Lawsuits from Maine to Hawaii Seek to Block Public’s Right to Know

American flag and 100 dollar bill

While ever more is spent by independent groups in American elections, less and less is known about those holding the purse-strings.  And in a new litigation offensive, opponents of campaign finance reform are making an all-out attempt to eviscerate what little political transparency still exists.

Citizens United has allowed the unchecked spending of corporate and union treasury funds to influence federal elections for the first time in over 60 years.  Unfortunately, at the same time as independent expenditures skyrocket, political disclosure appears to be sinking to a new anemic low.  Federal campaign finance law requires political advocacy groups to disclose only those contributions that were earmarked for election ads, allowing donors to such groups to evade disclosure by simply designating their political contributions as “unrestricted donations” or “member dues.”  The result is that many independent advocacy groups active in federal elections are now reporting no donors at all – corporate or otherwise.  As a recent Washington Post article recounts, the percentage of “electioneering communications” disclosure reports filed with the FEC that listed the sources of the reporting group’s money has gone from 71 percent in 2004 to a dismal 15 percent in the current election.[1] We now have a profusion of innocuously-titled groups – Americans for Prosperity, Crossroads GPS, American Action Network – spending tens of millions in federal elections with none the wiser as to the interests that are funding their operations.

Most troubling, however, is that opponents of campaign finance are seeking to make this bad situation worse – or at least, to ensure this federal problem is replicated at the state level.  Anti-reform litigators have now trained their guns on state campaign finance laws, targeting in particular the laws of those states that took the initiative after Citizens United to strengthen political transparency.  In the last three months alone, this litigation offensive has challenged the political disclosure laws of nine states.  By our tally, disclosure-related laws in California,Florida, Hawaii, Illinois, Iowa, Maine, New York, Michigan, Minnesota, Ohio, Rhode Island, Vermont, Washington, West Virginia and Wisconsin are currently under legal attack.

This litigation effort seems particularly misguided because the Citizens Uniteddecision was a ringing endorsement of disclosure.  Although the High Court struck down the longstanding restrictions on corporate and union expenditures, it also upheld, by an 8-1 vote, the federal “electioneering communication” disclosure requirements, which require reporting and disclaimers for broadcast advertising that mentions a specific federal candidate and runs in the period preceding a primary or general election.  In so holding, the Court not only approved existing law, but encouraged further enhancement of the disclosure regime in light of technological advances, stating:

"A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today. … 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."

Given the strong support that eight Supreme Court Justices have shown towards political transparency, one might think that challenges to disclosure-related laws would be a non-starter.  But anti-reformers have instead gone on the offensive, wielding a novel set of legal arguments about the permissible bounds of political disclosure in their attack.

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First, anti-reform litigators attempt to distort the Citizen United decision by implying that it actually limited the constitutional scope of disclosure.  In Hawaii, for instance, the plaintiffs intimate that by upholding the federal “electioneering communications” disclosure law, the Supreme Court established this federal law as the absolute “ceiling” on permissible disclosure.[2] Thus, if a state electioneering communications disclosure law varies from the federal law in any respect, these litigants assert, the state law is overbroad and unconstitutionally vague.  This charge is lodged even if the state “electioneering communications” law is in some respects narrower then the federal law, as is the case in Hawaii.[3]

But Citizens United in no way suggested that the federal electioneering communications disclosure requirements represented the outermost boundary of constitutional disclosure.    To the contrary, as evidenced by the excerpted quote above, the Supreme Court appeared to bless the development of disclosure that would be more comprehensive and more accessible due to modern technology.  And indeed, the federal campaign finance laws cannot be the only form of permissible political disclosure, because the Supreme Court has upheld political disclosure laws in the context of lobbying and ballot referenda advocacy as well.

Second, opponents of disclosure argue that many state disclosure laws are tantamount to imposing a “PAC requirement,” and therefore can be applied only to “major purpose” groups.  Under federal law, political committees (or “PACs”) must comply with multitude of registration, reporting and record-keeping requirements, as well as contribution limits and a prohibition on union and corporate funding.[4]Because of this extensive regulation, the Supreme Court found in Buckley v. Valeothat federal political committee status could only be imposed on groups whose “major purpose” is the “nomination or election of a candidate.”  Now anti-reform litigants are attempting to head off state efforts to enhance political disclosure by arguing that some states’ disclosure laws are the equivalent of the federal political committee requirements and therefore likewise can only be applied to “major purpose” groups.  The effect of this argument, unsurprisingly, would be to exempt virtually all corporations and many advocacy groups spending in state elections from comprehensive state reporting requirements.

The weakness of this argument is that many of the challenged state laws are far less extensive than the federal PAC requirements, and sometimes entail only disclosure, and relatively modest disclosure at that.  Consequently, several lower courts have refused to apply the “major purpose” test that was developed in connection to federal law to these narrower state disclosure laws.  For instance,Minnesota now requires associations to make independent expenditures through a “political fund,” which is subject to moderate registration and reporting requirements.  Anti-reformers argued strenuously that these disclosure requirements were the same as federal PAC requirements and could not be applied to the plaintiff advocacy group, which allegedly does not have election activity as its major purpose.  But the presiding district court refused to grant plaintiffs a preliminary injunction to block this law.  It noted that unlike a federal PAC, a “political fund” was not subject to contribution limits or source restrictions, had fewer disclosure obligations, and was in some instances a “simple bookkeeping device.”[5] Consequently, the court held, the “major purpose” test did not apply, and the state could require such disclosure from any association whose spending met the applicable thresholds.

