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Legal Issues: Recent Developments in Federal Campaign Finance Law

Legal Issues: Recent Developments in Federal Campaign Finance Law. February 22-23, 2012 Tab #2. Objectives. Update status of FEC litigation; Discuss recent and upcoming rulemakings and policies; and Review recent legislative activity. Litigation Update. Electioneering Communication:

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Legal Issues: Recent Developments in Federal Campaign Finance Law

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  1. Legal Issues:Recent Developments in Federal Campaign Finance Law February 22-23, 2012 Tab #2

  2. Objectives • Update status of FEC litigation; • Discuss recent and upcoming rulemakings and policies; and • Review recent legislative activity

  3. Litigation Update

  4. Electioneering Communication: Broadcast (TV/radio) Time period before election Candidate reference Lawsuit challenging the constitutionality of: Funding restriction as applied to broadcast of a film Disclosure requirements for promotional ads and film Citizens United v. FEC

  5. Citizens United v. FEC Supreme Court affirmed in part, reversed in part and remanded to District Court on January 21, 2010 Court’s ruling: Permits corporations and labor organizations to use treasury funds to make independent expenditures in connection with federal elections and to fund ECs Upheld the reporting requirements for independent expenditures and ECs Did not affect ban on corporate or union contributions

  6. Citizens United v. FEC Supreme Court affirmed in part, reversed in part and remanded to District Court on January 21, 2010 Court’s ruling: Permits corporations and labor organizations to use treasury funds to make independent expenditures in connection with federal elections and to fund ECs Upheld the reporting requirements for independent expenditures and ECs Did not affect ban on corporate or union contributions

  7. RNC v. FEC Three-judge District Court panel upheld BCRA’s soft money provisions, citing Supreme Court’s decision in McConnell Supreme Court affirmed District Court decision in June 2010

  8. Cao v. FEC Challenge to limits placed on party expenditures made in coordination with party’s own candidates Plaintiffs’ argued: Limits are vague and overbroad Unconstitutional – types of spending restricted by limits are not functional equivalent of contributions District court certified some constitutional claims against the limits on parties' coordinated expenditures and contributions, but denied other claims as frivolous. Argument before the en banc Fifth Circuit was held on May 25, 2010.

  9. Cao v. FEC 5th Circuit Appeals Court ruling on September 10, 2010 upheld constitutionality of: Coordinated Party Expenditure limits Contribution limits on contributions from parties to candidates. Supreme Court denies petition for writ of certiorarion March 21, 2011

  10. SpeechNow v. FEC Unincorporated association planned to pay for independent communications containing express advocacy with funds raised from individuals On 3/26/10, court held contribution limits unconstitutional as applied to funds received by independent expenditure-only groups, but upheld Act’s “organizational and reporting requirements” FEC did not appeal.

  11. EMILY’s List v. FEC Challenge to solicitation and allocation rules. D.C. Circuit ordered that the regulations be vacated; opinion had broad language about nonconnected PAC’s First Amendment rights District court vacated challenged regulations (11/30/09) Commission did not seek further judicial review and adopted draft final rules (March 2010)

  12. Carey v. FEC • National Defense PAC sought advisory opinion allowing it to use separate bank accounts to: • accept unlimited contributions to finance independent expenditures and • accept FECA-limited contributions to be used to make contributions • After not receiving the AO it sought, the PAC brought lawsuit • District court granted preliminary relief for plaintiffs, relying on EMILY’s List, and Commission then negotiated a final judgment in plaintiffs’ favor

  13. Bluman v. FEC • Case brought by Canadian attorney and Israeli physician residing temporarily in U.S. • Plaintiffs challenged ban on foreign national contributions and expenditures in connection with elections in United States • In August 2011, District Court denied plaintiffs’ motion for summary judgment and dismissed case • Supreme Court summarily affirmed in January 2012

  14. Van Hollen v. FEC • Case brought by Congressman Van Hollen challenging the Commission’s regulation concerning disclosure of contributors to corporations and unions that make electioneering communications • Van Hollen alleges that the regulation requires too little disclosure because only persons giving “for the purpose of furthering electioneering communications” must be disclosed

  15. Wagner v. FEC • Challenge to prohibition on contributions by individual federal government contractors. • Plaintiffs claim that 2 U.S.C. §441c violates the First Amendment and also the Equal Protection component of the Fifth Amendment to the United States Constitution.

  16. Policy Update

  17. Topics Rulemakings & Guidance Completed Rulemakings Interpretive Rules Potential/Ongoing Rulemakings Advisory Opinions

  18. Completed Rulemakings Shays III Rulemakings: Nonfederal Fundraising (2010) Coordinated Communications (2010)

  19. Participation at Nonfederal Fundraising Events • Federal candidate or officeholder may: • Attend • Speak • Be a featured guest • Solicit funds within the limitations or prohibitions of the Act (“federal funds”) • Federal candidate or officeholder may not: • Solicit funds outside the limitations or prohibitions of the Act (“soft money”) • Solicit Levin funds

  20. Nonfederal Fundraising

  21. Coordinated Communications • Three-Part Test: • Payment Prong • Content Prong • Conduct Prong

  22. Revised Content Prong • Fivecontent standards: • Express Advocacy • Electioneering Communication • Republication of Campaign Materials • “Refers to” Standard • Functional Equivalent of Express Advocacy

  23. “Functional Equivalent” Susceptible of no other reasonable interpretation Than an appeal to vote for or against Clearly identified Federal candidate

