groups continuing to cross the line in violation of their tax status with Crossroads GPS leading the way.”
To read the full letter, click here.
Legal Center Distributes Overview of Court Challenges to Campaign Finance & Disclosure Laws Nationwide
On May 24, the Campaign Legal Center widely distributed an updated summary of the continuing rush of nationwide litigation challenging campaign finance and disclosure laws in the wake of Citizens United. The summary provides a brief description of pending and recently decided cases at the federal, state and municipal level, and the Legal Center’s involvement in those cases.
The most recent summary of litigation produced by the Legal Center is accessible on the Court Cases of Interest page directly beneath the “Active Court Cases of Interest.”
To view a PDF of the summary, click here.
To view the Court Case of Interest page, click here.
Legal Center President Addresses the Campaign Finance Crisis in Speech to the American Law Institute Annual Meeting
On May 23, Legal Center President Trevor Potter delivered an address on the state of campaign finance to the 89th Annual Meeting of American Law Institute at the Mayflower Hotel in Washington. The speech described our current campaign finance system as one where “[t]he laws written by Congress have been so rearranged by various Court decisions that they resemble the pieces of a jig-saw puzzle, laid out randomly on a table, with important pieces missing.”
Potter traced the evolution of the current campaign finance crisis and discussed an agenda to escape it if the political willpower can be mustered. As with so many of his speeches in the last year, this one was preceded by video clips of Potter and his most recognizable client — Stephen Colbert. Other speakers at the meeting included Attorney General Eric Holder, former Supreme Court Justice John Paul Stevens, and Nina Totenberg, NPR’s award-winning legal affairs correspondent.
CLC Senior Counsel Speaks at National Institute on Money in State Politics Annual Meeting
In mid-May, Campaign Legal Center Senior Counsel Paul S. Ryan attended and spoke on a panel at the National Institute on Money in State Politics’ annual meeting in Big Fork, MT. Ryan spoke on a panel entitled Independent Spending: Legal & Reform Efforts, addressing two flawed assumptions underlying the Supreme Court’s 2010 decision in Citizens United and how these flawed assumptions are undermining transparency and accountability in the 2012 elections.
First, Ryan explained how, despite the Citizens United Court’s assurances that corporate spending would not corrupt government because the expenditures would be “independent” of candidates, the law allows very close relationships and coordination of activities between candidates and outside spenders. Second, Ryan explained how, despite the Court’s assurances that the public would be able to hold corporate spenders and elected officials accountable through disclosure, loopholes in disclosure laws have allowed more than $120 million in anonymous-source funds to be spent to influence federal elections since the Court’s 2010 decision.
Trevor Potter Hosts Conference Board Event on Corporate Political Activity
On May 15, Legal Center President Trevor Potter hosted a daylong Conference Board event entitled “Corporate Political Spending Conference on Governance, Accountability, and the 2012 Elections” at the Madison Hotel in Washington.
The conference focused on how companies that engage in the political process can meet the challenges of the complex environment created by the Citizens United decision and increased public and media scrutiny. The conference was designed to give executives responsible for political spending decisions and policies an opportunity to hear from and engage with thought leaders in the field.
In addition to moderating panels and discussions, Potter’s general session address focused on the key issues facing companies in the 2012 environment, the debate over the role of corporations in the political system, why corporate leadership on this issue matters, and how companies can rebuild trust.
Legal Center President Addresses Stanford Policy Forum
On May 11, Legal Center President Trevor Potter was a featured speaker at a forum held by the Stanford Institute for Economic Policy Research (SIEPR). The event involved national leaders and top researchers addressing both the problems and possible solutions in keeping money in politics from corrupting elections and distorting economic policy.
To watch a video of Potter’s address, click here.