Third, after equating several state disclosure laws with the imposition of “PAC status,” anti-reformers also argue that this “PAC status,” and the disclosure it entails under state law, must be subject to “strict scrutiny.”  As justification for this stringent form of judicial review, they claim that the Supreme Court in Citizens United and in earlier cases, MCFL v. FEC and Austin v. Michigan Chamber of Commerce, applied strict scrutiny in reviewing laws that barred corporations from making election-related expenditures except through tightly-regulated PACs.  Because the “PAC requirement” in these cases warranted strict scrutiny, anti-reformers declare, all laws they deem “PAC requirements,” including disclosure laws, also warrant strict scrutiny.  In so arguing, these litigants hope to subject disclosure to much more rigorous judicial review than it typically receives, and thereby invalidate laws that might otherwise stand.

But an expenditure restriction is not a disclosure law, and anti-reformers’ effort to label both “PAC requirements” does not change this fact.  The level of judicial review is not tied to the terminology used to refer to a challenged law, but rather should be determined by the nature of the burden that the challenged law imposes on speech.  Strict scrutiny, the most severe form of judicial review, is reserved for the most burdensome campaign finance regulations, such as a restriction on expenditures.  By contrast, courts reviewing disclosure, long considered the “least restrictive” form of regulation, ask only whether the required disclosure is “substantially related” to the government’s interests in informing the electorate or deterring corruption.  Thus, because the law at issue in Citizens United and MCFLwas a direct ban on corporate election expenditures – albeit with a “PAC option” – the Court applied strict scrutiny.  But it does not follow that many of the state disclosure statutes currently under attack necessitate a similar level of scrutiny.  For instance, the Florida law under challenge requires an organization that receives or spends more than $5,000 for the purpose of running “electioneering communications” to register and file regular reports.[6] Because Florida’s law entails only disclosure, it should be reviewed under the more relaxed “substantial relation” standard.  Anti-reformers’ attempts to equate such disclosure laws with expenditure restrictions does nothing to justify a departure from this standard constitutional analysis.

Finally, if all else fails, anti-reform litigators fall back to allegations that their clients fear harassment if their political contributions or expenditures are made public.  To be sure, the Supreme Court in Buckley v. Valeo recognized a narrow exemption from disclosure in cases where a group could show a reasonable probability that the compelled disclosure of its contributors would subject them to threats, harassment or reprisals.  However, this exemption has been granted sparingly – only to those groups with legitimate fears backed up by evidence of past or present harassment (or at least of harassment directed against organizations advocating similar positions).  Now this claim is prominent in challenges to ballot measure advocacy disclosure laws in Washington and California, and has been recently added to a long-standing challenge to the federal disclosure law, Koerber v. FEC, wherein the plaintiff organization has apparently discovered only after two years of litigation that it too harbors grave fears of harassment and reprisals.

Reformers are not opposed to a narrow exemption to disclosure – that is, when evidence of true harassment is presented.  But if the “harassment” exemption is too broadly drawn or granted on the basis of unsubstantiated allegations and conjecture, it will be the exception that swallows the law, rendering disclosure in connection with both ballot measure advocacy and candidate campaigns ineffective and incomplete.

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The level of disclosure regarding independent spending in the 2010 federal elections is becoming laughably inadequate.  Congress’ efforts to remedy this problem post-Citizens United has stalled: the DISCLOSE Act has twice failed to clear a filibuster in the Senate by a single vote.  In light of the paucity of political transparency at the federal level, it is vital to turn back anti-reformers’ litigation onslaught at the state level, and to protect the efforts of state legislatures to ensure public disclosure in the post-Citizens United world.


[1] T.W. Farnam, Despite Supreme Court support, disclosure of funding for 'issue ads' has decreased, Wash. Post (Sept. 15, 2010), available at

[2] Yamada v. Kuramoto, 10-cv-00497 (D. Haw.).  The Yamada case challenges not only the state disclosure requirements, but also the state’s restriction on contributions from government contractors and the contribution limits applicable to independent expenditure committees.

[3] Hawaii’s definition of “electioneering communication” covers only communications that meet the Supreme Court’s test for the functional equivalent of express advocacy, i.e. “is not susceptible to any reasonable interpretation other than as an appeal to vote for or against a specific candidate.”  Act 211, 11-Z.c.  See also Wisconsin Right to Life v. FEC, 551 U.S. 449, 470-71 (2007).

[4] A pair of advisory opinions recently issued by the FEC ruled that political committees making only independent expenditures are no longer bound by the federal contribution limits, nor by the corporate and union contribution source restrictions.   AO 2010-09 (Club for Growth); AO 2010-11 (Commonsense Ten).  However, at the time Buckley formulated the “major purpose” test, federal political committees were subject to these contribution restrictions, as well as comprehensive disclosure obligations.

[5] Opinion, Minnesota Concerned Citizens for Life (MCCL) v. Swanson, 10-cv-02938 (D. Minn. June 20, 2010).

[6] National Organization for Marriage (NOM) v. Roberts, No. 1:10-cv-00192 (N.D.Fla.).  See also Fla. Stat. §§ 106.011.19, 106.03.1, 106.0703.