  24. Interpretive Rules Electronic Contributor Redesignations “Publicly Disseminated” Date

  25. Interpretive Rule: • Electronic Contributor Redesignations • Redesignationsof contributions • Must be written • Must be signed • Electronic redesignationmay suffice if it assures • Contributor identity • Contributor intent

  26. Interpretive Rule: • “Publicly Disseminated” Date • Applies to Independent Expenditures disseminated on multiple dates, such as: • Yard signs, mini-billboards, handbills • T-shirts, hats, buttons • Report as disseminated on “any reasonable date” • Starting with date Filer receives or exercises control over the items • Ending at actual dissemination

  27. Potential/Ongoing Rulemakings Internet Communication Disclaimers Citizens United EMILY’s List/SpeechNow

  28. ANPRM on Disclaimers for Certain Internet Communications Comments were due Nov. 14 Grew out of several AOs: 2010-19 (Google) 2011-09 (Facebook) See also: 2010-23 (CTIA) and 2011-13 (DSCC) for technology and disclaimer issues

  29. Citizens United • Press release (Feb. 5, 2010) : • “Commission will no longer enforce statutory and regulatory provisions prohibiting corporations and labor unions from making either independent expenditures or electioneering communications”

  30. Citizens United • Draft NPRMs (Jan. 20, 2011):Considered by Commission but neither draft approved • Draft NPRMs (June 15, 2011):Considered by Commission but neither draft approved

  31. Citizens United • NPRM approved and published in Federal Register on Dec. 27, 2011 • Comments due February 3, 2012; Reply comments due February 17 • Hearing scheduled for March 7, 2012

  32. Citizens United Additional interim guidance on FECTube Accessible from FEC.gov E-Learning Page

  33. EMILY’s List/SpeechNow Final Rules (March 19, 2010) Removed 11 CFR 100.57, 106.6(c) and 106.6(f) Future rulemaking for other provisions potentially affected? FEC Statement on Carey v. FEC Reporting guidance for committees with an IE account

  34. Advisory Opinions Independent Expenditure Committees and Accounts Personal Use SSFs – Administration and Communications

  35. AOs – Independent Expenditure Committees and Accounts 2010-09 (Club for Growth) 2010-11 (Commonsense Ten) 2011-12 (Majority PAC) See also: 2010-20 (NDPAC) and 2011-21 (Constitutional Conservatives Fund PAC) Stop This Insanity, Inc. Employee Leadership Fund (pending)

  36. AOs – Personal Use 2010-26 (Baird) 2011-02 (Brown) 2011-05 (Terry) 2011-07 (Fleischmann) 2011-17 (Giffords)

  37. AOs – SSFs: Administrationand Communications 2010-04 (Wawa I) 2010-12 (Proctor & Gamble) 2011-04 (AIPAC) 2011-25 (Atlas Air) 2012-02 (Wawa II)

  38. Legislative Update

  39. PendingLegislation 112th Congress January 2011 to January 2013

  40. H.R. 4010, Rep. Van Hollen (MD) DISCLOSE 2012 Act, Feb. 9, 2012 Enhance Disclosure Extend Stand by Your Ad Require Corporate Disclosure to Shareholders Expand Lobbyist Disclosure of Campaign Expenditures Citizens United v. FEC:LEGISLATIVE RESPONSE

  41. The DISCLOSE Act (2010 Version) S. 3295 Sen. Schumer (NY) and H.R. 5175 Rep. Van Hollen (MD) In 111th Congress Citizens United v. FEC:LEGISLATIVE RESPONSE

  42. PendingLegislation:Passed by the House of Representatives H.R. 3463 • Terminates Public Funding for Presidential Campaigns and Nominating Conventions • Terminates Election Assistance Commission • Rep. Gregg Harper of Mississippi • Passed the House on December 1, 2011 • Pending in the Senate

  43. PendingLegislation:Passed by the House of Representatives H.R. 359 • Terminates Public Funding for Presidential Campaigns and Nominating Conventions • Rep. Tom Cole of Oklahoma (4th C.D.) • Passed the House on January 26, 2011 • Pending in the Senate

  44. PendingLegislation Presidential Public Funding Act • H.R. 414 • Rep. David Price of North Carolina (4th C.D.) • Introduced January 25, 2011 • H.R. 6061 in 111th Congress

  45. PendingLegislation Bill to terminate the Election Assistance Commission • H.R. 672 • Rep. Gregg Harper of Mississippi (3rd C.D.) • Hearing April 14, 2011 before Elections Subcommittee of Committee on House Administration • House Vote on June 22, 2011—failed to get 2/3 majority

  46. Executive Order • April 2011: Draft Executive Order on “Disclosure of Political Spending by Government Contractors,” became public. • May 12, 2011: the House Committees on Small Business and Oversight and Government Reform held a joint hearing about this draft Executive Order.

  47. PendingLegislation Senate Campaign Disclosure Parity Act • Requires electronic filing for Senate committees • S. 219 • Sen. Jon Tester of Montana • Introduced January 27, 2011 • 22 co-sponsors (as of Feb. 13, 2012)

  48. Pending Legislation Senate Campaign Disclosure Parity Act • Requires electronic filing for Senate committees • Offered as an Amendment to STOCK Act • S. Amdt. 1503 to S. 2038 • Sen. Jon Tester (MT) and Thad Cochran (MS) • Bill passed without consideration of this Amendment in Senate; bill pending in Conference

  49. PendingLegislation Fair Elections Now Act S. 750 Sen. Dick Durbin of Illinois Introduced April 6, 2011 Hearing April 12, 2011 before Senate Judiciary Committee Subcommittee of Constitution, Civil Rights and Human Rights H.R. 1404 (Rep. Larson of Connecticut)

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