Archive for the 'Disclosure' Category

Independent Expenditure Reporting, Made Simple

October 28, 2015
posted by Bob Bauer

Some of the Federal Election Commission’s work is simple, much of it hard, and it receives little credit for the difficulty it faces on major questions.  What is before the Commission tomorrow is among the simpler questions it faces: it is not glamorous, but because it involves independent expenditures and disclosure requirements, it is not insignificant.

The question is: how do reporting requirements apply to an independent expenditure made on a nationwide basis during the presidential primary season, clearly not intended to influence a particular state's primary?  The FEC has advised in the past that the cost should be divided among all states’ primaries that are pending, and the share attributed to each state should be reported as made to influence its primary.  FEC Advisory Opinion 2011-28 (2011).  This reporting procedure affects the legal obligations to report on a 24-or 48-hour basis independent expenditures made within specified periods before an election, and also the reporting of "electioneering communications."

Now the FEC is being asked to consider changing course, and to have the national expenditure reported as what it is – – a national expenditure.

Public Citizen has concluded that the Federal Election Commission is failing.  Its shortcomings are "dramatic and uncharacteristic", because they range across the entire field of their responsibilities in conducting audits; enforcing the law through investigations, settlements and lawsuits; and issuing regulations and advisory opinions.  The Public Citizen analysis is statistical and focuses on vote deadlocks.   The FEC is indeed disagreeing a great deal—about that, there is no doubt.  But is the agency failing or is the old regulatory model collapsing under the pressure of changing law and political practice?

Public Citizen cannot answer this question because it is looking at agency performance in the aggregate.  It is unable, for example, to explain what might be happening in particular cases, or why deadlocks are occurring across various agency functions.  There are certainly instances where the vote for enforcement is as suspect as a vote against it.  The result is still deadlock but the reasons for it are not quite what Public Citizen implies.  Nonetheless, it being assumed that matters could not have gotten this bad without dereliction of duty somewhere, the FEC takes the blame.  It is expected to take up the big issues, such as those involving "coordination" or "dark money", which are precisely the issues over which disagreement is certain to arise.  And so around and around it goes.

One alternative available to the FEC in this period of uncertainty is to commit itself to less controversial but highly productive functions.  Bipartisan suggestions have been made, for example, that it could do better in discharging its disclosure function, and in reforming, as Congress has directed, the operation of its Administrative Fines program. There is value in starting with these basic responsibilities.  To the Commission’s credit, it has initiated a rulemaking to move in this direction.

And on this question of disclosure, there is much to be done, more than suspected by many who hold the view that, for all the discord and disappointment, campaign finance law administration has performed well on public reporting.  Now we have some fresh scholarship by Jennifer Heerwig and Katherine Shaw that subjects this assumption to careful, critical examination.  Jennifer A. Heerwig and Katherine Shaw, Through a Glass Darkly: The Rhetoric and Reality of Campaign Finance Disclosure, Geo. L. J. 1443 (2014).

The State of the Debate

May 18, 2015
posted by Bob Bauer

The Supreme Court has been asked to consider whether the Attorney General of California may require tax-exempt organizations to produce donor information normally provided only to the Internal Revenue Service. The petitioner, the Center for Competitive Politics, argues that the Ninth Circuit has improperly upheld this requirement by giving the State ready access to this information on a slim-to-none showing of need.  The Attorney General has asserted that the information will be useful to the State's attempts to enforce the law, such as the protections against self-dealing or improper loans.  Others apparently suspect that there is more going on, namely, a move to discourage the sort of politically shaped tax-exempt activities associated with the Koch brothers.

This is an important case, now before Justice Kennedy.  It is the latest turn in a troubled reform debate.   First there is the fight over disclosure, which is relatively new. For years this was supposed to be the common ground that camps badly divided over other forms of regulation could occupy: but no more.  And just as reform communities have suspected political actors of cheating on the law, engaging in "circumvention,” now skeptics of regulation fear that, in the absence of consensus on legislative reform, state actors are resorting to extralegal administrative remedies.

Over the weekend, on the election law listserv, a snippy exchange quickly developed about the California case and what it represented.  In some part, the views fired back and forth reflected the widespread assumption that positions on reform can be explained primarily by reference to their proponents’ political objectives.  It is believed that reformers want regulation to advance progressive policies, or that their antagonists oppose regulation because they wish to surrender political power to the marketplace.

An Uprising for Campaign Finance Reform?

April 20, 2015
posted by Bob Bauer

A few years ago, after the enactment of McCain Feingold, the Federal Election Commission began issuing implementing rules, and there were not well received in reform quarters.  It was objected that the agency was ignoring Congressional intent and gutting the law.  One line of attack was possible Hill intervention to disapprove the rules pursuant to the Congressional Review Act.   At a lunch with Senators to discuss this possibility, a prominent reform leader told the assembled legislators that if they did not reject the rules and hold the FEC to account, the public “would rise up” in protest. The public uprising did not occur, neither the Senate nor the House took action, and the reform critics took their cases to court—with some but not complete success.

But the hope for public pressure remains alive, and as Matea Gold reports in The Washington Post, there is some thought that with Super PACs and the like, things have gotten so out of hand that voters will insist on action.  The ranking of campaign finance among other priorities important to voters remains low, but by one reading, it is inching up the list.  Any upward movement is taken to be, maybe, a sign of more popular passion to come.  This is always the wish.  In the annals of modern campaign finance, it is never a wish come true.

But campaign finance history also shows that elected officials can be moved to take up this cause, and the same Post story that speculates about changes in public opinion records, more concretely, restiveness on the part of politicians.  And this could make a difference.  Candidates and officeholders cited in the story, such as Senator Lindsey Graham, worry about the small number of Americans—“about a 100 people”-- who can shape the course of a campaign with their money.  The issue for Senator Graham is not, apparently, the cost to political equality: it is the unfairness to candidates who find that these wealthy activists “are going to be able to advocate their cause at the expense of your cause.”

Mr. Noble in His Gyrocopter

April 16, 2015
posted by Bob Bauer

Long in the field of campaign finance, well versed in its triumphs and tribulations, Larry Noble of the Campaign Legal Center objects strongly to the suggestions for disclosure reform I co-authored with Professor Samuel Issacharoff.  It’s all a magic trick, he argues, that accomplishes the reverse of its stated intention: it moves contributions into the dark, raises the risk corruption and disregards the lessons of Watergate.  The public is not “gullible”: it won’t buy it.

It is difficult not to imagine that Mr. Noble is engaged in theater of his own, something like the aerial feat performed yesterday by the mailman in a gyrocopter who touched down on the Capitol grounds with a similarly passionate appeal for campaign finance reform.  This gentleman, undoubtedly sincere but less clearly prudent,  entitled his project “Kitty Hawk”, after the Wright Brothers’ fabled flight in North Carolina in 1903.  Larry, if he were maneuvering a craft, might have  named it “Watergate," and he would have refreshed the message by 70 years, with only another four decades to go to cross over into the current century and to the present time.