It seem unfair that just holding a hearing subjects the FEC to criticism and ridicule. The agency was acted entirely reasonably in inviting views on what it might do, if anything, in response to the McCutcheon case.  So what followed was predictable: the usual strong divisions were expressed and anyone hoping for a clear picture of the problems of campaign finance and how to address them was bound to be disappointed.  The FEC is not the culprit here: it only hosted the discussion and is not responsible for its content. It was a hearing.

In policy and legal academic circles, political parties have come back into vogue. If a New Year's “in” list was constructed, the parties would have a fair chance of being included. In discussions of polarization, in particular, parties are increasingly thought to have something to offer to a solution or an improvement: stronger parties, better funded, would offer their leadership more control over their membership, and with that control might come the capacity to induce bi-partisan compromise and achieve better governance. 

To Michael Malbin’s credit, he is taking seriously the political parties’ complaint about the terms under which they must compete for resources and influence with “outside” or independent groups. He accepts that a “rebalancing” is in order, and he proposes a compromise: more room for parties to coordinate their spending with candidates, in return for tighter enforcement of coordination rules against independent expenditure groups. He calls this a “third approach” to reform that which rejects both full de-regulation of party spending and any frontal challenge to the constitutional protections for independent spending.

The authors of the Bright Line Project proposal for ferreting out and regulating 501(c)(4) political intervention have given the matter a considerable amount of thought and have submitted to the IRS a detailed proposal. In a number of respects, the approach that they originally announced has changed. Its purpose, however, remains one of offering clarity where now there is very little, much to the frustration of practitioners looking to offer clear guidance to their clients. It is a worthy project and addresses a major problem: no one knows what distinguishes social welfare from electioneering activity, and the consequences of the confusion have been plain for all to see.

At the same time, the proposal has to answer the question of whether it is possible for the Internal Revenue Service to tackle questions like this with a reasonable prospect of general public acceptance and confidence. There is reason to doubt it. For as noted in analysis of an earlier Bright Line Project proposal, and as seems still true in this revised version, the agency would have considerable discretion in deciding whether 501(c) communications have crossed into the restricted political zone. And this task—operating within the political world—is one which tax agency officials are not trained or well suited for, nor expected to be.

In a second round, at the second level of the Chevron test, a federal district court has struck down the FEC's attempt to read a "purpose" requirement into the “electioneering disclosure” rule. Van Hollen v. Federal Election Commission, No. 11-0766 (ABJ), 2014 WL 6657240 (D.D.C. November 25, 2014). The general view is that the Court probably got this right and that to the extent that the issue has remained unresolved for this long, the FEC (once again) should take the blame. Those adopting this position point to Judge Jackson's opinion, in which she lays out in some detail the obscure route by which the FEC arrived at its position.

But, as so often, the FEC is paying handsomely for the complexity of the issue and the sins of others. A fair share of the responsibility for this disclosure controversy lies with the Supreme Court's garbled jurisprudence, which has produced confusion about the constitutionality of campaign finance requirements applied to “issues speech”.